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Investing Across Generations

Many people want to see their children and grandchildren well set up for life. Scott McKenzie says that’s why PMG started the Generation Fund.

24 August 2022

In March, Florida governor Ron DeSantis signed legislation into law requiring high school students in the US to pass a financial literacy course to graduate.

DeSantis said: “This will provide a foundation for the students to learn the basics of money management, understanding debt, understanding how to balance your chequebook, and understanding the fundamentals of investing.”

Florida joins seven other states that already require a personal finance course before graduation.

In New Zealand, financial education is not mandated as a part of the school curriculum, and a recent survey of 2646 young New Zealanders by the New Zealand Council for Educational Research* shared these sobering results:

  • 35 per cent of pupils felt they had learnt “almost nothing”.
  • 38 per cent learnt “some things” about money at school.

Couple this information with the crippling effects of a pandemic, and we see why the gap between the haves and the have-nots has accelerated at an alarming speed.

Can we stop this spiral? I believe we can – and it starts with early education and investment accessibility.

It starts at home

Financial literacy is key to building wealth, and can be summarised as making money, saving money, and investing money.

If children are not learning basic financial skills at school, the baton then passes to parents, who have a responsibility to educate their children and have ‘The talk’.

Obviously, this talk should be straightforward and appropriate. A three-year-old does not need to know the differences between fixed and variable annuities or the impact of rising interest rates on a home loan.

At PMG, we have fourth-generation investors, and these families discuss regularly the importance of saving, planning, and tracking investments.

In fact, most of the families in our investor story videos repeatedly say you should start your investment journey young, compound returns, and plan ahead.

Generational wealth

At PMG, we’re seeing a growing demographic of investors who’ve benefited from generational wealth creation.

These families have a focus on education and a mentality of ‘custodianship’, which has allowed them to ensure that multiple generations of their family can thrive.

A driving force behind investing in property is to create both a passive income (monthly or quarterly cash income) and capital gain (increase in property value) to provide a comfortable lifestyle.

This growth acts as a future nest egg for their beneficiaries, so they too can enjoy a similar lifestyle as their parents and grandparents.

Why property works

Historically, property has been, and will likely continue to be, one of the more successful long-term investment platforms for building long-term wealth – and in high inflationary environments it performs well as an inflation hedge.

At PMG we’re walking the talk.

We feel a deep responsibility to our investors, tenants, suppliers, contractors, and community to provide financial direction, so we created a PMG Charitable Trust that’s committed to supporting financial literacy programmes across New Zealand.

We also have a strong commitment to educational content. We use:

  • Website tools, creating online compounding and cash return calculators that help those seeking to invest, to gauge what their investment really looks like for them.
  • Multiple free and downloadable educational series that cover the current economic environment.
  • Free investor seminars through the year, normally with high-profile economists who educate and provide a unique perspective.

Investment accessibility

PMG is committed to helping Kiwis achieve financial freedom by providing access to direct investment in high-quality commercial real estate, at an entry level that most everyday New Zealanders can realistically attain.

With this in mind, last year PMG launched a new unlisted commercial property fund named PMG Generation Fund.

At that time, the entry level was NZ$1000, which gave investors access to a property portfolio valued at NZ$166 million, with a forecast gross cash return of 5.8 per cent per annum, paid monthly**.

Additionally, this fund was available to invest through investment platforms Sharesies and InvestNow for considerably less.

In just over two years, that fund has grown to be PMG’s second largest portfolio by total value, with an estimated NZ$204m*** of assets under management, and six properties offering a diversified mix of national brands, including Torpedo7, Countdown, BP, Kmart, and Coca-Cola Amatil.

Of particular note to original investors is that since inception, PMG Generation Fund has performed well, with a total annualised gross cash return, including unrealised capital growth, of 12.9 per cent****.

Despite its name and the overall younger profile, the fund is still popular with the industry’s traditional demographic – retirees who require regular and reliable income streams and security of their wealth for future generations.

This clearly aligns with the fund’s strategy for sustainable growth – to offer an unlisted property commercial fund that’s diversified by geography, tenant and industry, with an entry level that’s attainable for most.

Investors can reinvest returns, make regular contributions, and benefit from compounding returns.

We’re delighted to be one of the first funds managers in New Zealand creating alternative and attractive investment options for younger New Zealanders just beginning their journey towards generational wealth and financial freedom.

We always say, don’t wait to invest in property, invest in property and wait.

Content of this article is the opinion of Scott McKenzie and is not intended as personalised financial advice. You should seek independent financial advice from an authorised financial adviser before making any investment decisions.

* https://cffc-assets-prod.s3.ap-southeast-2.amazonaws.com/public/Uploads/Sorted-in-Schools-Research-Policy/3ef25c819c/secondary-schools-report.pdf

** Historic return as of 20 May 2020.

*** As of 31 March 2022.

**** Past performance is no guarantee of future returns.

Informed Investor's content comes from sources that Informed Investor magazine considers accurate, but we do not guarantee its accuracy. Charts in Informed Investor are visually indicative, not exact. The content of Informed Investor is intended as general information only, and you use it at your own risk.


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