Investing 101: Future Proofing Your Wealth

Cash is where many people start — savings accounts, term deposits, or cash funds. And if you’re working toward a short-term goal (within three years), keeping things simple and liquid makes sense.

But while it feels safe, cash is guaranteed to lose value over time. Why? Because inflation usually outpaces the returns you’ll earn sitting in the bank. Even at 6%, you’re likely just matching inflation — not growing wealth.

And don’t be fooled by old advice around term deposits. These days, it’s harder to access your money early without penalties, even if it’s for something like a house deposit. The result? More admin, delays, and missed opportunities.

Cash has its place — but long-term wealth isn’t built in a savings account.

A step up from cash in the risk ladder, bonds are essentially loans to governments or companies. You lend them money, they pay you interest, and return the principal at the end of the term.

Most people have exposure to bonds through KiwiSaver or managed funds. They’re useful when markets are volatile, offering a defensive layer that helps smooth out returns.

But just like cash, bonds won’t get you ahead on their own. They’re steady, not growth-focused — and shouldn’t form the backbone of your future-focused portfolio.

Shares are where long-term growth really happens — but only if you play it smart. The problem? Most new investors don’t. They follow hype, invest based on personal opinions, or copy random portfolios they saw online.

Shares are not just “a step up” from bonds. They’re a completely different asset class, with significantly higher risk — and higher potential reward. That means they require research, diversification, and patience.

The best approach? Investing in diversified global funds that spread risk across countries, sectors, and companies. Avoid trying to pick winners. You won’t consistently outperform the market — and after fees, tax, and inflation, most DIY attempts underperform anyway.

And if you’ve still got a mortgage? You may get more bang for buck by paying it down before diving into shares.

From new builds to renovations to commercial property — Kiwis love a good property play. But each strategy comes with its own risks.

• New builds are ideal for time-poor investors. Low maintenance, easier to rent, and usually under warranty.

• Renovations can add serious value — but they often blow out in cost and time. Great on paper, risky in practice.

• Commercial property offers strong yield and less hands-on management, but the barrier to entry is steep (think 40% deposit), and vacancy risk is much higher.

Future-proofing through property means knowing your limits. Don’t rush into development or commercial until your balance sheet can handle it.

• Cash and bonds are useful short-term tools, but not long-term solutions.

• Shares offer growth — but only with the right strategy and diversification.

• Property can build serious wealth, but each approach comes with trade-offs.

• Don’t chase hype. Build a portfolio that suits your goals, timeline, and risk tolerance.

• Smart investing isn’t about guessing right — it’s about playing the long game.

If you’d like to learn more, check out these other episodes below.