1 00:00:02,040 --> 00:00:04,840 Speaker 1: Welcome back to start here, the very special mini series 2 00:00:04,880 --> 00:00:08,879 Speaker 1: within Sugar Mama's Fireplay, where I proudly answer your real 3 00:00:08,960 --> 00:00:14,520 Speaker 1: life money questions with practical, empowering steps and general advice. Now, 4 00:00:14,560 --> 00:00:18,120 Speaker 1: today's question comes in for a listener who wrote, Hi, Catta, 5 00:00:18,360 --> 00:00:21,120 Speaker 1: I've never paid attention to my super until discovering you 6 00:00:21,200 --> 00:00:25,119 Speaker 1: on Instagram. I realize that I am in the balanced 7 00:00:25,200 --> 00:00:28,120 Speaker 1: investment option for my super and I don't think that 8 00:00:28,160 --> 00:00:31,760 Speaker 1: it is right for me or my age group. Should 9 00:00:31,800 --> 00:00:34,080 Speaker 1: I just go and change it to growth or should 10 00:00:34,080 --> 00:00:38,519 Speaker 1: I go and change it to high growth? All right? Okay, firstly, 11 00:00:38,760 --> 00:00:42,960 Speaker 1: thank you for asking this question. It is a brilliant question, 12 00:00:43,880 --> 00:00:46,360 Speaker 1: and a lot of people ask me the same thing. 13 00:00:47,000 --> 00:00:48,520 Speaker 1: But I also want to say a lot of people 14 00:00:48,600 --> 00:00:51,519 Speaker 1: don't even bother checking their super let alone where their 15 00:00:51,520 --> 00:00:54,640 Speaker 1: superinnovation money is actually invested in. So the fact you're 16 00:00:54,680 --> 00:00:58,640 Speaker 1: asking this means that you are taking complete ownership and 17 00:00:58,720 --> 00:01:03,520 Speaker 1: it is the first and most powerful step in getting started. Now, 18 00:01:03,640 --> 00:01:06,559 Speaker 1: a quick reminder to this listener who wrote this question 19 00:01:06,800 --> 00:01:09,240 Speaker 1: and asked this question and everyone else listening right now, 20 00:01:09,280 --> 00:01:14,920 Speaker 1: is I cannot give you personal financial advice. I am 21 00:01:14,959 --> 00:01:17,600 Speaker 1: a licensed financial planner. Yes, but I don't know anything 22 00:01:17,600 --> 00:01:20,440 Speaker 1: about you. I don't know about your assets, your liabilities, 23 00:01:20,920 --> 00:01:22,960 Speaker 1: your goals and your dreams and the deadlines of all 24 00:01:22,959 --> 00:01:25,759 Speaker 1: of those goals and dreams. So please bear that in mind. 25 00:01:26,200 --> 00:01:30,680 Speaker 1: But what I can do is equally as important and helpful, 26 00:01:31,120 --> 00:01:33,960 Speaker 1: and that is I can explain to you how superannuation works, 27 00:01:34,800 --> 00:01:40,240 Speaker 1: why your investment option for your super is so incredibly important, 28 00:01:40,840 --> 00:01:43,800 Speaker 1: and I can also share with you the key questions 29 00:01:43,840 --> 00:01:47,680 Speaker 1: that you have got to be asking yourself now before 30 00:01:47,680 --> 00:01:51,080 Speaker 1: you go and make any changes to your super. This way, 31 00:01:51,560 --> 00:01:54,440 Speaker 1: when you do make those decisions, you know, you tick 32 00:01:54,480 --> 00:01:56,480 Speaker 1: that box, you sign that form, you send it off, 33 00:01:57,000 --> 00:02:02,080 Speaker 1: you will feel so much more confident, informed, educated and empowered, 34 00:02:02,560 --> 00:02:05,080 Speaker 1: and you know that you're making the best choice for 35 00:02:05,160 --> 00:02:09,160 Speaker 1: yourself and your goals and dreams. And you will even 36 00:02:09,360 --> 00:02:11,960 Speaker 1: know how this works. So that if you do go 37 00:02:12,000 --> 00:02:14,200 Speaker 1: and see a financial planner, which I would always recommend, 38 00:02:14,720 --> 00:02:17,480 Speaker 1: you turn up to their office or that meeting armed 39 00:02:17,520 --> 00:02:23,440 Speaker 1: with so much information, direction, purpose and clarity. So in 40 00:02:23,520 --> 00:02:26,440 Speaker 1: the meantime, to help you get started, let's go through 41 00:02:26,520 --> 00:02:28,560 Speaker 1: all the things that you need to know and understand 42 00:02:28,600 --> 00:02:31,000 Speaker 1: and do to help make sure that you invest your 43 00:02:31,080 --> 00:02:49,520 Speaker 1: super appropriately. So let's get cracking, all right. Okay, First 44 00:02:49,560 --> 00:02:54,360 Speaker 1: of all, let's talk about why superinnuation investment options matter 45 00:02:54,400 --> 00:02:56,120 Speaker 1: so much, because I think it's great that you're asking 46 00:02:56,120 --> 00:02:57,640 Speaker 1: this question, but I really want to make sure you 47 00:02:57,680 --> 00:03:01,760 Speaker 1: understand why it's so important. Souperinnuation isn't just a government 48 00:03:01,800 --> 00:03:05,120 Speaker 1: boxer you tick. It is your money, and your money 49 00:03:05,160 --> 00:03:09,839 Speaker 1: that is invested for your future financial security and independence 50 00:03:10,360 --> 00:03:14,280 Speaker 1: for when you go and retire. The investment option you 51 00:03:14,440 --> 00:03:19,040 Speaker 1: choose pays a crucial role in how much you could 52 00:03:19,080 --> 00:03:24,600 Speaker 1: potentially have in retirement. Conservative, balanced growth, high growth. These 53 00:03:24,600 --> 00:03:30,520 Speaker 1: aren't just labels. They represent very different mixes of financial assets. 54 00:03:31,280 --> 00:03:37,880 Speaker 1: Australian shares, international shares, property, bonds, cash, the list goes on. Now, 55 00:03:38,280 --> 00:03:42,600 Speaker 1: a balanced fund or a balance investment mix, which is 56 00:03:42,920 --> 00:03:46,000 Speaker 1: often the default one for people who don't bother selecting 57 00:03:46,040 --> 00:03:50,080 Speaker 1: their investment option, is typically a mix of around sixty 58 00:03:50,120 --> 00:03:54,280 Speaker 1: percent in growth assets such as Australian shares, international shares 59 00:03:54,280 --> 00:03:57,520 Speaker 1: and property, and then forty percent in what we call 60 00:03:57,680 --> 00:04:01,480 Speaker 1: defensive assets. So these are assets which are pretty stable 61 00:04:01,520 --> 00:04:04,720 Speaker 1: and consistent, like you know, cash, fix interest bonds and 62 00:04:04,760 --> 00:04:08,800 Speaker 1: so forth. Now it means that you've got a mix 63 00:04:09,040 --> 00:04:14,680 Speaker 1: of both income and growth with this particular balanced profile. Now, 64 00:04:15,160 --> 00:04:19,520 Speaker 1: this profile can be pretty consistent and there isn't too 65 00:04:19,640 --> 00:04:24,159 Speaker 1: much volatility, So this can be great for people who 66 00:04:24,279 --> 00:04:26,920 Speaker 1: are nervous or investing and don't feel comfortable about risk, 67 00:04:27,520 --> 00:04:32,240 Speaker 1: but it can also come with some potential costs. The 68 00:04:32,360 --> 00:04:36,120 Speaker 1: returns may not necessarily be as strong. If you go 69 00:04:36,200 --> 00:04:40,200 Speaker 1: and look at there were historical returns of for example, 70 00:04:40,240 --> 00:04:44,240 Speaker 1: are balanced over a high growth over the long run, 71 00:04:44,360 --> 00:04:46,720 Speaker 1: say a twenty year period, a thirty year period, even 72 00:04:46,760 --> 00:04:49,719 Speaker 1: a forty year period, you will see that the returns 73 00:04:49,760 --> 00:04:53,320 Speaker 1: of a balance fund in comparison to say growth fund 74 00:04:53,520 --> 00:04:58,320 Speaker 1: are quite different. But if you look closer at the smaller, 75 00:04:58,400 --> 00:05:01,120 Speaker 1: shorter periods of time, there's a a lot more volatility. 76 00:05:01,560 --> 00:05:05,280 Speaker 1: The balance fund line looks smoother, more consistent, even a 77 00:05:05,320 --> 00:05:09,440 Speaker 1: little bit more reliable if you want. But the growth fund, 78 00:05:09,680 --> 00:05:13,880 Speaker 1: whilst it's outperformed the balance fund in most scenarios, is 79 00:05:13,920 --> 00:05:16,560 Speaker 1: a lot more volatile. That line, that little line, it 80 00:05:16,640 --> 00:05:19,800 Speaker 1: bounces around like a yogo, but when you pull back 81 00:05:19,800 --> 00:05:23,640 Speaker 1: from the big picture, it tends to have outperformed. So 82 00:05:23,800 --> 00:05:26,599 Speaker 1: it's important that you understand if you do go with 83 00:05:26,680 --> 00:05:28,640 Speaker 1: something that's more aggressive, there's going to be a lot 84 00:05:28,680 --> 00:05:31,800 Speaker 1: more volatility. You're going to see your balance fluctuate a 85 00:05:31,839 --> 00:05:34,800 Speaker 1: lot more in the short to medium term. If you 86 00:05:34,920 --> 00:05:36,960 Speaker 1: look at say a growth or in your case, you're 87 00:05:36,960 --> 00:05:39,279 Speaker 1: looking at a growth and a high growth investment mix, 88 00:05:39,800 --> 00:05:42,360 Speaker 1: this is going to be tilted with a much heavier 89 00:05:42,400 --> 00:05:47,440 Speaker 1: bias towards those growth investments, the shares, the property, and 90 00:05:47,560 --> 00:05:50,120 Speaker 1: you're going to have a smaller allocation therefore to those 91 00:05:50,160 --> 00:05:54,680 Speaker 1: more conservative assets like cash and fixed interest. So you 92 00:05:54,720 --> 00:05:58,599 Speaker 1: will see those spikes in your portfolio. Now, the upside 93 00:05:58,600 --> 00:06:02,200 Speaker 1: of that is your increased your potential for higher returns 94 00:06:02,400 --> 00:06:07,599 Speaker 1: over the long run, over the decades. So yes, if 95 00:06:07,640 --> 00:06:10,239 Speaker 1: you have decades ahead of you, you have that time. 96 00:06:10,320 --> 00:06:13,080 Speaker 1: It is a really important factor. It's a big factor. 97 00:06:13,720 --> 00:06:17,240 Speaker 1: And the general rule of thumb is the younger you are, 98 00:06:17,640 --> 00:06:20,000 Speaker 1: the more time that you have to ride out all 99 00:06:20,080 --> 00:06:23,360 Speaker 1: those short to medium terms of volatility where the market 100 00:06:23,400 --> 00:06:26,839 Speaker 1: bounces up and down. We have those crashes, those corrections, 101 00:06:26,880 --> 00:06:29,200 Speaker 1: those pullbacks, which are normal and natural. That's part of 102 00:06:29,279 --> 00:06:32,839 Speaker 1: the journey because you can sit through those, hopefully not 103 00:06:32,920 --> 00:06:35,920 Speaker 1: do anything and not react, but be part of the 104 00:06:36,000 --> 00:06:39,200 Speaker 1: journey for when the market does recover. The bounce back, 105 00:06:39,800 --> 00:06:42,880 Speaker 1: and over the long run, you were rewarded for being consistent, 106 00:06:42,960 --> 00:06:47,080 Speaker 1: for being patient, not reacting, and seeing hopefully those higher 107 00:06:47,120 --> 00:06:50,080 Speaker 1: returns with your money, where your superannuation money is working 108 00:06:50,080 --> 00:06:52,919 Speaker 1: harder for you and you hopefully end up with a 109 00:06:53,000 --> 00:06:56,480 Speaker 1: much bigger superannuation investment portfolio when you go to retire, 110 00:06:56,480 --> 00:07:00,000 Speaker 1: which obviously in turn gives you greater and more luxury, 111 00:07:00,279 --> 00:07:04,880 Speaker 1: financial freedom and independence. But this isn't the only factor. 112 00:07:05,600 --> 00:07:08,240 Speaker 1: There are so many other things that come into play 113 00:07:08,279 --> 00:07:10,240 Speaker 1: that you need to understand, So don't just go with 114 00:07:10,280 --> 00:07:13,680 Speaker 1: that sweeping rule. And that brings me to the next 115 00:07:13,920 --> 00:07:17,160 Speaker 1: step after you understand why this is so important, and 116 00:07:17,200 --> 00:07:19,920 Speaker 1: that is to do a risk profile. One of the 117 00:07:20,080 --> 00:07:24,440 Speaker 1: biggest mistakes that people make is assuming that age alone 118 00:07:25,000 --> 00:07:28,720 Speaker 1: dictates their investment option. But the reality is we are 119 00:07:28,800 --> 00:07:32,480 Speaker 1: all very very different. We have different goals, we have 120 00:07:32,480 --> 00:07:36,400 Speaker 1: different deadlines for those goals, we have different personal experiences 121 00:07:36,440 --> 00:07:39,480 Speaker 1: with money and with investing, and we also have different 122 00:07:39,560 --> 00:07:45,840 Speaker 1: levels of financial education. Using this generalized you know, sweeping 123 00:07:45,880 --> 00:07:51,080 Speaker 1: generalization is a great guide, definitely, but it is not 124 00:07:51,240 --> 00:07:55,200 Speaker 1: to be relied on, which is why I recommend everyone 125 00:07:55,480 --> 00:07:59,080 Speaker 1: does a risk profile questionnaire now There are hundreds of 126 00:07:59,120 --> 00:08:02,160 Speaker 1: these available online. They are free. If you check your 127 00:08:02,160 --> 00:08:04,800 Speaker 1: superannuation account provider, they will most likely have a risk 128 00:08:04,840 --> 00:08:08,360 Speaker 1: profile questionnaire available for you. And my favorite one, which 129 00:08:08,360 --> 00:08:11,120 Speaker 1: I've spoken about before, is the Vanguard Risk Profile Questionnaire, 130 00:08:11,120 --> 00:08:13,760 Speaker 1: which I think is about thirteen questions and it does 131 00:08:13,800 --> 00:08:16,680 Speaker 1: there's no wrong or right answers. It's multiple choice. Every 132 00:08:16,720 --> 00:08:18,920 Speaker 1: answer is right. But it helps give you a really 133 00:08:18,960 --> 00:08:21,960 Speaker 1: good guide. And even with the Vanguard wrist profile questionare 134 00:08:21,960 --> 00:08:23,720 Speaker 1: it gives you a spit out at the very end 135 00:08:23,760 --> 00:08:26,480 Speaker 1: where it actually shows you the exact breakdown of what 136 00:08:26,520 --> 00:08:29,200 Speaker 1: your asset allocation should look like, So it will say 137 00:08:29,240 --> 00:08:33,960 Speaker 1: like forty five percent international, thirty five percent Australian, fifteen 138 00:08:33,960 --> 00:08:37,040 Speaker 1: Property for example, will give you much more detailed breakdown, 139 00:08:37,080 --> 00:08:41,839 Speaker 1: but they're all very similar and they're really actually pretty 140 00:08:41,920 --> 00:08:46,960 Speaker 1: easy to complete. Now. The questions that they ask you 141 00:08:46,960 --> 00:08:50,840 Speaker 1: in this risk profile are very straightforward and it's really 142 00:08:50,880 --> 00:08:54,080 Speaker 1: to gauge like a lot about yourself, you know, it's 143 00:08:54,240 --> 00:08:57,640 Speaker 1: very insightful and the questions that are asked, the questions like, 144 00:08:57,679 --> 00:08:59,680 Speaker 1: you know, how do you feel if your superinnuation account 145 00:08:59,679 --> 00:09:04,120 Speaker 1: balanced by twenty percent in a market downturn or would 146 00:09:04,160 --> 00:09:05,920 Speaker 1: you panic when a market falls or do you see 147 00:09:05,920 --> 00:09:08,960 Speaker 1: it as a buying opportunity? Or how much time do 148 00:09:09,000 --> 00:09:10,719 Speaker 1: you have until you need to access this money. These 149 00:09:10,760 --> 00:09:13,440 Speaker 1: are really important questions to ask to help gauge what 150 00:09:13,640 --> 00:09:15,640 Speaker 1: is right for you. And there might be someone who's 151 00:09:15,640 --> 00:09:18,400 Speaker 1: actually a high growth investor but needs to access that 152 00:09:18,440 --> 00:09:21,520 Speaker 1: money within say the next three years. This will help 153 00:09:21,559 --> 00:09:23,719 Speaker 1: make sure that even though they are technically a high 154 00:09:23,760 --> 00:09:28,319 Speaker 1: growth investor, they may actually be requiring a more conservative 155 00:09:28,320 --> 00:09:32,040 Speaker 1: investment allocation in the short term. So it's really valuable 156 00:09:32,600 --> 00:09:35,680 Speaker 1: and the answers that you put into these risk profiles 157 00:09:36,120 --> 00:09:39,760 Speaker 1: help reveal your own risk tolerance and not just look 158 00:09:39,760 --> 00:09:42,840 Speaker 1: at your time horizon, and that is critical because the 159 00:09:42,880 --> 00:09:46,400 Speaker 1: best profile is the one that you pick yourself and 160 00:09:46,440 --> 00:09:49,640 Speaker 1: that you can stick to through the tough times and 161 00:09:49,720 --> 00:09:52,880 Speaker 1: you remain focused and of course having that resilient mindset 162 00:09:53,080 --> 00:09:57,160 Speaker 1: and attitude. A classic example of this is I am 163 00:09:57,240 --> 00:10:01,360 Speaker 1: myself personally a high growth investor. For me, I want 164 00:10:01,480 --> 00:10:04,079 Speaker 1: Australian shares, International shares and property in my super I 165 00:10:04,080 --> 00:10:05,880 Speaker 1: don't want anything else it's going to hold me back. 166 00:10:05,920 --> 00:10:07,960 Speaker 1: I want my money working as efficiently as possible, and 167 00:10:08,040 --> 00:10:11,360 Speaker 1: I don't care about market volatility. I'm quite comfortable seeing 168 00:10:11,679 --> 00:10:14,280 Speaker 1: the market bounce around because I go great buying opportunities. 169 00:10:14,280 --> 00:10:16,839 Speaker 1: I can add more at a discount. You know, it's 170 00:10:16,840 --> 00:10:20,000 Speaker 1: like a stock take clearance with shares. However, one of 171 00:10:20,000 --> 00:10:23,800 Speaker 1: my best friends and we're in very similar situations with 172 00:10:23,960 --> 00:10:26,280 Speaker 1: similar goals that we want to retire comfortably, we want 173 00:10:26,320 --> 00:10:29,640 Speaker 1: to retire rich. But she's different in that she feels 174 00:10:30,040 --> 00:10:34,360 Speaker 1: really uncomfortable with volatility. It makes her nervous and makes 175 00:10:34,400 --> 00:10:37,920 Speaker 1: her panic, It keeps her up at night. So that 176 00:10:38,160 --> 00:10:40,719 Speaker 1: sweeping generalization rule of her being the same age as 177 00:10:40,720 --> 00:10:42,560 Speaker 1: me and should be investing in a growth or high 178 00:10:42,559 --> 00:10:45,480 Speaker 1: growth is wrought with danger. It is wrong for her. 179 00:10:46,000 --> 00:10:49,160 Speaker 1: So this is the value of doing an investing time, 180 00:10:49,280 --> 00:10:52,360 Speaker 1: doing the risk profile. And you know, in this situation, 181 00:10:52,440 --> 00:10:54,720 Speaker 1: if she had invested like I had, she would have 182 00:10:54,760 --> 00:10:57,800 Speaker 1: panicked and she would have sold everything and she would 183 00:10:57,840 --> 00:10:59,800 Speaker 1: have switched out of that growth or high growth into 184 00:10:59,840 --> 00:11:03,680 Speaker 1: say balanced or cash, and that would have meant she 185 00:11:03,720 --> 00:11:07,240 Speaker 1: would have crystallized her losses and then she would have 186 00:11:07,240 --> 00:11:10,720 Speaker 1: also missed out on the recovery. So, if you decide 187 00:11:10,760 --> 00:11:13,200 Speaker 1: to invest in a growth or a high growth asset, 188 00:11:13,200 --> 00:11:14,800 Speaker 1: a location you need to know that you're going to 189 00:11:14,840 --> 00:11:17,760 Speaker 1: stick to it for the long run, and you are 190 00:11:17,760 --> 00:11:20,880 Speaker 1: going to know that the market pullbacks will happen, but 191 00:11:20,960 --> 00:11:22,560 Speaker 1: you're going to know that you are not going to 192 00:11:22,679 --> 00:11:26,840 Speaker 1: panic or react negatively. Now, once you've done your risk profile, 193 00:11:27,400 --> 00:11:30,160 Speaker 1: your results can be used as a great guy to 194 00:11:30,200 --> 00:11:33,200 Speaker 1: help you work out where to invest your superinhoration money. 195 00:11:33,800 --> 00:11:36,520 Speaker 1: For example, you might discover that you are, in fact, yes, 196 00:11:36,600 --> 00:11:39,640 Speaker 1: a high growth investor, and you can find the appropriate 197 00:11:39,720 --> 00:11:42,400 Speaker 1: high growth fund or ETF if you like. But it 198 00:11:42,480 --> 00:11:46,160 Speaker 1: actually goes further than this. You might actually decide that, yes, 199 00:11:46,200 --> 00:11:49,079 Speaker 1: I'm a high growth investor, but I actually want to 200 00:11:49,320 --> 00:11:53,400 Speaker 1: access a wider investment menu within my super. I don't 201 00:11:53,400 --> 00:11:56,199 Speaker 1: want to just go with that generic investment optiontion of 202 00:11:56,280 --> 00:11:59,360 Speaker 1: the just say the high growth managed fund. I want 203 00:11:59,360 --> 00:12:02,160 Speaker 1: to be more particular. I want to be able to 204 00:12:02,200 --> 00:12:06,280 Speaker 1: take my forty five percent of international exposure and go 205 00:12:06,320 --> 00:12:09,720 Speaker 1: all right, I'm going to invest fifteen percent with the 206 00:12:09,760 --> 00:12:13,679 Speaker 1: Platinum International ETF or fund. I'm going to invest another 207 00:12:13,840 --> 00:12:18,640 Speaker 1: fifteen percent with the Vanguard US Index ETF. You might 208 00:12:18,679 --> 00:12:22,679 Speaker 1: want to start being really strategic and actually deciding where 209 00:12:22,720 --> 00:12:26,040 Speaker 1: that money is invested rather than going than the basket 210 00:12:26,080 --> 00:12:29,920 Speaker 1: option approach. You know, if this is the case, that 211 00:12:30,120 --> 00:12:32,720 Speaker 1: is brilliant because it shows you're so much more engaged. 212 00:12:33,000 --> 00:12:35,000 Speaker 1: And it goes to that saying, obviously, do your research 213 00:12:35,040 --> 00:12:38,520 Speaker 1: before you go and pick those individual investments if that's 214 00:12:38,559 --> 00:12:41,520 Speaker 1: what you want to do. And I also highly recommend 215 00:12:41,600 --> 00:12:44,520 Speaker 1: pick up the phone and speak to your superannuation provider 216 00:12:44,520 --> 00:12:48,439 Speaker 1: because today so many more of these superannuation account providers 217 00:12:48,520 --> 00:12:52,720 Speaker 1: actually offer general advice for free or for a fixed 218 00:12:52,800 --> 00:12:56,200 Speaker 1: fee limited advice and that could be a great investment 219 00:12:56,280 --> 00:12:58,959 Speaker 1: option for you because you actually get some advice and 220 00:12:59,080 --> 00:13:02,600 Speaker 1: guidance from someone who is educated and experienced to help 221 00:13:02,640 --> 00:13:05,679 Speaker 1: you work out exactly how to go and invest your 222 00:13:06,280 --> 00:13:10,400 Speaker 1: superannuation money in accordance to your risk profile. But my 223 00:13:10,559 --> 00:13:13,800 Speaker 1: point here is you don't have to just settle for 224 00:13:13,880 --> 00:13:18,000 Speaker 1: that generic investor profile investment option. You can actually build 225 00:13:18,040 --> 00:13:23,880 Speaker 1: your own I guess, custom bougie, sophisticated high growth investment 226 00:13:23,880 --> 00:13:28,720 Speaker 1: optional or even balanced option within your superannuation account. But 227 00:13:29,240 --> 00:13:31,640 Speaker 1: I have a big word of warning here, and this 228 00:13:31,760 --> 00:13:35,680 Speaker 1: is really important before you make any changes to your 229 00:13:35,760 --> 00:13:40,160 Speaker 1: investment option, you've got to know the costs involved. That 230 00:13:40,320 --> 00:13:44,839 Speaker 1: is the capital gains in changing your underlying investments, as 231 00:13:44,840 --> 00:13:47,240 Speaker 1: well as the brokerage costs the buyer sells. As an 232 00:13:47,320 --> 00:13:51,040 Speaker 1: absolute minimum. If you're in the balance superfund and you 233 00:13:51,160 --> 00:13:53,800 Speaker 1: have an unrealized capital gain and you want to go 234 00:13:53,840 --> 00:13:56,000 Speaker 1: and change this to the high growth or the growth option, 235 00:13:56,559 --> 00:13:58,560 Speaker 1: this means you've got to, you know, super fund has 236 00:13:58,559 --> 00:14:03,040 Speaker 1: to physically sell down the balance fund and use those proceeds. Now, 237 00:14:03,120 --> 00:14:06,319 Speaker 1: in doing that selling down, it triggers capital gains tax. 238 00:14:06,880 --> 00:14:10,240 Speaker 1: And whilst capital gains tax within super is relatively small 239 00:14:10,360 --> 00:14:12,520 Speaker 1: between ten to fifteen percent depending on how long it's 240 00:14:12,520 --> 00:14:15,920 Speaker 1: been held for, that tax has to be paid out 241 00:14:15,960 --> 00:14:18,280 Speaker 1: of the proceeds, which means you're going to have less 242 00:14:18,360 --> 00:14:21,200 Speaker 1: in your super. You'll see your portfolio of value drop. 243 00:14:22,080 --> 00:14:24,240 Speaker 1: Then of course you've got to obviously have those buy 244 00:14:24,480 --> 00:14:26,560 Speaker 1: and sell costs to get back in the market like 245 00:14:26,640 --> 00:14:30,680 Speaker 1: normally brokerage depending on the underlying investment. So to make 246 00:14:30,760 --> 00:14:33,720 Speaker 1: these changes going from the old fund to the new one, 247 00:14:33,880 --> 00:14:36,200 Speaker 1: they're going to be costs involved. They're going to be taxes. 248 00:14:36,240 --> 00:14:41,000 Speaker 1: And this isn't necessarily a bad cost or expense and 249 00:14:41,040 --> 00:14:44,400 Speaker 1: they aren't avoidable, but you need to be aware of 250 00:14:44,440 --> 00:14:48,240 Speaker 1: these costs. So that you are aware, you're informed, and 251 00:14:48,800 --> 00:14:50,680 Speaker 1: you know that this is right for you, and you 252 00:14:50,720 --> 00:14:53,040 Speaker 1: know that your super is invested for your long term interests. 253 00:14:53,720 --> 00:14:55,600 Speaker 1: And of course, like there are obviously a whole pile 254 00:14:55,680 --> 00:14:58,760 Speaker 1: of other little expenses involved in buying and selling, which 255 00:14:58,760 --> 00:15:01,000 Speaker 1: I won't go into in this episod, but they're the 256 00:15:01,000 --> 00:15:03,520 Speaker 1: top ones that you need to be aware of. And 257 00:15:03,800 --> 00:15:05,840 Speaker 1: you also need to remember that you do not want 258 00:15:05,840 --> 00:15:08,800 Speaker 1: to chop and change your investment profile. You will underlying 259 00:15:08,800 --> 00:15:11,720 Speaker 1: investments all the time because it's expensive to do so, 260 00:15:12,040 --> 00:15:15,680 Speaker 1: and you're potentially missing out on the long term growth opportunities. 261 00:15:16,280 --> 00:15:19,440 Speaker 1: Now this albem brings me to step three, and that 262 00:15:19,640 --> 00:15:22,280 Speaker 1: is to actually take a moment whilst you're looking at 263 00:15:22,320 --> 00:15:27,920 Speaker 1: your investment options and to review your whole entire superannuation fund. Now, 264 00:15:29,080 --> 00:15:30,880 Speaker 1: if we just zoom out for a second, you know 265 00:15:30,920 --> 00:15:33,760 Speaker 1: you're checking the investment options, which is great, you're engaged, 266 00:15:33,760 --> 00:15:38,800 Speaker 1: you're informed, you are making some important decisions. But another 267 00:15:38,880 --> 00:15:40,720 Speaker 1: question to ask whilst we're doing this and we're in 268 00:15:40,760 --> 00:15:43,000 Speaker 1: this place, and that is to ask yourself is your 269 00:15:43,040 --> 00:15:47,440 Speaker 1: superannuation fund? You know, whether it be host Plus, whether 270 00:15:47,480 --> 00:15:51,880 Speaker 1: it be Macquarie, asgard bt, whoever it may be. Is 271 00:15:51,920 --> 00:15:55,360 Speaker 1: this the right superinneration account provider for you? You know you're 272 00:15:55,440 --> 00:15:58,920 Speaker 1: questioning whether this is this fund, this balance fund is 273 00:15:58,960 --> 00:16:00,400 Speaker 1: right to you, but you also made need to question 274 00:16:00,480 --> 00:16:03,360 Speaker 1: whether the actual account is right for you. So here 275 00:16:03,400 --> 00:16:07,440 Speaker 1: are some things that I recommend you quickly check. Number one, 276 00:16:07,640 --> 00:16:10,720 Speaker 1: the fees. Are your fees competitive and good value for money? 277 00:16:11,360 --> 00:16:14,200 Speaker 1: High fees can eat away in your retirement balance. We 278 00:16:14,280 --> 00:16:17,160 Speaker 1: all know that. But at the same time, the cheapest 279 00:16:17,200 --> 00:16:20,240 Speaker 1: superannuation account isn't always the best. As the saying goes 280 00:16:20,480 --> 00:16:23,160 Speaker 1: pay paint arts, you get monkeys. You want to make 281 00:16:23,200 --> 00:16:26,680 Speaker 1: sure that you're paying a reasonable and fair value fee, 282 00:16:26,880 --> 00:16:29,360 Speaker 1: but you're also only paying for what you actually need 283 00:16:29,400 --> 00:16:34,760 Speaker 1: today and tomorrow. Now. Investment choice? Does your fund give 284 00:16:34,800 --> 00:16:37,920 Speaker 1: you more than just the generic you know five different 285 00:16:38,840 --> 00:16:42,680 Speaker 1: investment options? Balance growth, high growth, conservative cash? Can you 286 00:16:43,200 --> 00:16:47,360 Speaker 1: actually if you wanted to access through their investment menu 287 00:16:47,680 --> 00:16:53,880 Speaker 1: diversified options more ideas such as ETFs and ETFs from 288 00:16:53,880 --> 00:16:56,080 Speaker 1: a wide range of different fund managers. Might I add, 289 00:16:56,560 --> 00:16:59,160 Speaker 1: can you access my favorite investmentable and that is listed 290 00:16:59,160 --> 00:17:02,000 Speaker 1: investment companies? Can you access direct equity, say the top 291 00:17:02,080 --> 00:17:05,280 Speaker 1: two hundred AX or even international markets, can you access 292 00:17:05,359 --> 00:17:08,919 Speaker 1: term deposits. Whilst you may not necessarily need all of 293 00:17:08,960 --> 00:17:13,200 Speaker 1: these investment options right now today, I guarantee as your 294 00:17:13,280 --> 00:17:18,360 Speaker 1: investing experience evolves over time, you may realize sooner than 295 00:17:18,640 --> 00:17:22,639 Speaker 1: you think that you actually want a more sophisticated investment menu. 296 00:17:23,280 --> 00:17:25,480 Speaker 1: So look at your needs today, but also take into 297 00:17:25,480 --> 00:17:29,040 Speaker 1: consideration the long term direction and tools and options that 298 00:17:29,080 --> 00:17:31,919 Speaker 1: you may want close at hand, because it's going to 299 00:17:31,920 --> 00:17:37,399 Speaker 1: be expensive changing superhneration account providers again, just like it 300 00:17:37,480 --> 00:17:40,000 Speaker 1: is when it's changing your investment option, You're going to 301 00:17:40,080 --> 00:17:43,480 Speaker 1: trigger tax, You're going to trigger fees. The other question 302 00:17:43,480 --> 00:17:45,800 Speaker 1: I would ask myself in looking at the overall superhneration 303 00:17:45,840 --> 00:17:50,240 Speaker 1: account is do they provide insurance personal insurance like life cover, 304 00:17:50,760 --> 00:17:55,159 Speaker 1: income protection to age sixty five TPD cover and is 305 00:17:55,160 --> 00:17:58,199 Speaker 1: that appropriate for you and your situation? And then the 306 00:17:58,240 --> 00:18:01,680 Speaker 1: big one, which is a really important one I think 307 00:18:01,760 --> 00:18:04,639 Speaker 1: and for me it's personally and non negotiable, and that 308 00:18:04,720 --> 00:18:08,159 Speaker 1: comes down to the retirement features. Does your superannuation account 309 00:18:08,160 --> 00:18:12,240 Speaker 1: provider offer in specie transfers into a pension account when 310 00:18:12,240 --> 00:18:15,800 Speaker 1: you retire so that you can keep your investments as 311 00:18:15,840 --> 00:18:19,080 Speaker 1: they are without triggering capital gains tax when you shift 312 00:18:19,160 --> 00:18:22,000 Speaker 1: them into a pension account. Now, if your ears are 313 00:18:22,000 --> 00:18:23,800 Speaker 1: pricking up right now and you're like, whoa, whoa wa, 314 00:18:23,920 --> 00:18:25,920 Speaker 1: hang on, Canna, what are you talking about here? Back 315 00:18:25,960 --> 00:18:28,320 Speaker 1: it up. I'm going to link in the podcast notes 316 00:18:28,359 --> 00:18:30,639 Speaker 1: a couple of really important episodes where I explain in 317 00:18:30,680 --> 00:18:33,600 Speaker 1: detail what this in specie transfer service is, because it 318 00:18:33,640 --> 00:18:35,840 Speaker 1: could save you tens of thousand dollars of tax, if 319 00:18:35,840 --> 00:18:38,439 Speaker 1: not hundreds of thousands of dollars of tax when you 320 00:18:38,440 --> 00:18:40,879 Speaker 1: go to retire, particularly if you are like me and 321 00:18:40,960 --> 00:18:43,520 Speaker 1: you have a long term buy and hold strategy where 322 00:18:43,520 --> 00:18:48,399 Speaker 1: you never like crystallizing capital gains tax. Now, these questions 323 00:18:48,680 --> 00:18:51,399 Speaker 1: when it comes to picking the superannuation account provider are 324 00:18:51,440 --> 00:18:53,879 Speaker 1: often overlooked, but it can make a massive difference in 325 00:18:53,920 --> 00:18:57,200 Speaker 1: your long term outcomes, particularly that in specie transfer service. 326 00:18:57,880 --> 00:19:00,680 Speaker 1: So if your superannuation fund doesn't tee all of these 327 00:19:00,680 --> 00:19:03,800 Speaker 1: boxes you like, it might be time to not just 328 00:19:03,880 --> 00:19:06,200 Speaker 1: change the underlying investments, but maybe look at changing the 329 00:19:06,280 --> 00:19:09,560 Speaker 1: actual superannuation account. But if you get stuck, go and 330 00:19:09,640 --> 00:19:12,720 Speaker 1: speak to a financial platner and get personal advice, and 331 00:19:12,840 --> 00:19:15,080 Speaker 1: you know, as I said, just like changing investments in 332 00:19:15,119 --> 00:19:20,240 Speaker 1: your super changing your actual investment accounts, your superannuation investment accounts. 333 00:19:20,240 --> 00:19:23,280 Speaker 1: It triggers tax. So if you're going to make a change, 334 00:19:23,640 --> 00:19:25,919 Speaker 1: make the change for the long run so that you 335 00:19:25,920 --> 00:19:30,840 Speaker 1: can limit these expenses eroding your superannuation balance. You know, 336 00:19:30,920 --> 00:19:33,840 Speaker 1: we don't want to be churning the portfolios, you know, 337 00:19:33,920 --> 00:19:37,520 Speaker 1: constant changes. It's got to be avoided at all costs. 338 00:19:38,200 --> 00:19:40,760 Speaker 1: The best decision you make is for the long run 339 00:19:40,880 --> 00:19:43,120 Speaker 1: and for your long term goals, So make sure you're 340 00:19:43,119 --> 00:19:45,760 Speaker 1: going to stick to it. So please make sure go 341 00:19:46,200 --> 00:19:48,639 Speaker 1: and listen to these episodes that I will link for 342 00:19:48,640 --> 00:19:52,160 Speaker 1: you because they are essential listenings. Now step number four, 343 00:19:52,600 --> 00:19:59,679 Speaker 1: the contributions matter to all right, changing your superannuation investment 344 00:19:59,680 --> 00:20:02,880 Speaker 1: option can make a big difference. Yes, great, but don't 345 00:20:02,880 --> 00:20:06,880 Speaker 1: forget it's your superannuation contributions that really fuel that long 346 00:20:07,000 --> 00:20:09,960 Speaker 1: term growth, even actually the short term growth. You've got 347 00:20:09,960 --> 00:20:12,520 Speaker 1: your employer contributions, which obviously at the moment have now 348 00:20:12,560 --> 00:20:15,959 Speaker 1: gone up to twelve percent, which is great. And the 349 00:20:16,040 --> 00:20:18,200 Speaker 1: reality though is that's twelve percent for a lot of 350 00:20:18,240 --> 00:20:19,960 Speaker 1: people isn't actually going to be enough for what they 351 00:20:20,040 --> 00:20:23,080 Speaker 1: really want to achieve financially. Then, of course you've got 352 00:20:23,080 --> 00:20:25,920 Speaker 1: your voluntary contributions, which are after tax money, and that 353 00:20:25,960 --> 00:20:28,200 Speaker 1: could be something really simple like setting up a regular 354 00:20:28,640 --> 00:20:31,359 Speaker 1: contribution plan with your after tax dollars, like twenty dollars 355 00:20:31,400 --> 00:20:33,680 Speaker 1: per week, fifty dollars per week, and that can really 356 00:20:33,720 --> 00:20:39,280 Speaker 1: help supercharge your superannuation portfolio, with compounding obviously working for you. 357 00:20:40,080 --> 00:20:42,480 Speaker 1: And of course you've got to remember money you put 358 00:20:42,520 --> 00:20:45,640 Speaker 1: into Super you cannot get out until you meet preservation age, 359 00:20:45,640 --> 00:20:46,960 Speaker 1: which for most of us is going to be in 360 00:20:46,960 --> 00:20:51,280 Speaker 1: our mid to late sixties. So obviously, only contribute what 361 00:20:51,520 --> 00:20:55,239 Speaker 1: you can afford to because it's locked away, and of 362 00:20:55,280 --> 00:20:57,440 Speaker 1: course be aware of the annual limits, which are per 363 00:20:57,520 --> 00:21:01,600 Speaker 1: financial year, not calendar year, so you don't get caught out. Now, 364 00:21:01,960 --> 00:21:03,960 Speaker 1: the other way of putting more money into super, which 365 00:21:04,000 --> 00:21:06,840 Speaker 1: I think is brilliant, particularly for young people, and I'm 366 00:21:06,840 --> 00:21:09,159 Speaker 1: assuming you're young, and that is to look at what 367 00:21:09,160 --> 00:21:13,760 Speaker 1: we call concessional contributions before tax salary sacrificing because these 368 00:21:13,760 --> 00:21:15,920 Speaker 1: are just taxed at you know, fifteen percent as they 369 00:21:15,960 --> 00:21:18,320 Speaker 1: go in and which for a lot of people that's 370 00:21:18,520 --> 00:21:21,920 Speaker 1: lower than their marginal tax rate. And again there are 371 00:21:22,720 --> 00:21:25,359 Speaker 1: annual caps. You can't just go and sackle that you 372 00:21:25,400 --> 00:21:28,560 Speaker 1: sacrifice all of your income. And there are also little 373 00:21:28,640 --> 00:21:30,840 Speaker 1: catches as well, which I'm not going to talk about today, 374 00:21:30,840 --> 00:21:34,360 Speaker 1: called carry forward contributions. But this is a really popular 375 00:21:34,400 --> 00:21:38,240 Speaker 1: way to boost your super and it's something that saves 376 00:21:38,359 --> 00:21:40,720 Speaker 1: you on income tax as well as well into the 377 00:21:40,760 --> 00:21:43,480 Speaker 1: long run. And a lot of people really like that 378 00:21:43,520 --> 00:21:45,800 Speaker 1: the money is locked up because it's away from temptation. 379 00:21:46,920 --> 00:21:50,560 Speaker 1: So keep that in mind. It's not just about fixing 380 00:21:50,560 --> 00:21:53,520 Speaker 1: the underlying investments, is also about what you're putting into 381 00:21:53,560 --> 00:21:59,520 Speaker 1: your super now step number five that is reviewing your super. 382 00:22:00,320 --> 00:22:02,040 Speaker 1: I love that you've started to look at your super, 383 00:22:02,040 --> 00:22:04,639 Speaker 1: but let's make sure we create a habit. Super is 384 00:22:04,680 --> 00:22:07,040 Speaker 1: not set and forget it's you know, just like your 385 00:22:07,080 --> 00:22:09,639 Speaker 1: budget or you're investing out a super, you've got to 386 00:22:09,680 --> 00:22:12,080 Speaker 1: review it on a regular basis, at least twice a year. 387 00:22:12,480 --> 00:22:14,879 Speaker 1: Ask yourself, you know, what are my goals? You know? 388 00:22:15,080 --> 00:22:17,520 Speaker 1: Has my risk profile changed? Perhaps you go from a 389 00:22:17,560 --> 00:22:19,720 Speaker 1: growth to a high growth. You know, as you're learning more, 390 00:22:20,240 --> 00:22:22,760 Speaker 1: are my fees still competitive that they crept up? Are 391 00:22:22,760 --> 00:22:25,160 Speaker 1: am I paying for things I don't actually need any more? 392 00:22:26,000 --> 00:22:28,440 Speaker 1: It has my superbrand and as my sorry, my employer 393 00:22:28,840 --> 00:22:31,800 Speaker 1: been contributing to my super correctly and the right amounts 394 00:22:31,840 --> 00:22:35,000 Speaker 1: and on time. And do I still have the right 395 00:22:35,080 --> 00:22:37,080 Speaker 1: level of insurance in my super? Maybe I need to 396 00:22:37,080 --> 00:22:40,080 Speaker 1: increase it, perhaps I can even decrease it. You know, 397 00:22:40,119 --> 00:22:42,399 Speaker 1: this is really important that you you know when your 398 00:22:42,440 --> 00:22:45,600 Speaker 1: superinnuation statement arrives in the mail or in your inbox, 399 00:22:46,119 --> 00:22:50,479 Speaker 1: don't just delete it, Open it and spend ten minutes 400 00:22:50,800 --> 00:22:54,680 Speaker 1: reading through it. You know it's a health check. Now 401 00:22:55,000 --> 00:23:00,159 Speaker 1: step number six when to go and seek advice. This 402 00:23:00,280 --> 00:23:01,800 Speaker 1: is the part where I want to be really clear. 403 00:23:02,080 --> 00:23:05,359 Speaker 1: Your super is one of the biggest financial assets you 404 00:23:05,400 --> 00:23:10,320 Speaker 1: will ever own. Making mistakes with your super, or even 405 00:23:10,520 --> 00:23:15,280 Speaker 1: not even bothering to get involved or included with your super, 406 00:23:15,400 --> 00:23:19,359 Speaker 1: can cost you thousands, tens of thousands, even hundreds of 407 00:23:19,400 --> 00:23:24,560 Speaker 1: thousands over decades. So if you are unsure, or if 408 00:23:24,640 --> 00:23:29,200 Speaker 1: your balance is growing over time, it is most definitely 409 00:23:29,240 --> 00:23:33,639 Speaker 1: worth speaking to a licensed financial planner. They can show 410 00:23:33,680 --> 00:23:37,280 Speaker 1: you so many different things. They can model different strategies, 411 00:23:37,320 --> 00:23:39,400 Speaker 1: they can show you how they compare over the long 412 00:23:39,480 --> 00:23:44,160 Speaker 1: run different contributions. They can also talk about other financial 413 00:23:44,200 --> 00:23:48,760 Speaker 1: strategies beyond superannuation, like debt recycling. You know saving up 414 00:23:48,800 --> 00:23:54,240 Speaker 1: for a home, investing outside of super, your lifestyle goals, budgeting. Yes, 415 00:23:54,920 --> 00:23:56,919 Speaker 1: getting a financial plan is going to cost money, but 416 00:23:57,480 --> 00:24:00,960 Speaker 1: the value that that financial planner can give you in 417 00:24:01,040 --> 00:24:05,160 Speaker 1: their strategic advice alone forgetting about what to invest in 418 00:24:06,160 --> 00:24:10,919 Speaker 1: should exceed the cost of that financial plan on a 419 00:24:11,080 --> 00:24:17,439 Speaker 1: multiplier multiplier level. All right, So, to this listener, should 420 00:24:17,440 --> 00:24:19,320 Speaker 1: he go and just switch to growth or high growth 421 00:24:19,400 --> 00:24:24,960 Speaker 1: and balance? The answer is not without doing the groundwork. First, 422 00:24:25,560 --> 00:24:28,359 Speaker 1: do a risk profile, know what your risk profile tolerance 423 00:24:28,480 --> 00:24:31,959 Speaker 1: really is. Check if your super fund is competitive it 424 00:24:32,000 --> 00:24:35,760 Speaker 1: offers the right features for you, including the right investment options, 425 00:24:36,359 --> 00:24:39,840 Speaker 1: and think about how much you could maybe start contributing 426 00:24:39,920 --> 00:24:43,480 Speaker 1: so that your superannuation balance grows over time and is 427 00:24:43,520 --> 00:24:46,840 Speaker 1: in an alignment to your goals. And of course review it. 428 00:24:46,880 --> 00:24:50,679 Speaker 1: Review it regularly, and always be open to seeking professional 429 00:24:50,680 --> 00:24:54,920 Speaker 1: advice from a licensed financial planner, and most importantly, celebrate. 430 00:24:55,160 --> 00:24:57,920 Speaker 1: Celebrate the fact that you've taken this step. Most people 431 00:24:57,960 --> 00:25:00,960 Speaker 1: ignore their super until it is way too late, But 432 00:25:01,359 --> 00:25:05,359 Speaker 1: you're asking the right questions right now, which means you've 433 00:25:05,400 --> 00:25:10,160 Speaker 1: already given yourself a massive head start. All right now, 434 00:25:10,240 --> 00:25:13,200 Speaker 1: For everyone who enjoyed this listening, to this episode. Can 435 00:25:13,240 --> 00:25:15,320 Speaker 1: you please do me a huge favor and go and 436 00:25:15,359 --> 00:25:17,680 Speaker 1: share it with a friend or share it on your 437 00:25:17,720 --> 00:25:21,200 Speaker 1: socials anyone that is wondering how do I make sure 438 00:25:21,200 --> 00:25:23,359 Speaker 1: that I can retire? I can retire on time and 439 00:25:23,400 --> 00:25:25,720 Speaker 1: I can retire on my own terms? How do I 440 00:25:25,720 --> 00:25:29,119 Speaker 1: get my superannuation money? Working as hard for as possible 441 00:25:29,480 --> 00:25:32,159 Speaker 1: for me and the maintime. If you would like me 442 00:25:32,240 --> 00:25:35,720 Speaker 1: to answer any of your money questions in the future 443 00:25:35,720 --> 00:25:38,000 Speaker 1: episode of Start Here, please make sure you send me 444 00:25:38,040 --> 00:25:41,320 Speaker 1: a DM on Instagram at sugar a TV or my 445 00:25:41,400 --> 00:25:45,159 Speaker 1: lifestyle account Canna Campbell Official. All Right, I will connect 446 00:25:45,160 --> 00:25:49,320 Speaker 1: with you next Monday on Sugar Mamma's Firepay And in 447 00:25:49,359 --> 00:25:51,680 Speaker 1: the meantime, thank you so much for listening to today's 448 00:25:51,720 --> 00:26:05,280 Speaker 1: episode on Start Here. S