1 00:00:02,200 --> 00:00:04,559 Speaker 1: From the news room and used to come to me. 2 00:00:06,400 --> 00:00:08,520 Speaker 2: Gooday there, I'm Andrew Bucklow. Hey, do you know what 3 00:00:08,600 --> 00:00:12,320 Speaker 2: this sound is? That is me ripping up the How 4 00:00:12,360 --> 00:00:14,840 Speaker 2: to Be Wealthy playbook? And why am I ripping it up? 5 00:00:14,880 --> 00:00:18,119 Speaker 2: Because it's out of date? Okay, times have changed. For 6 00:00:18,239 --> 00:00:21,080 Speaker 2: our parents. The formula was pretty simple, right by a house, 7 00:00:21,120 --> 00:00:23,720 Speaker 2: pay it off and coast into retirement with a healthier 8 00:00:23,720 --> 00:00:25,880 Speaker 2: man of suba. But I'm afraid that's not gonna work 9 00:00:25,880 --> 00:00:28,159 Speaker 2: for us younger Ozzi's. There is a new playbook we 10 00:00:28,240 --> 00:00:30,280 Speaker 2: have to follow to build wealth, and we're gonna share 11 00:00:30,320 --> 00:00:37,280 Speaker 2: it with you in this episode. I was born of 12 00:00:37,360 --> 00:00:40,400 Speaker 2: flex dum saw on my neck, Alec born and Jack's 13 00:00:40,400 --> 00:00:41,600 Speaker 2: Alec morna sex. 14 00:00:41,600 --> 00:00:45,640 Speaker 3: For nothing in this world Alec Moran, Jack, I really 15 00:00:45,640 --> 00:00:46,159 Speaker 3: want to see you. 16 00:00:47,680 --> 00:00:49,319 Speaker 2: Well, if you're like Cardi b and all you want 17 00:00:49,320 --> 00:00:51,239 Speaker 2: to see is money, you're gonna love News dot Com 18 00:00:51,280 --> 00:00:54,280 Speaker 2: dot use Cashed Up series, which is dedicated to helping 19 00:00:54,320 --> 00:00:57,560 Speaker 2: young ozzies kickstart their journey to financial freedom. Now you're 20 00:00:57,600 --> 00:00:59,640 Speaker 2: about to hear part one of that series, a chat 21 00:00:59,680 --> 00:01:03,600 Speaker 2: between our reporter Mary Madigan and finance expert Ben Nash, 22 00:01:03,640 --> 00:01:09,559 Speaker 2: who was the founder of pivot wealth. Take it away, Tam. 23 00:01:09,600 --> 00:01:12,240 Speaker 1: I think like the big question young people are asking 24 00:01:12,480 --> 00:01:15,800 Speaker 1: is what financial moves worked for boomers that aren't going 25 00:01:15,880 --> 00:01:16,600 Speaker 1: to work for gen Z. 26 00:01:17,440 --> 00:01:19,039 Speaker 4: Well, look, I think there's a few of them, but 27 00:01:19,080 --> 00:01:23,040 Speaker 4: the world has definitely changed and finance has changed as well. 28 00:01:23,080 --> 00:01:25,880 Speaker 4: I think if you look at particularly property, it's a 29 00:01:25,880 --> 00:01:28,520 Speaker 4: big pain point for younger people. It's also an area 30 00:01:28,560 --> 00:01:31,479 Speaker 4: where a lot of boomers made quite a lot of money. 31 00:01:31,600 --> 00:01:35,160 Speaker 4: And if you go back to like the eighties, property 32 00:01:35,160 --> 00:01:38,600 Speaker 4: prices were about two to four times the average income. Today, 33 00:01:38,640 --> 00:01:40,880 Speaker 4: depending on where you live, you're looking at sort of 34 00:01:41,000 --> 00:01:43,600 Speaker 4: ten x income, which makes it a lot harder to 35 00:01:43,640 --> 00:01:46,080 Speaker 4: get into the property market. And so that means a 36 00:01:46,120 --> 00:01:48,800 Speaker 4: couple of things for younger people. They really need to 37 00:01:49,160 --> 00:01:52,520 Speaker 4: plan smart around this and understand the rules and how 38 00:01:52,520 --> 00:01:54,800 Speaker 4: to use them to their advantage. You know, for a boomer, 39 00:01:54,840 --> 00:01:56,840 Speaker 4: they could just go and buy their own home, pay 40 00:01:56,880 --> 00:01:59,880 Speaker 4: off that mortgage, then ride the property growth and make 41 00:02:00,000 --> 00:02:02,440 Speaker 4: a whole bunch of money. But for younger people, because 42 00:02:02,480 --> 00:02:05,040 Speaker 4: the mortgages are so much bigger, you know, looking at 43 00:02:05,080 --> 00:02:07,240 Speaker 4: how you're structuring that property purchase, do you buy your 44 00:02:07,240 --> 00:02:09,639 Speaker 4: own home first? Do you do rent vesting, which is 45 00:02:09,720 --> 00:02:12,200 Speaker 4: something that we've seen a lot of increasing popularity for. 46 00:02:12,480 --> 00:02:15,400 Speaker 4: So getting that right makes a huge difference in someone's 47 00:02:15,400 --> 00:02:19,320 Speaker 4: financial position, their ability to actually invest. I think the 48 00:02:19,360 --> 00:02:21,320 Speaker 4: other thing is that they need to have a focus 49 00:02:21,320 --> 00:02:24,400 Speaker 4: on building investments outside of your home as well. Because 50 00:02:24,560 --> 00:02:27,280 Speaker 4: for a lot of the Boomers generation, the super funds 51 00:02:27,320 --> 00:02:29,560 Speaker 4: were quite lucrative. There was a lot of these government 52 00:02:29,639 --> 00:02:32,080 Speaker 4: schemes that give you like a guaranteed pension or a 53 00:02:32,120 --> 00:02:35,160 Speaker 4: guaranteed amount, whereas we don't have that today, and that 54 00:02:35,240 --> 00:02:37,280 Speaker 4: with the rising cost of living, means that you need 55 00:02:37,320 --> 00:02:39,560 Speaker 4: to have a nest egg sort of outside of your home, 56 00:02:39,600 --> 00:02:42,880 Speaker 4: which is something that can replace your salary with investment 57 00:02:42,880 --> 00:02:45,840 Speaker 4: income over time and actually give you that financial freedom. 58 00:02:46,040 --> 00:02:47,840 Speaker 1: So if you're talking to someone like me right that 59 00:02:47,880 --> 00:02:50,880 Speaker 1: lives in Sydney, which is like the medium apartment price 60 00:02:50,919 --> 00:02:53,560 Speaker 1: now is I think over a million dollars, Yeah, and 61 00:02:53,639 --> 00:02:57,040 Speaker 1: I'm on like an average wage, say, which I think 62 00:02:57,240 --> 00:03:00,079 Speaker 1: for gen Z it's about fifty five thousand, and I 63 00:03:00,080 --> 00:03:01,760 Speaker 1: think if you jump up to my nails, it's anywhere 64 00:03:01,760 --> 00:03:04,760 Speaker 1: between about eighty five thousand to one hundred thousand. And 65 00:03:04,800 --> 00:03:05,959 Speaker 1: I sat in front of you and said look I 66 00:03:06,000 --> 00:03:07,920 Speaker 1: want to amass. Well, what would you say. 67 00:03:08,600 --> 00:03:11,440 Speaker 4: Well, there's a couple of things there. Firstly, it's not easy, 68 00:03:11,480 --> 00:03:13,520 Speaker 4: so don't beat yourself up too much if you're not, 69 00:03:13,680 --> 00:03:16,360 Speaker 4: you know, crush it, crushing it with your I forgive 70 00:03:16,440 --> 00:03:19,840 Speaker 4: myself yeah at the start. But I think controlling your 71 00:03:19,880 --> 00:03:22,280 Speaker 4: costs is a powerful one. It's not a very fun thing. 72 00:03:22,680 --> 00:03:24,320 Speaker 1: So when you say controlling your costs, you mean like 73 00:03:24,360 --> 00:03:26,480 Speaker 1: stop ordering from the iconic one day delivery. 74 00:03:27,200 --> 00:03:31,600 Speaker 4: Perhaps I prevent one of them. Yes, I suppose for everyone, though, 75 00:03:31,600 --> 00:03:34,079 Speaker 4: it's a little bit different. What's most important to them 76 00:03:34,080 --> 00:03:35,880 Speaker 4: and so when we work through it with clients. So 77 00:03:35,880 --> 00:03:38,520 Speaker 4: I don't think it's right to say that something is 78 00:03:38,640 --> 00:03:41,480 Speaker 4: bad or you know, Uber eats is good or not 79 00:03:41,560 --> 00:03:44,600 Speaker 4: good or whatever. It's If something is the most important 80 00:03:44,600 --> 00:03:46,680 Speaker 4: thing to you, then sure prioritize it. But I think 81 00:03:46,720 --> 00:03:48,880 Speaker 4: a lot of people they end up just spending money 82 00:03:49,200 --> 00:03:51,240 Speaker 4: on stuff because it's so easy to spend and the 83 00:03:51,280 --> 00:03:53,480 Speaker 4: apps and you know, you look at your Facebook feed 84 00:03:53,520 --> 00:03:55,760 Speaker 4: and you want something, and you know all of these things, 85 00:03:55,800 --> 00:03:57,720 Speaker 4: and then all of a sudden you're not saving enough 86 00:03:57,800 --> 00:04:00,720 Speaker 4: or you're not saving anything at all. And so there's 87 00:04:00,720 --> 00:04:03,040 Speaker 4: a bit in discretionary spending, which is where a lot 88 00:04:03,080 --> 00:04:05,920 Speaker 4: of people fall short. Also, controlling the bigger costs like 89 00:04:06,000 --> 00:04:09,360 Speaker 4: housing is another one. But you know property, it's expensive. 90 00:04:09,400 --> 00:04:12,480 Speaker 4: Rents are expensive, So whatever you can do to keep 91 00:04:12,480 --> 00:04:14,440 Speaker 4: that as low as possible to allow you to build 92 00:04:14,480 --> 00:04:17,280 Speaker 4: your initial savings and your initial investments and ideally get 93 00:04:17,320 --> 00:04:20,360 Speaker 4: yourself into the property market. Generally, that makes you know 94 00:04:20,440 --> 00:04:24,039 Speaker 4: what comes next easier as well. Also, looking at how 95 00:04:24,080 --> 00:04:26,800 Speaker 4: you can increase your income is another thing that, like 96 00:04:26,839 --> 00:04:30,600 Speaker 4: I said, spending less money is less fun and hard, 97 00:04:30,640 --> 00:04:32,200 Speaker 4: and there is a limit. There's a flaw right that 98 00:04:32,240 --> 00:04:34,359 Speaker 4: you need to spend a certain amount of money to 99 00:04:34,400 --> 00:04:36,360 Speaker 4: put a roof over your head and to feed yourself 100 00:04:36,400 --> 00:04:39,680 Speaker 4: to live a reasonable lifestyle. But there is no limit 101 00:04:39,680 --> 00:04:43,359 Speaker 4: to how much you can increase your income. You can upskill, reskill, 102 00:04:43,520 --> 00:04:47,360 Speaker 4: change jobs, change industries, start a side hustle. Technology is 103 00:04:47,400 --> 00:04:50,360 Speaker 4: making it easier than ever before to earn a little 104 00:04:50,360 --> 00:04:52,080 Speaker 4: bit of extra money, and that little bit of extra 105 00:04:52,120 --> 00:04:54,919 Speaker 4: money can make the difference between you breaking even or 106 00:04:54,920 --> 00:04:58,080 Speaker 4: falling a little bit behind and actually getting ahead. 107 00:04:58,160 --> 00:04:59,680 Speaker 1: And if you were talking to say like agen Z, 108 00:04:59,800 --> 00:05:02,520 Speaker 1: who between fifty five thousand and sixty thousand, a year, 109 00:05:02,960 --> 00:05:04,920 Speaker 1: and they said, look, what's something small I can do? Like, 110 00:05:04,960 --> 00:05:07,240 Speaker 1: I'm obviously not rate to invest in the property market 111 00:05:07,320 --> 00:05:09,360 Speaker 1: right now. Perhaps I'm living in my mum and dad, 112 00:05:09,640 --> 00:05:11,200 Speaker 1: got a couple hundred bucks in my hand a week. 113 00:05:11,440 --> 00:05:13,360 Speaker 1: Would you say, would it be stocks or shares? 114 00:05:13,400 --> 00:05:13,479 Speaker 2: Like? 115 00:05:13,560 --> 00:05:14,920 Speaker 1: Is that where you get your foot in the door. 116 00:05:15,320 --> 00:05:17,479 Speaker 4: Yeah, Well, generally there's a few different things that you 117 00:05:17,520 --> 00:05:19,120 Speaker 4: can do to grow your money. 118 00:05:19,160 --> 00:05:21,160 Speaker 3: You can save money in a bank account. 119 00:05:20,880 --> 00:05:23,400 Speaker 4: You can pay down debt if you've got debt, and 120 00:05:23,440 --> 00:05:26,840 Speaker 4: those are two sensible, good things to do that are 121 00:05:26,920 --> 00:05:28,640 Speaker 4: good ideas, but there are also two things that will 122 00:05:28,680 --> 00:05:30,760 Speaker 4: never get you actually wealthy, because money that you've got 123 00:05:30,800 --> 00:05:33,520 Speaker 4: sitting in a savings account is effectively going backwards after 124 00:05:33,560 --> 00:05:36,799 Speaker 4: your account for taxes and inflation, the rising cost of living, 125 00:05:37,080 --> 00:05:38,919 Speaker 4: and so if you want your money to grow, you 126 00:05:39,040 --> 00:05:42,240 Speaker 4: need to be investing into growth investments. And the three 127 00:05:42,440 --> 00:05:47,000 Speaker 4: main categories for those are shares, property, and superannuation, And 128 00:05:47,040 --> 00:05:50,600 Speaker 4: so under shares I would put all share type investments, ETFs, 129 00:05:50,640 --> 00:05:52,960 Speaker 4: managed funds, micro investing all in the same bucket because 130 00:05:52,960 --> 00:05:55,680 Speaker 4: they're essentially do the same thing. Then you've got property, 131 00:05:55,720 --> 00:05:57,960 Speaker 4: which as you mentioned, is good, but if you've got 132 00:05:58,000 --> 00:06:00,159 Speaker 4: a big ticket price tag to actually get in to 133 00:06:00,160 --> 00:06:03,960 Speaker 4: the market. There and then superannuation, So either investing into 134 00:06:03,960 --> 00:06:06,200 Speaker 4: a share portfolio or through your super fund. 135 00:06:06,720 --> 00:06:08,560 Speaker 3: Two things that you can do with a very small 136 00:06:08,640 --> 00:06:09,440 Speaker 3: amount of money. 137 00:06:09,520 --> 00:06:11,760 Speaker 1: Do you need, like, is it as simple as needing 138 00:06:11,760 --> 00:06:13,680 Speaker 1: like five hundred dollars? Because I think a lot of 139 00:06:13,720 --> 00:06:15,760 Speaker 1: people feel this big barrier to entry, Like when I 140 00:06:15,800 --> 00:06:17,920 Speaker 1: think of shares, I think I must need like two 141 00:06:17,960 --> 00:06:20,760 Speaker 1: hundred thousand dollars. But is it as simple as like 142 00:06:20,839 --> 00:06:23,000 Speaker 1: setting up three grand and going okay, I can start 143 00:06:23,000 --> 00:06:24,000 Speaker 1: to move around with this. 144 00:06:24,160 --> 00:06:25,720 Speaker 3: Or yeah, you don't even need that much. 145 00:06:25,880 --> 00:06:28,840 Speaker 4: So the technology these days makes it really easy for 146 00:06:28,960 --> 00:06:31,160 Speaker 4: you invest with very small amounts of money. So micro 147 00:06:31,240 --> 00:06:34,239 Speaker 4: investing apps which have become quite popular and with pretty 148 00:06:34,240 --> 00:06:36,480 Speaker 4: good reason. I think that most of them will allow 149 00:06:36,480 --> 00:06:38,760 Speaker 4: you to invest with as little as five dollars. Some 150 00:06:38,800 --> 00:06:41,080 Speaker 4: of them it's as little as one single cent. And 151 00:06:41,200 --> 00:06:43,280 Speaker 4: the great thing about those apps is that you can 152 00:06:43,320 --> 00:06:45,599 Speaker 4: just link them to your bank account and it will 153 00:06:45,640 --> 00:06:48,200 Speaker 4: just invest a small amount regularly over time. You can 154 00:06:48,200 --> 00:06:51,200 Speaker 4: set it up to daily or weekly or monthly or 155 00:06:51,200 --> 00:06:53,440 Speaker 4: whatever works for you. And you know, I think a 156 00:06:53,480 --> 00:06:56,640 Speaker 4: really great way to build momentum in your investments is 157 00:06:56,680 --> 00:06:59,120 Speaker 4: to start with a number that you feel pretty confident 158 00:06:59,160 --> 00:06:59,600 Speaker 4: that you can. 159 00:06:59,520 --> 00:07:02,000 Speaker 3: Afford, and then just look to increase that over time. 160 00:07:02,080 --> 00:07:04,120 Speaker 4: Maybe you start with like, everyone should be able to 161 00:07:04,120 --> 00:07:06,720 Speaker 4: start with five bucks, right, that's a coffee, so everyone 162 00:07:06,760 --> 00:07:08,840 Speaker 4: can do that. And I guarantee you if you're investing 163 00:07:08,880 --> 00:07:10,960 Speaker 4: five dollars a week, you're going to feel a lot 164 00:07:10,960 --> 00:07:13,040 Speaker 4: better than investing zero dollars a week. There's just a 165 00:07:13,080 --> 00:07:15,840 Speaker 4: mindset shift that comes with that. And so then you 166 00:07:15,880 --> 00:07:17,600 Speaker 4: can look to increase it to ten dollars a week 167 00:07:17,640 --> 00:07:18,440 Speaker 4: or twenty dollars a week. 168 00:07:18,520 --> 00:07:19,280 Speaker 3: Then you're to pay rise. 169 00:07:19,280 --> 00:07:21,000 Speaker 4: Maybe you can bump it up to fifty dollars a week, 170 00:07:21,200 --> 00:07:23,400 Speaker 4: and you're still having a little bit more money. 171 00:07:23,640 --> 00:07:25,880 Speaker 1: You know. Part of that getting also because I find 172 00:07:25,920 --> 00:07:28,320 Speaker 1: them quite intimidating, right, And I guess if you start 173 00:07:28,320 --> 00:07:30,160 Speaker 1: with five, you start being like, oh, it's not so scary. 174 00:07:30,200 --> 00:07:31,720 Speaker 1: I can work this out, because I think a lot 175 00:07:31,720 --> 00:07:34,200 Speaker 1: of people feel quote unquote like a bit too stupid 176 00:07:34,240 --> 00:07:36,120 Speaker 1: to understand it, so they go, oh, it's just not 177 00:07:36,200 --> 00:07:39,040 Speaker 1: for me, and then they just don't do anything. So 178 00:07:39,080 --> 00:07:41,160 Speaker 1: I guess that small amount makes it you kind of 179 00:07:41,280 --> 00:07:43,440 Speaker 1: learn and five dollars is okay to make a mistake 180 00:07:43,480 --> 00:07:44,440 Speaker 1: on five dollars. 181 00:07:44,240 --> 00:07:44,880 Speaker 3: Or like that's it. 182 00:07:45,000 --> 00:07:46,840 Speaker 4: And then you start, as you say, you start learning 183 00:07:46,880 --> 00:07:48,640 Speaker 4: a bit and you start paying a little bit of attention. 184 00:07:48,800 --> 00:07:49,440 Speaker 3: You see that. 185 00:07:49,720 --> 00:07:51,480 Speaker 4: I think one of the things that scares people is 186 00:07:51,480 --> 00:07:53,760 Speaker 4: that there's all this talk in the news. 187 00:07:53,560 --> 00:07:54,560 Speaker 3: About what's going on. 188 00:07:54,920 --> 00:07:58,720 Speaker 4: You know, markets sometimes are really positive, sometimes it's really negative. 189 00:07:58,760 --> 00:08:01,040 Speaker 4: People get a little bit scared often when you look 190 00:08:01,040 --> 00:08:04,160 Speaker 4: at what's actually going on with your investments, and you know, 191 00:08:04,200 --> 00:08:06,760 Speaker 4: you see headlines talking about the end of the big 192 00:08:06,880 --> 00:08:10,200 Speaker 4: crash and then you've lost fifteen cents in your investment account, 193 00:08:10,240 --> 00:08:12,280 Speaker 4: Like you realize that it's not as big a deal 194 00:08:12,560 --> 00:08:13,640 Speaker 4: to you as. 195 00:08:13,480 --> 00:08:16,360 Speaker 3: It sometimes might feel like just by reading the news. 196 00:08:16,680 --> 00:08:17,480 Speaker 3: And so that's a. 197 00:08:17,440 --> 00:08:18,640 Speaker 1: Direct cab our headlines. 198 00:08:19,320 --> 00:08:20,000 Speaker 3: Well, I think. 199 00:08:19,920 --> 00:08:22,160 Speaker 4: People want to people want to hear it, People want 200 00:08:22,160 --> 00:08:25,080 Speaker 4: to know about the risks that are there. But look, 201 00:08:25,120 --> 00:08:27,440 Speaker 4: it is a little It can lead people to get 202 00:08:27,480 --> 00:08:29,240 Speaker 4: so scared that they end up doing nothing and then 203 00:08:29,240 --> 00:08:31,480 Speaker 4: they're just sitting on the sidelines, missing out on the 204 00:08:31,720 --> 00:08:33,280 Speaker 4: all of the opportunity. 205 00:08:32,760 --> 00:08:35,839 Speaker 2: That's stick around. In just a moment, Ben Nash will 206 00:08:35,880 --> 00:08:39,160 Speaker 2: share some tips about superannuation and gives his opinion on 207 00:08:39,280 --> 00:08:54,880 Speaker 2: rent investing. Welcome back. You're listening to a chat between 208 00:08:54,920 --> 00:08:57,400 Speaker 2: Mary Madigan and Ben Nash for news dot com Dot 209 00:08:57,440 --> 00:08:58,720 Speaker 2: to Use casht Up series. 210 00:09:01,679 --> 00:09:03,600 Speaker 1: What are the top mistakes you see young people make 211 00:09:03,640 --> 00:09:04,479 Speaker 1: with superannuation? 212 00:09:05,360 --> 00:09:09,200 Speaker 4: Well, I think it's not paying very much attention at all, 213 00:09:09,240 --> 00:09:11,040 Speaker 4: And I don't think your super needs a lot of 214 00:09:11,120 --> 00:09:13,280 Speaker 4: your attention when you're younger and you've got a long 215 00:09:13,280 --> 00:09:14,199 Speaker 4: time to retirement. 216 00:09:14,200 --> 00:09:16,560 Speaker 3: But a little bit really does go a long way. 217 00:09:16,600 --> 00:09:20,240 Speaker 4: And so just as simple as actually reading your statement 218 00:09:20,280 --> 00:09:20,880 Speaker 4: and looking. 219 00:09:20,720 --> 00:09:21,560 Speaker 1: At oh that's a lot. 220 00:09:21,679 --> 00:09:26,920 Speaker 3: What'ted into? How is it performing? You know, how does 221 00:09:26,960 --> 00:09:29,240 Speaker 3: it perform relatives to other investments? Bad? 222 00:09:29,320 --> 00:09:29,520 Speaker 2: Is it? 223 00:09:29,559 --> 00:09:31,760 Speaker 1: On a scale them one to ten? Obviously not talking 224 00:09:31,760 --> 00:09:34,000 Speaker 1: about myself at all. If you have like one or 225 00:09:34,040 --> 00:09:37,439 Speaker 1: two superannuation accounts and you've no a bothered to combine them, 226 00:09:37,440 --> 00:09:39,160 Speaker 1: how much is that ruining your life? 227 00:09:39,559 --> 00:09:41,760 Speaker 4: Well, look, it depends on what funds you've got and 228 00:09:41,800 --> 00:09:42,960 Speaker 4: what's happening in the funds. 229 00:09:42,960 --> 00:09:47,120 Speaker 1: But hypothetically, if you had like twenty thousand from when 230 00:09:47,160 --> 00:09:49,960 Speaker 1: you worked in hospitality and then it just like sits there, 231 00:09:50,360 --> 00:09:52,599 Speaker 1: and then you have like you've maybe you've become a journalist, 232 00:09:53,000 --> 00:09:55,520 Speaker 1: and then you have that fund, like and I just 233 00:09:55,559 --> 00:09:57,040 Speaker 1: every now and then I'm like, oh, I should do something, 234 00:09:57,040 --> 00:09:58,840 Speaker 1: and then not me, obviously someone else. 235 00:10:00,280 --> 00:10:03,280 Speaker 4: That Well, it means that you are essentially doubling up 236 00:10:03,280 --> 00:10:05,840 Speaker 4: on fees, and you may also be doubling up on 237 00:10:05,960 --> 00:10:09,200 Speaker 4: insurance covers as well, because most funds have a default 238 00:10:09,280 --> 00:10:12,280 Speaker 4: level of insurance. But most of those insurance policies and 239 00:10:12,320 --> 00:10:15,000 Speaker 4: I think insurance is important, but most of those policies 240 00:10:15,000 --> 00:10:16,800 Speaker 4: in the super funds they have like a what's called 241 00:10:16,840 --> 00:10:19,080 Speaker 4: an offset clause, which means that you can't claim on 242 00:10:19,120 --> 00:10:21,800 Speaker 4: two policies at once. And so if you're paying for two, 243 00:10:22,160 --> 00:10:24,280 Speaker 4: it's not like you would if something happens that you 244 00:10:24,320 --> 00:10:27,959 Speaker 4: would actually get double get double No, unfortunately, and so 245 00:10:28,240 --> 00:10:30,120 Speaker 4: people don't realize that they might be paying this extra 246 00:10:30,160 --> 00:10:34,040 Speaker 4: money for really no benefit to them. So it's generally worth, 247 00:10:34,120 --> 00:10:36,800 Speaker 4: you know, looking at what fund you want to be in. 248 00:10:37,240 --> 00:10:40,000 Speaker 4: For me, I think starting with the investments that you 249 00:10:40,040 --> 00:10:42,880 Speaker 4: want to choose, what investment option do you want to 250 00:10:42,920 --> 00:10:45,800 Speaker 4: have your super money invested into. I think that's a 251 00:10:45,840 --> 00:10:48,240 Speaker 4: better place to start than which super fund is, Right, 252 00:10:48,320 --> 00:10:50,120 Speaker 4: A lot of people go, well, should I be with, 253 00:10:50,200 --> 00:10:52,040 Speaker 4: you know, one of the big industry super funds or 254 00:10:52,160 --> 00:10:55,439 Speaker 4: one of these other funds. But it's sort of a 255 00:10:55,440 --> 00:10:57,599 Speaker 4: little bit backwards because you want to go, what's the 256 00:10:57,679 --> 00:10:59,840 Speaker 4: right investment for me? Do I want to invest in 257 00:10:59,880 --> 00:11:02,040 Speaker 4: like an index fund that tracks the market, Do I 258 00:11:02,040 --> 00:11:04,240 Speaker 4: want to invest in some ethical fund? Do I have 259 00:11:04,280 --> 00:11:06,839 Speaker 4: something else that's important? And then you say, well, what 260 00:11:06,920 --> 00:11:09,240 Speaker 4: super funds will allow me to access this? And then 261 00:11:09,280 --> 00:11:11,400 Speaker 4: you can sort of screen them on cost, because if 262 00:11:11,400 --> 00:11:15,120 Speaker 4: you're getting the same ultimate investment and one's cheaper than 263 00:11:15,160 --> 00:11:17,280 Speaker 4: the other, well probably doesn't make a lot of sense 264 00:11:17,280 --> 00:11:21,200 Speaker 4: to pay more for exactly the same thing as well. 265 00:11:21,240 --> 00:11:24,080 Speaker 1: And should you be making these extra payments people always 266 00:11:24,080 --> 00:11:24,360 Speaker 1: bang on. 267 00:11:24,360 --> 00:11:28,640 Speaker 4: About, Well, I think making extra contributions to superfirstly, can 268 00:11:28,640 --> 00:11:31,640 Speaker 4: be tax seductible if you do it through They're basically 269 00:11:31,640 --> 00:11:33,520 Speaker 4: two types of supercontributions you can make. 270 00:11:33,559 --> 00:11:34,679 Speaker 3: One is tax seductible. 271 00:11:34,800 --> 00:11:36,720 Speaker 4: There's a limit of thirty thousand dollars a year that 272 00:11:36,760 --> 00:11:38,600 Speaker 4: you can do, which for most people is like plenty. 273 00:11:38,920 --> 00:11:41,480 Speaker 4: You can do that through your work and get them 274 00:11:41,520 --> 00:11:43,960 Speaker 4: to do what's called salary sacrifice, where they just debit 275 00:11:44,000 --> 00:11:46,439 Speaker 4: the money straight out of your pay, which is helpful 276 00:11:46,440 --> 00:11:49,280 Speaker 4: in that they do it before the tax applies. And 277 00:11:49,320 --> 00:11:52,000 Speaker 4: so if you ask your work to salary sacrifice, you're 278 00:11:52,000 --> 00:11:54,120 Speaker 4: twenty dollars a month, your pay would only go down 279 00:11:54,160 --> 00:11:56,760 Speaker 4: by ten dollars a month or fifteen dollars a month 280 00:11:56,880 --> 00:11:58,679 Speaker 4: because they do it before tax. 281 00:11:58,520 --> 00:12:02,520 Speaker 1: Essentially, and then you get tax on the lower amount. 282 00:12:02,720 --> 00:12:06,480 Speaker 1: So say you say sale sacrifice twenty thousand into the superannuation, 283 00:12:06,520 --> 00:12:08,360 Speaker 1: which we be a lot, So you're on one hundred thousand, 284 00:12:08,400 --> 00:12:10,240 Speaker 1: your salary sacrize twenty when it comes to tax time, 285 00:12:10,280 --> 00:12:11,679 Speaker 1: are you only getting taxed on eighty. 286 00:12:11,520 --> 00:12:14,480 Speaker 4: Thousand, that's right, Yeah, So it directly reduces the amount 287 00:12:14,480 --> 00:12:17,120 Speaker 4: of what your accessible income is in the eyes of 288 00:12:17,120 --> 00:12:19,600 Speaker 4: the ATO. And so the higher income is, the higher 289 00:12:19,720 --> 00:12:22,000 Speaker 4: tax bracket is, the less it actually costs you to 290 00:12:22,040 --> 00:12:25,000 Speaker 4: get this extra money into your super fund. You do 291 00:12:25,080 --> 00:12:27,480 Speaker 4: need to balance it against the fact that when you're younger, 292 00:12:27,520 --> 00:12:30,040 Speaker 4: there is a long time until you'll be able to 293 00:12:30,040 --> 00:12:32,840 Speaker 4: access this money. And unfortunately, the government does tend to 294 00:12:32,880 --> 00:12:35,320 Speaker 4: tinker with the rules, which I think really impacts the 295 00:12:35,360 --> 00:12:38,480 Speaker 4: confidence that younger people have in superannuation, and with pretty 296 00:12:38,480 --> 00:12:40,560 Speaker 4: good reason. And you know, there's nothing to say that 297 00:12:40,559 --> 00:12:44,040 Speaker 4: they wouldn't change the rules again. And so I suggest 298 00:12:44,040 --> 00:12:46,920 Speaker 4: to all of our clients and the people that ask 299 00:12:47,000 --> 00:12:48,959 Speaker 4: questions about this stuff, is that you want SUPER to 300 00:12:49,000 --> 00:12:50,040 Speaker 4: be a backup strategy. 301 00:12:50,080 --> 00:12:52,400 Speaker 3: You don't want it to be your main strategy. 302 00:12:52,720 --> 00:12:55,319 Speaker 4: That being said, I think even making a small amount 303 00:12:55,360 --> 00:12:58,560 Speaker 4: of extra contributions ten or twenty dollars a month, well, 304 00:12:58,600 --> 00:13:00,440 Speaker 4: immediately it's probably not going to be the dial that 305 00:13:00,520 --> 00:13:02,320 Speaker 4: much on how much money is in your SUPER, but 306 00:13:02,360 --> 00:13:03,800 Speaker 4: it will force you to start thinking about it a 307 00:13:03,840 --> 00:13:04,480 Speaker 4: little bit more. 308 00:13:04,679 --> 00:13:05,920 Speaker 3: And that's why with all about. 309 00:13:05,760 --> 00:13:07,640 Speaker 1: Lie even start reading the policy. 310 00:13:07,280 --> 00:13:10,320 Speaker 4: Reading, yeah, exactly read the statement because you're a little 311 00:13:10,320 --> 00:13:14,079 Speaker 4: bit engaged. But it's again amazing that this mindset shift 312 00:13:14,120 --> 00:13:15,560 Speaker 4: that you get, and I think that's what you want 313 00:13:15,600 --> 00:13:17,760 Speaker 4: to leverage when you're younger, because we're sort of set 314 00:13:17,840 --> 00:13:19,520 Speaker 4: up to fail a little bit when it comes to 315 00:13:20,679 --> 00:13:23,720 Speaker 4: how we think about money in a psychology, and so 316 00:13:24,000 --> 00:13:26,320 Speaker 4: there's sometimes these small hacks that can just give you 317 00:13:26,320 --> 00:13:29,320 Speaker 4: that bit of an advantage. And ultimately, because super is 318 00:13:29,320 --> 00:13:31,880 Speaker 4: such a long term thing, even a small difference has 319 00:13:31,880 --> 00:13:33,240 Speaker 4: a huge impact at the back end. 320 00:13:33,320 --> 00:13:35,280 Speaker 1: But if you did have say an extra ten thousand dollars, 321 00:13:35,280 --> 00:13:37,680 Speaker 1: a year, would you say put that more towards stocks 322 00:13:37,720 --> 00:13:42,120 Speaker 1: or buying property then adding extra super anuation and payments. 323 00:13:42,320 --> 00:13:43,680 Speaker 3: Well, it depends on where you're at. 324 00:13:43,800 --> 00:13:45,920 Speaker 4: And so I think for younger people, in my opinion, 325 00:13:45,920 --> 00:13:47,800 Speaker 4: and this is not advice, and you should seek that out, 326 00:13:47,840 --> 00:13:50,160 Speaker 4: but I think for younger people, getting them into the 327 00:13:50,200 --> 00:13:52,319 Speaker 4: property market is one of the most important things that 328 00:13:52,360 --> 00:13:54,440 Speaker 4: you should be trying to do as quickly as possible. 329 00:13:54,480 --> 00:13:57,320 Speaker 4: And so if you're not in the property market, I would, personally, 330 00:13:57,320 --> 00:13:59,200 Speaker 4: i'd probably be a little bit more reluctant to go 331 00:13:59,240 --> 00:14:02,920 Speaker 4: tipping big some money into superannuation because, in my opinion 332 00:14:02,920 --> 00:14:05,200 Speaker 4: and in what the data has shown us, getting yourself 333 00:14:05,200 --> 00:14:08,040 Speaker 4: into the property market and getting on that growth path 334 00:14:08,360 --> 00:14:11,320 Speaker 4: will generally make you more money than what the tax 335 00:14:11,360 --> 00:14:14,120 Speaker 4: savings would be in super either now or into the 336 00:14:14,120 --> 00:14:16,760 Speaker 4: future as well. Once you are in the property market, though, 337 00:14:16,960 --> 00:14:20,040 Speaker 4: then it changes, you know, it's a different story, and 338 00:14:20,080 --> 00:14:22,400 Speaker 4: at that point then superannuation is worth looking at. 339 00:14:22,440 --> 00:14:23,720 Speaker 1: And I guess that's when we come to this whole 340 00:14:23,760 --> 00:14:26,160 Speaker 1: thing of which is rent investing, which is where you're 341 00:14:26,200 --> 00:14:28,240 Speaker 1: renting somewhere that you want to live, and then you 342 00:14:28,280 --> 00:14:30,360 Speaker 1: may maybe you live in Sydney, but you end up 343 00:14:30,360 --> 00:14:33,680 Speaker 1: buying somewhere in Perth, for instance, And that's kind of 344 00:14:33,680 --> 00:14:35,280 Speaker 1: become like more and more popular because people just can't 345 00:14:35,280 --> 00:14:38,720 Speaker 1: afford Sidney propery price or Melbourne property prices or where 346 00:14:38,720 --> 00:14:39,920 Speaker 1: do you sit on that, Like, do you think that's 347 00:14:40,040 --> 00:14:41,400 Speaker 1: that's the way to do it? Like, if you can't 348 00:14:41,400 --> 00:14:42,960 Speaker 1: afford where you're living and you need to live there 349 00:14:43,000 --> 00:14:45,280 Speaker 1: or want to stay there, go and buy somewhere else. 350 00:14:45,760 --> 00:14:46,000 Speaker 3: Yeah. 351 00:14:46,120 --> 00:14:48,240 Speaker 4: In my opinion, again this is not advice, but I 352 00:14:48,240 --> 00:14:50,040 Speaker 4: think that even if you can afford where you want 353 00:14:50,040 --> 00:14:51,560 Speaker 4: to live, you're generally going to be a lot better 354 00:14:51,640 --> 00:14:54,760 Speaker 4: off financially by buying that property as an investment, renting 355 00:14:54,800 --> 00:14:57,680 Speaker 4: the property next door, and then you collect the tax 356 00:14:57,720 --> 00:15:00,840 Speaker 4: savings that come from the negative gearing bene and you 357 00:15:00,960 --> 00:15:02,760 Speaker 4: end up with more money that you can then save 358 00:15:02,760 --> 00:15:05,160 Speaker 4: and invest because a lot of people aren't making the 359 00:15:05,200 --> 00:15:07,880 Speaker 4: progress that they want with their savings and investments. And 360 00:15:07,920 --> 00:15:10,680 Speaker 4: we know that on a say a one million dollar property, 361 00:15:10,680 --> 00:15:12,440 Speaker 4: when you buy it as your own home versus an 362 00:15:12,440 --> 00:15:15,840 Speaker 4: investment property, it's going to cost you about ten to 363 00:15:15,880 --> 00:15:18,480 Speaker 4: twenty thousand dollars a year less to buy that property 364 00:15:18,480 --> 00:15:21,240 Speaker 4: as an investment versus your own home, which is an 365 00:15:21,240 --> 00:15:23,800 Speaker 4: extra ten to twenty grand a year that you can 366 00:15:23,840 --> 00:15:26,880 Speaker 4: be adding to your savings, your investments, and your wealth 367 00:15:26,880 --> 00:15:29,120 Speaker 4: position over time. And so when you get to a 368 00:15:29,160 --> 00:15:31,440 Speaker 4: point where you're comfortable that you feel like you're on 369 00:15:31,480 --> 00:15:33,920 Speaker 4: a good trajectory with your investments, that you've got enough 370 00:15:33,960 --> 00:15:36,000 Speaker 4: money that you're tracking really well for the things that 371 00:15:36,040 --> 00:15:38,000 Speaker 4: you want to do into the future, then you can 372 00:15:38,040 --> 00:15:39,720 Speaker 4: start making decisions that you go, well, this is going 373 00:15:39,800 --> 00:15:41,440 Speaker 4: to give me something that I really want a little 374 00:15:41,440 --> 00:15:43,080 Speaker 4: bit more. It's going to cost me fifteen or twenty 375 00:15:43,120 --> 00:15:45,320 Speaker 4: grand a year, but I can afford to not have 376 00:15:45,400 --> 00:15:47,680 Speaker 4: that fifteen or twenty grand a year. And so it's 377 00:15:47,720 --> 00:15:49,560 Speaker 4: a bit of an unpopular opinion because people go, well, 378 00:15:49,560 --> 00:15:51,800 Speaker 4: you need security, and what if you've got kids and 379 00:15:51,880 --> 00:15:53,760 Speaker 4: all of these sorts of things. And I get that again, 380 00:15:53,920 --> 00:15:55,880 Speaker 4: like if it's the most important thing to you and 381 00:15:55,920 --> 00:15:57,360 Speaker 4: you feel like you've got the money to be able 382 00:15:57,360 --> 00:16:00,160 Speaker 4: to afford to buy your own home, then sure, but 383 00:16:00,240 --> 00:16:02,080 Speaker 4: don't go buy your own home. Then winge about the 384 00:16:02,080 --> 00:16:03,880 Speaker 4: fact that you don't have more money, because it's like 385 00:16:03,920 --> 00:16:05,200 Speaker 4: there's a clear pathway that. 386 00:16:05,280 --> 00:16:06,520 Speaker 3: Allows you to have more money. 387 00:16:06,640 --> 00:16:08,520 Speaker 4: And could make the difference between you not being able 388 00:16:08,560 --> 00:16:10,920 Speaker 4: to keep bob and actually getting ahead. 389 00:16:11,360 --> 00:16:13,480 Speaker 2: Well that was Ben Nash from Pivot Wealth speaking to 390 00:16:13,520 --> 00:16:16,720 Speaker 2: Marymadigan for news dot com dot use Cashed Up series. 391 00:16:16,760 --> 00:16:18,640 Speaker 2: We're going to have a bunch of articles and videos 392 00:16:18,640 --> 00:16:21,760 Speaker 2: online sharing more invaluable tips like the ones you just heard, 393 00:16:21,920 --> 00:16:23,760 Speaker 2: and before I go, I've actually been told I have 394 00:16:23,840 --> 00:16:26,440 Speaker 2: to do a disclaimer Okay, so I'll put on my 395 00:16:26,480 --> 00:16:30,360 Speaker 2: disclaimer voice. You should consider whether the information you just 396 00:16:30,440 --> 00:16:33,560 Speaker 2: heard is appropriate to your circumstances before acting on it, 397 00:16:33,720 --> 00:16:37,640 Speaker 2: and where appropriate, seek professional advice from a finance professional. 398 00:16:38,080 --> 00:16:39,520 Speaker 2: I think I nailed that all right. Thank you so 399 00:16:39,600 --> 00:16:41,360 Speaker 2: much for listening. I'll chat to you again tomorrow. 400 00:16:43,800 --> 00:16:47,000 Speaker 1: Follow or subscribe to from the newsroom wherever you get 401 00:16:47,040 --> 00:16:47,840 Speaker 1: your podcasts.