Legal Tender - 10th Anniversary. By Laetitia Peterson and Claudia Williams.

I joined forces with my colleague, Claudia Williams, to write this article to celebrate the publication of my book Legal Tender in 2015. The book was based on findings from interviews with 65 New Zealand lawyers about their feelings, knowledge and behaviours towards money. Since the book’s publication, a lot of water has gone under the bridge, but we conclude that the advice for lawyers remains the same. Based on broad assumptions, Claudia shows how regular contributions to a well-structured and managed investment portfolio, can greatly contribute to a comfortable retirement. Looking in the rearview mirror, despite the ups and downs in markets and geo-political and economic conditions, portfolios have continued to perform well in the last 10 years with annualised returns for our model portfolios ranging from around 8% to 10% (after management fees but before advice fees and tax and depending on the level of risk taken).

These realised rates of return are close to the expected rates of return in our modelling which means that clients who implemented our advice 10 years ago would be on track to achieving their goals. This gives us confidence that by being disciplined about investing, lawyers can tap into this engine of returns to give them a real boost for a comfortable retirement after a rewarding legal career. The investment philosophy in Legal Tender is based around a belief that markets work and that a diversified portfolio is the most reliable way to achieve investment goals over the medium to long term. This contrasts a belief that superior returns can only be achieved through stock picking or timing the market when analysis has repeatedly shown that active fund managers do not consistently deliver market returns. In our experience, however, it is easy to get distracted and of course, and it often takes the advice of a trusted financial adviser to steady the ship and stay focused on the long-term plan.