Simplicity could teach governments a thing or two

Started by Untamed, Jun 08, 2024, 01:37 PM

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Popeye

#15
Quote from: Buzz on Jun 08, 2024, 05:56 PMDoes Simplicity invest in these properties using their customers Kiwisaver funds, or is there some ring-fenced fund specifically for the property development?

They are using kiwisaver funds.  My daughter was surprised to find that 3% of her balanced fund was invested in Simplicity Living.  Seems high to me, also begs the question to what extent they are a passive versus active investor.

Sam Stubbs seems a very visionary and action oriented sort of fellow.  For me he appears in the news a bit too much though.  For example, he had a lot to say on Simplicity's behalf about Simon Henry the loud mouth.  My thought was he was entitled to his opinion and passion for social good, but I would prefer he did use investor money to achieve them.  Some might be happy enough though.


Untamed

Quote from: Popeye on Jun 18, 2024, 02:16 PMThey are using kiwisaver funds.  My daughter was surprised to find that 3% of her balanced fund was invested in Simplicity Living.  Seems high to me, also begs the question to what extent they are a passive versus active investor.

Sam Stubbs seems a very visionary and action oriented sort of fellow.  For me he appears in the news a bit too much though.  For example, he had a lot to say on Simplicity's behalf about Simon Henry the loud mouth.  My thought was he was entitled to his opinion and passion for social good, but I would prefer he did use investor money to achieve them.  Some might be happy enough though.




of DGL fame who made those of colour comments about Nadia Lim a while back, how Simplicity was going to remove their investments, how he shouldbe fired



You might want to edit your post, as something is clearly missing.

Initially, I wasn't fussed on Sam myself, but having made the effort to attend two of his road shows, I feel very differently. The guy is passionate and committed, and he is most definitely not in this to make money for himself. He thinks outside the square, which is precisely what this country needs, especially our political parties/governments, who seem totally incapable of it.

Read through the Simplicity Living website, and take a look at the attachments I provided - how many businesses would be willing to share that information? I'll wager, very few, if any. If you get the chance to go to a road show, go - ask questions, and you will get answers. Simplicity is one of the most transparent companies out there, and they absolutely are making a difference.

Shane mentioned in his email, that they use F&P appliances - rather than cheaper brands. He talked about this at the road show. They provide exactly the same appliances in every unit they build, which means they have been able to an excellent deal with F&P (I assume directly rather than via a retailer) to provide appliances at a significantly discounted rate. That deal is long term so if and when an appliance needs replacing, Simplicity will still get it at a valuable discount. Provide quality appliances and your appliances will last much longer. Everything they have done with their builds is designed to be cost effective, low maintenance, and long term.

I do get that people are sceptical - so was I. But not anymore. I am more than happy for a small percentage of my Kiwisaver to be invested in this initiative. There is money to be made in rentals, and the fact that this is a not for profit company, means returns go straight to us, the shareholders.

Simplicity Living is achieving more than any government has in my life time. That speaks volumes.

Raven

Quote from: Popeye on Jun 18, 2024, 02:16 PMThey are using kiwisaver funds.  My daughter was surprised to find that 3% of her balanced fund was invested in Simplicity Living.  Seems high to me, also begs the question to what extent they are a passive versus active investor.

I understand that not everyone likes Simplicities unlisted housing type investments in their Kiwisaver or other general funds, but they are not hiding it from anyone, and people are free to choose or change their preferred Kiwisaver provider.

Popeye


I cannot argue with any of the above, all fair points.  Anyone who gets quality stuff built quickly in this country deserves respect.  Personally, I would want my super fund to be more silent running.  I would not want to wonder what share of unlisted housing is appropriate for the fund, and whether it was going to rapidly increase under my nose.

The moral posturing about that dickhead Simon Henry saying some dumb stuff did stick in my craw a bit.  I do not believe in stringing people up for putting their foot in their mouth, we all do that on occasion.  Stubbs was front and centre on punishing Henry/DGL for basically being rude and obnoxious when making a fair point.

Having said that, I do hope Stubbs and Simplicity go from strength to strength and succeed at housing where so many others have failed.  Just not with my money though..

Untamed

In case anyone is still even remotely interested in learning more about this, here is an email received today from the Investor Services Manager (Simplicity) with a little more info:

Is there an Opt-Out option...

Unfortunately not, however, you can choose how exposed you are by selecting a fund type that has an allocation you are comfortable with.

Is there a maximum percentage you would ever invest...

Absolutely - below I have listed our target asset allocation:
Fund Type    Target asset allocation
High Growth    10.00%
Growth            4.50%
Balanced    3.50%
Conservative    2.50%
Default    0%
Defensive    5.00%

What kind of returns can one expect from the Simplicity Living investment?

I'm quoting directly from our Statement of Investment Policy and Objectives (SIPO) which I have attached:

During the development stage, the deemed return on construction is 10% to compensate investors for the cost of capital (including land purchased for development).

Following completion, the rented properties will target a return of 5 year rolling NZ CPI + 3% (Consumer price index). This recognises the lower-risk characteristics of completed residential property, while compensating investors for the associated illiquidity of the investments.

We don't comment on the performance expectations of the individual portfolios that make up our fund types ( i.e. unlisted New Zealand property asset class) as this is subject to uncertainty and risk - However, I would suggest having a look at our non-KS fund type, the Homes and Income Fund, which is still very new so the historical returns data only goes back 3 months - but with a 25% Unlisted New Zealand property target allocation, it provides a good indication of performance - I have attached a couple docs below.

Can you provide some financial details for NZ Living...

So essential NZ Living became Simplicity Living Limited, it is not a partner business - Simplicity Living is owned by the Simplicity Foundation - this information can be located in the NZ company office's register.

I would suggest Googling Shane Brealey, who was the founder and director of NZ Living, there are quite a few articles regarding NZ Living's past development - one of their most recent developments before becoming Simplicity Living was a sizable project in Auckland - here is an article I found


I have attached details of the Home and Income Fund - EDIT: nope, too large again. PM me if you want it.

If you want me to stop sharing/you're not interested - let me know and I will leave it here.

Untamed

#20
Quote from: Popeye on Jun 18, 2024, 02:16 PMThey are using kiwisaver funds.  My daughter was surprised to find that 3% of her balanced fund was invested in Simplicity Living.  Seems high to me, also begs the question to what extent they are a passive versus active investor.

Sam Stubbs seems a very visionary and action oriented sort of fellow.  For me he appears in the news a bit too much though.  For example, he had a lot to say on Simplicity's behalf about Simon Henry the loud mouth.  My thought was he was entitled to his opinion and passion for social good, but I would prefer he did use investor money to achieve them (I assume you meant "didn't").  Some might be happy enough though.



Anybody who chooses to invest in Simplicity's Kiwisaver or investment funds, is 100% aware that Simplicity is a not for profit provider, with the primary goal of creating good returns for investors, while doing good in our communities. Some will have chosen Simplicity specifically for that reason, others may have chosen it for the low fees, but everyone knew this.  As I said elsewhere, Simplicity is one of the most transparent companies in NZ. I seriously doubt many companies would be willing to share what Simplicity has - for me to share with you here (see my other posts).

I guess the point I'm making is your comment above is kind of unnecessary. If you don't want your money supporting social causes, you wouldn't choose Simplicity.

Crackity

#21
Simplicity honestly baffles me - I feel like Sam Stubbs uses Simplicity like a personal fiefdom and megaphone. And I'm not saying that he is wrong but the potential conflicts of interest are not what I want from a KiwiSaver provider. I appreciate others have different views

Untamed

Quote from: Crackity on Jun 19, 2024, 09:59 PMSimplicity honestly baffles me - I feel like Sam Stubbs uses Simplicity like a personal fiefdom and megaphone. And I'm not saying that he is wrong but the potential conflicts of interest are not what I want from a KiwiSaver provider. I appreciate others have different views

Where is the conflict of interest? He is passionate about the company he set up, and the philosophy and values behind it. He is also passionate about fostering and encouraging financial literacy in general, and uses Simplicity to help educate people. What is wrong with that? It is that passion that has enable Simplicity to think outside the square and do things nobody else is doing.

I am not telling anyone to invest with them. But I am really puzzled by the general lack of appreciation for what they are achieving. I don't get that.

Crackity

Quote from: Untamed on Jun 19, 2024, 10:25 PMWhere is the conflict of interest? He is passionate about the company he set up, and the philosophy and values behind it. He is also passionate about fostering and encouraging financial literacy in general, and uses Simplicity to help educate people. What is wrong with that? It is that passion that has enable Simplicity to think outside the square and do things nobody else is doing.

I am not telling anyone to invest with them. But I am really puzzled by the general lack of appreciation for what they are achieving. I don't get that.


Well the potential conflicts and opacities will be between funding/managing Simplicity Living and the Simplicity KiwiSaver funds. The trustee for these will be supervising everything I presume......

Popeye

Quote from: Untamed on Jun 19, 2024, 07:10 PMAnybody who chooses to invest in Simplicity's Kiwisaver or investment funds, is 100% aware that Simplicity is a not for profit provider, with the primary goal of creating good returns for investors, while doing good in our communities. Some will have chosen Simplicity specifically for that reason, others may have chosen it for the low fees, but everyone knew this.  As I said elsewhere, Simplicity is one of the most transparent companies in NZ. I seriously doubt many companies would be willing to share what Simplicity has - for me to share with you here (see my other posts).

I guess the point I'm making is your comment above is kind of unnecessary. If you don't want your money supporting social causes, you wouldn't choose Simplicity.


I sort of agree (that is why I pulled my money from Simplicity), although I wonder if less sophisticated investors fully appreciate the implications of Simplicity's approach for their house deposit or retirement. Most Kiwisaver investors wont have given this much thought...


Simplicity might find they have a very difficult balancing act between their goals which will not always be congruent.  Hopefully they can provide great returns for investors while doing social good.

ps. thanks for he edit, I need to be more careful

Untamed

Quote from: Popeye on Jun 20, 2024, 08:27 AMI sort of agree (that is why I pulled my money from Simplicity), although I wonder if less sophisticated investors fully appreciate the implications of Simplicity's approach for their house deposit or retirement. Most Kiwisaver investors wont have given this much thought...


Simplicity might find they have a very difficult balancing act between their goals which will not always be congruent.  Hopefully they can provide great returns for investors while doing social good.

ps. thanks for he edit, I need to be more careful

Correct. In my experience most KiwiSaver members give little or no thought to their investment. I used to feel sorry for them and put it down to lack of knowledge, but not anymore. There is no excuse now, for anyone not understanding how KiwiSaver works, or for not being proactively involved in their own. You would be shocked to see the comments I see on various Facebook pages/groups/general posts, by people who still believe the government Is stealing their money, and controls their KiwiSaver. I have spent hours, trying to politely enlighten people but they simply don't want to know. Sometimes it honestly feels like we are living in Trump's America.

So I am sure you are right, but it is their responsibility. If they want to go through life being ungrateful, ignorant conspiracy theorists, who am I to stop them?

This is precisely why we need financial literacy education in our schools, and not just superficial savings education. Solid, age appropriate, in depth education, so that this youngest generation is able to do better.

Yes, I am getting less tolerant of fools as I get older.

Raven

Quote from: Untamed on Jun 20, 2024, 08:40 AMCorrect. In my experience most KiwiSaver members give little or no thought to their investment. I used to feel sorry for them and put it down to lack of knowledge, but not anymore. There is no excuse now, for anyone not understanding how KiwiSaver works, or for not being proactively involved in their own. You would be shocked to see the comments I see on various Facebook pages/groups/general posts, by people who still believe the government Is stealing their money, and controls their KiwiSaver. I have spent hours, trying to politely enlighten people but they simply don't want to know. Sometimes it honestly feels like we are living in Trump's America.

So I am sure you are right, but it is their responsibility. If they want to go through life being ungrateful, ignorant conspiracy theorists, who am I to stop them?

This is precisely why we need financial literacy education in our schools, and not just superficial savings education. Solid, age appropriate, in depth education, so that this youngest generation is able to do better.

Yes, I am getting less tolerant of fools as I get older.

I spend a bit of time on the Reddit NZ personal finance sub, and never cease to be amazed at the financial illiteracy it reveals. Staggered a couple of days ago with people asking what a term deposit was. Shocking indictment on our educational and financial educational system... do we have one :)