Five-fold Friday: Recession proofing yourself for the triple dip; budgeting saints; value investing; personal finance blogs galore and yoga for wine lovers.

Five-fold Friday: Recession proofing yourself for the triple dip; budgeting saints; value investing; personal finance blogs galore and yoga for wine lovers.

Pessimism is an occupational hazard in my business because as journalists we are constantly bombarded with bad  news. The past week has been an especially dispiriting one. You'll be hard pressed to find many positives in the mainstream news media. That's because news stories (by and large) are filtered with a negative lens; the good stuff seldom gets reported because it doesn't count as news worthy. Here's five pick-me ups to end the week on a high note.

1) Savings and Spending

There may be no glossing over the economic gloom of late but what does that mean for you really? And how will you be affected by circumstances beyond your control.

Having multiple income streams can be a real life saver during tough economic times. This blog outlines some important consideration with respect to having a multiple income strategy.

2) Credit/Debt

I attended a non-profit event this week that reminded me that amid the sovereign debt tsunami and other supposed signs of the end of the world, there is reason for hope.

Out there in the trenches, good people are selflessly trying to dig others out of debt or spare them the fate of so many of today's over-extended, credit-addicted households. So kudos to the people with CAP Money for their work in this regard. This free-budget advisory service, imported from the U.K. where it has apparently met with well received,  teaches its participants how to get a handle on their budgets and get out of debt. In compelling cases, it also helps to bail people out.

What a refreshing change from predatory loan sharks out who present themselves as help by saddling desperate folks with 700% loans. (For more on how their days could be number see this story).

CAP's strategy to money management hinges on a three-stream accounting system where incoming money is split into different accounts: one for regular payments (rent or mortgage, utilities, insurance etc); one for cash (to use for variable costs such as food) and another for savings. It's designed to minimise wasteful spending and build savings.

My own practice has been to avoid carrying cash at all. I've found an empty wallet is one of the an effective defense against unnecessary spending. That said, I've decided to experiment with the cash allocation for food, the most variable part of my budget. I might be eating cat food at the end of the week when the envelope is empty, but it will undoubtedly fix the over-run on my loose food budget.

Here's a link to CAP and few other free budget advisory services and resources.

CAP Money

NZ Federation of Family Budgeting Services

Do-it Yourself on Sorted.

NZ  Association of Credit Union

(free budgeting is a complementary service for all Credit Union Members)

3) KiwiSaver

The performance rankings chart I linked to last week contained an error which resulted in some KiwiSaver funds that have done exceptionally well over the past three years to be omitted. We apologise to our readers and any affected providers for the mistake.

Click here to see the revised list.

One of the funds that was left off and that deserves special mention is Milford Asset's Management's Aggressive Fund. Accordingly to our calculations which adjust for fees and expenses, the high risk aggressive fund has delivered annualised three-year returns of 10.5%, making it the second highest performing fund among the 200 on offer.

Aggressive funds are deemed to be the riskiest ones one the market. As such, KiwiSavers invested in these funds are expected to have a high tolerance for volatility and a long-term frame for which to endure it. In return for that higher risk, theory has it that they'll be rewarded. That would appear to be the case for the top five performing aggressive funds profiled in our rankings but others may not be so happy.

The average adjusted three-year return for aggressive funds was 1.8%. Interestingly, conservative funds (considered the safe, boring but reliable investment bet) returned on average 4.5% in the same time frame. Growth funds, considered the second most risky of KiwiSaver funds, returned 2.9% on average.

So what the recipe for Milford's success with aggressive KiwiSaver?

I interviewed Milford fund manager Bryan Gaynor earlier this week who said the key to overcoming bear markets is being highly selective, maintaining calm while others panicked and having the flexibility to move swiftly in and out as necessary. (For more on Gaynor's views and strategy see this article.)

The Milford Aggressive Fund has almost an equal weighting of Australian and New Zealand equities (those companies listed on stock exchanges in both countries). It can also go to holding a high percentage of cash, which helped it to avoid the worst of the 2007-2009 fall. The fund has grown to NZ$23.5 million in value. Even though it is actively managed (for more on the difference between an actively and passively managed fund read this article from our 101 investment management series) its fees are relatively modest. We have their expenses and fees at just over 1%.

4) Death and taxes

Wills and talk of wills tend to give people the willies. I put it off for years, then finally give into to reason last year.  Even so, the subject still me makes squeamish. At a recent conference, I was handed a brochure on living wills. I recoiled. So did the other media gal beside sitting beside me.

Those brave enough to confront their fears may find some comfort going on-line. The Public Trustee offers this service for free but there's a trade-off. When you shuffle off this mortal coil, they get your business. Fair enough.

Personally speaking, I think it's best to get a legal opinion on all of it. It's not hugely expensive. I think I paid $150.  My grandmother (a thrifty woman) hand wrote hers on a piece of paper, later torn to shreds by lawyers. There was a lesson ( a lot of them in fact) for several family members.

5) Books and Movies

I had someone tell me yesterday that personal finance was a bad handle for a section that was ultimately aimed at improving individual wealth. His rationale was that the word finance itself had a negative connotation. It's not the first time I've heard that criticism. Someone else (I won't say who) accused personal finance of being a ghetto. I'm determined to prove that person wrong of course.

I agree the word finance (because of the false association with finance companies) has a bad smell to it but that's not that case beyond our borders. Around the world personal finance is a well recognised term and growth industry of sorts. We may never be able to understand or control the larger economic forces at work but well informed individuals (armed with the right tools and resources) can at least assert themselves over their budgets, resist consumer pressures and learn to work the financial system to their favour.

To that end, here's a juicy list of some of the personal finance blogs and websites that are proving popular with information hungry individuals trying to master of their  financial destiny.

And finally, here's some yoga exercises to unwind with on the weekend. A very clever use of props bound to make yoga more popular with the masses.

HT my yoga spurning wine-loving friend Kirsty in Christchurch.