When we hear the words ‘investing’ or ‘managed funds’, many of us put off looking into it, but is it as intimidating as it sounds? Can we rely just on KiwiSaver or are other Managed Funds super important? And why is investing particularly important for mothers? In Part Seven of our Motherhood Penalty series, we’re breaking all this down!
We’ve all contemplated what we’d do if we won Lotto, right? Would you buy a nice house? Take a long holiday? Move to France? Quit your job? Study or retrain? Help your child(ren) finance university?
I’m at an information session in Wellington run by financial adviser Elizabeth Moloney-Geany for mothers, in association with the Mothers Network. An organisation run by mums for mums, Mothers Network facilitates discussion groups to support and connect women facing the changes and challenges of motherhood.
Elizabeth asks those of us attending the session to imagine we’ve just won $5 million from Lotto.
“Jot down all the things you’d do, buy or spend it on.”
Me? A larger home with an outdoor area for my family of three. Keep my job but also study because I love both. Travel in South America. Get pre-made low-FODMAP meals delivered to my house. Help my son pay for university one day.
Elizabeth then asks us to imagine there was a mistake: actually, two people won Lotto, and you get $2 million. What comes off the list?
Okay, now my son needs to pay for uni himself.
Then Elizabeth says actually, you won $1 million. “What would stay or change?”
Okay, we’d just buy a roomy house with outdoor space.
But, surprise! None of us won Lotto!
So why did we play this game?
“I think this activity is helpful,” Elizabeth says, “when people don’t actually know what they’re investing for.” It reveals your financial priorities – something to always keep top of mind, especially when it comes to committing to investing and making big decisions.
Knowing Your Worth
Elizabeth left a bad relationship while she was pregnant, had her first child at age 26, then gave up nursing (shiftwork is difficult for a solo mother) to retrain as a financial advisor, initially as an employee. She’s now married with two children.
“My journey to being a financial advisor and my journey to being a mother felt quite intertwined. I was learning about both at the same time. I think there are sometimes similar emotions when people think about parenting and think about money. There are often feelings of uncertainty and confusion.” Sometimes fear, too.
In January 2025, despite feeling terrified, Elizabeth struck out on her own, starting her business Know Your Worth. “You’ve got your net worth financially, and also your worth as a person. I think those are bound together in how we value ourselves. And I think women need to value themselves more.”
Elizabeth never wants clients to feel judged, or silly. She’ll advise anyone, but particularly enjoys providing advice for mothers. “Up to 80% of the gender pay gap can be attributed to the Motherhood Penalty. “This is a phenomenon that describes the impact on your career and pay when you have kids.” As she notes, studies show there’s a subconscious bias that a mother is less suited for a role, a promotion or other opportunities. “It can look like a reduction in pay of up to 4% for every child you have, which is astounding.”
“Now, here’s the really galling bit.” The Fatherhood Bonus. Employers think dads will be really committed to the job, so fathers get paid more than non-fathers. And, maddeningly, more than mothers.
Is KiwiSaver Enough?
Elizabeth explains KiwiSaver’s attributes. “It’s unique to have an investment fund where your employer matches your contributions.” That’s only if you’re a salaried employee (a bummer for the self-employed). Last year, the government made changes to KiwiSaver. The employer contribution shifted from 3% to 3.5%. “And now, if you put in a minimum $1042 for the full 12 months, you’ll get a $260 government contribution, rather than the previous $521.” Now, if you’re earning over $180,000, you don’t get the government contribution.
“KiwiSaver isn’t a magic bullet but it’s a really valuable first building block.” It’s best suited, she says, for people between 16 and 65 who are eligible for government contributions. And KiwiSaver is great if your goal is buying a first home or saving for retirement at age 65. But if those aren’t your primary goals? “That’s where Managed Funds come in. The term describes investment funds that are diversified and managed by a provider.” Think of it as a pot that you and others put money into, then a professional fund manager invests in different assets on your behalf.
“KiwiSaver is a Managed Fund, but one with extra government rules around it.”
From this point on, for simplicity’s sake, when I refer to Managed Funds, I’m talking about non-KiwiSaver Managed Funds.
Investing Is Scary… At First
“Most people feel pretty comfortable about putting their money into KiwiSaver,’ Elizabeth says. “The idea of investing outside that can be terrifying. But Managed Funds aren’t actually riskier than KiwiSaver. What you’re investing in is often pretty much identical.”
“With a Managed Fund, you’re getting exposure to a little bit of everything.” Through your provider, you’ll own units that represent your share in that fund’s assets. “Each unit is made-up of a bit of, for instance, cash from five different banks, some term deposits from banks, some government bonds, and some corporate bonds. Those things don’t have lots of volatility but won’t grow heaps.”
“Then you’ve got what investment terminology calls equities, but it’s just stocks or the sharemarket: as in, buying a piece of a business.” Managed funds do that for you, and some also include exposure to property. “These things go up in value. That’s where growth and volatility comes in. Things that cause a wobble in the sharemarket – including geopolitical events, government regulations, and business cycles – will affect this part of your fund. So if you check your balance that day, you’ll see it drop.” But that’s no reason to panic or make changes, she says.
Elizabeth knows the current geo-political environment feels unsteady. “It’s really common for people to say, of investment, that things are too volatile or uncertain at the moment, or the market’s dropping, or they want to wait till XYZ has happened’. No one, she says, can guess what the sharemarket will do in a short timeframe. “But it’s easy to anticipate what it’ll do long-term, and that’s go up.”
Here’s something Elizabeth often gets asked. “Is now a good time to invest?” Her answer? “It’s always a good time to invest. The best time to invest was yesterday and the second-best time is today.”
Okay, so who might a Managed Fund suit?
“For a student, stay-at-home mum, self-employed person or anyone not in salaried employment, a Managed Fund is really good because you don’t get the KiwiSaver employer contribution. A Managed Fund doesn’t necessarily have to be instead of KiwiSaver. But you might want to reduce your KiwiSaver contributions, and increase your contributions to a Managed Fund.”
With Managed Funds, she says, you pay a little bit more in fees than with KiwiSaver, but you’re building an investment which gives you more control, flexibility and accessibility than KiwiSaver does. You can withdraw money from a Managed Fund when needed.
Risk Profile
If you’re retiring in a few years, Elizabeth says you might want to invest conservatively. “But if your timeframe is 30 years until retirement, you can usually afford to take more risk.” When you’re getting closer to retirement, you can reduce risk.
“Also, you don’t have to withdraw KiwiSaver money at age 65. You can leave it there still being invested. Then if something changes, like a health event, you adjust the plan.”
Elizabeth has clients complete a risk profile, starting with six questions.
1. Your financial priorities (do the Lotto exercise).
2. How much money do you need to achieve those?
3. When do you need it?
4. How much risk can you handle [psychologically]?
5. How much risk do you need to take to achieve your financial priorities?
6. To bridge any gap between points four and five, you either need to contribute more money or take more risk.
If people want to chat, Elizabeth does free 30-minute Teams meetings.
Often, she doesn’t charge upfront fees for her time, because financial advisers are partially paid by the providers they work with and receive a percentage fee from the money they advise on (from 0.25% for KiwiSaver to up to 1% for Managed Funds).
Elizabeth also offers two fee-based, big-picture financial-planning services – some with individuals, some with couples.
A Word of Caution
“As someone who’s been divorced, and has had separated women as clients, be cautious about making financial decisions too heavily based on your partner,” Elizabeth says. “But obviously financial decisions should be a household decision.”
If you’re going on parental leave, your partner should, if possible, put money into your KiwiSaver, so you don’t miss out on government contributions and cumulative returns.
“Money is one of the biggest causes of disagreements in relationships. I think lots of us learn not to bring the topic up.” But that can literally cost you.
Meanwhile, Elizabeth says that the more her clients learn about investment, the more comfortable they feel about doing it. “Their confidence grows and they feel they can be a calculated risk-taker.”
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