Spend time checking with locals for business tips.

I'm responding to your Q&A about the couple in their early 60s who can't find work.

Best suggestion is to take three weeks and visit the towns and cities you might like to live in. Call on members of the club you may belong to, such as Rotary, Lions or Freemasons Lodge. Establish why these people live there. Discuss with real estate people the best place to live, house prices, what businesses are on the market and why they are for sale.

Establish what is the best business in the area, such as a motel, or working off the land such as orcharding, even organic farming. If this appeals, speak to people in the industry and collect as much information as possible.

Look for an opportunity to work together, such as tourism, hospitality or food. Other people do very well in these businesses, so there is no reason why these well qualified people will fail.

Good thinking. You make the road trip sound fun. Two other readers, in the next Q&As, thought along similar lines. What's more, most of the ideas and comments would apply equally to younger readers.

Motel leases
I was interested in the dilemma faced by your correspondents who are "past their use-by date" and who have a house worth $650,000 and $200,000 and "a few shares".

One solution could be to buy a modest motel business, a country store or the management rights to a hospitality-related business in a resort area with owner's accommodation included. They would be working for themselves and still have the security of their personal accommodation.


The trick would be buying a bona fide profitable business that's being offered for sale for a genuine reason - perhaps by people who have decided to retire or want to spend more time with their grandchildren or move to Oz where their kids have migrated to. They do come up.

A good accountant can confirm the profit lines so they're not inheriting a "dog", and of course the usual thorough inspection of buildings, valuations would be warranted. Many smaller motel businesses don't involve buying the land and buildings but operate on a "motel lease", so they wouldn't have to put up a huge amount of capital.

If you look on "motel for sale" websites, a few go for as little as just over $200,000. So your couple could even keep their house and rent it to get an extra income.

This advice comes from someone who knows what he's talking about - Colin Taylor, writer/editor of the Herald's Weekender Commercial Property section.

B & B solution
Here is a suggestion for your unemployed couple. Convert their home (or swap it for one more suitable) into a bed and breakfast or tourism accommodation.

You will meet a steady stream of interesting people, will have lots of fun and do-able projects - upgrading your website, thinking of a "point of difference", figuring out the least expensive way to redecorate (go Trade Me!), landscaping, visiting local attractions so you can recommend day trips, trying out new recipes for your guests, etc.

You will wake up each morning with so much to look forward to that you won't realise you aren't making that much money. But who cares? Life will be fun, busy and you will control the extent to which you are involved. For example, you don't HAVE to provide breakfast - a basket of food the night before could suffice. And when you want a break or think the potential guest sounds like hard work, just say "No Vacancy".

Sounds as if you speak from experience. Cheers from me - and the couple themselves. Read on.


Advice shot in arm
Thank you so much for printing our letter on November 26. We never dreamed we would receive such an overwhelming response from so many of your readers prepared to share their time, suggestions and advice. One email full of detailed job search advice came from India. It was a full three A4 pages long in size 10 font!

I have met several readers who contacted you and I am looking at one or two interesting employment possibilities. I also received good advice about improving my CV from an HR consulting professional who reads your page and suggested I contact her.

Through your column we would like to sincerely thank all of the kind, wonderful people who offered to help and share their valuable time with us. We are truly grateful to you all. The suggestions and advice have been like a "shot in the arm" for us both. We feel so much more optimistic about the future. None of this could have happened if you had not kindly published our letter, Mary.

We want to wish you, your readers and all those who have been so helpful to us our best wishes for a wonderful Christmas and New Year.

It's been a real pleasure. I was also thrilled to receive 26 letters from readers - plus more than 30 comments on the Herald's website.

Some of the more personal messages I simply forwarded to you. But there are still some letters that you and other readers might find helpful that haven't made it into the paper. As this is my last column for this year, we've included a selection of those letters here."

Comparing funds
I am investing in the AMP aggressive KiwiSaver fund. I am young and prepared to take high risks as I have time to recover any losses before my retirement. However, analysing this fund's performance against funds in the same "aggressive" category shows it is consistently the worst performer.

When discussing this with friends a common argument is that, "I am in this for the long term, so will stick at it". But this fund has not performed well over the last four years.

Come to think about it AMP is one of the worst performing fund managers in all KiwiSaver categories. The Morningstar four-year returns ending September 30, 2011, show AMP came last among the aggressive and growth funds, and second or third to last among the balanced, conservative and moderate funds - although its conservative-moderate fund did come second.

When should I consider switching to another provider within the same aggressive category? I don't want to be chasing the best performer. However, I think it is unacceptable to give AMP 10 years to prove that it is a decent fund manager.

It's good to know you're not chasing returns - switching into whichever fund has recently performed well. That's a waste of time, because past performance often doesn't continue. Still, it's fair enough to ask how long you should put up with repeated poor performance.

There's no easy answer. It rather depends on whether the fund manager can explain what went wrong and how it's going to improve. And AMP does that quite well.

The main problem, says George Carter of AMP Capital, is the way the aggressive fund - and to a lesser extent most other AMP funds - have invested in property.

They've done so via a property fund that invests directly, buying buildings and so on. Most other KiwiSaver funds invest indirectly in property companies listed on the stock exchange.

While these two fund types usually perform roughly similarly, direct investing turned out to be way better before the global financial crisis, but way worse since then - from around the time KiwiSaver began, says Carter.

In the past couple of years, AMP has reduced its funds' exposure to direct property, and this shows in more recent returns, with the aggressive fund's returns being about average.

What about AMP's default fund, which has almost no property? This fund holds about 70 per cent cash, unlike the other default funds, which have significantly more fixed interest, says Carter.

Recently, with interest rates falling, the other funds have performed better. But if - or we should probably say when - rates rise again, AMP's more cash-heavy fund is likely to do better.

Carter also points out that Morningstar's numbers sometimes differ from AMP's, because of different ways of measuring results. "I'm not trying to say if we looked at the numbers differently it would all be okay. Our performance has not been what we would like. It's just that it's difficult to do the analysis when there are different ways of reporting performance."

Clearly we need all KiwiSaver providers to report their returns - and fees - in a comparable and easily understood way.

Officials at the Ministry of Economic Development have been working on improved KiwiSaver disclosure for many months, in connection with the proposed Financial Markets Conduct Bill. They say that every provider thinks there should be changes, but getting any group to agree to one approach is a challenge.

I bet they all think their own way is best!

The officials plan to discuss their proposals with their new minister early in the new year. What happens then will depend on ministers and Cabinet, but changes aren't expected to come into effect until 2013.

However, says one official, providers "appear keen to improve disclosure and are working constructively with officials. MED hopes that disclosure of returns and costs is improved sooner rather than later."

In other words, some providers may make voluntary changes. Fingers crossed.

Meanwhile, should our reader switch providers? Says Carter, "Much of AMP's relative underperformance came in 2008 and 2009 and this will slowly roll out of the longer-term numbers. There's certainly no reason to suspect that the AMP funds won't perform in the future."

Sounds reasonable. But - as I always say when asked which investment will do best - I don't know.

Merry Christmas!

This is my last column this year. Many thanks to the readers who send questions and comments - the large majority of which, unfortunately, don't make it into the column. It's still useful to hear from you. And putting your thoughts in writing should help if you seek guidance elsewhere - or if you just want to vent your spleen!

One of my favourite spleen vents this year - unpublished until now: "I have noticed they are now changing the rules to KiwiSaver. YOU are one of the problems that probably helped water down this scheme, by continually going on about the $1000 kick-start and encouraging people to sign up their teenagers and babies."

I'm tempted to respond: "Okay, from now on I won't tell you about good stuff." But then where would this column be?

Here's to safe, relaxing and joyous holidays for everyone. See you back here on January 21.

Mary Holm is a freelance journalist, part-time university lecturer, member of the Financial Markets Authority board, director of the Banking Ombudsman Scheme, seminar presenter and bestselling author on personal finance. Her website is www.maryholm.com. Her advice is of a general nature, and she is not responsible for any loss that any reader may suffer from following it. Send questions to mary@maryholm.com or Money Column, Business Herald, PO Box 32, Auckland. Letters should not exceed 200 words. We won't publish your name. Please provide a (preferably daytime) phone number. Sorry, but Mary cannot answer all questions, correspond directly with readers, or give financial advice.