WEBVTT - First Home Owner Super Saver Scheme - Everything you NEED to know 0:00:00.160 --> 0:00:03.440 Good morning everyone, and welcome back to Sugar Mama's Fireplay. 0:00:03.480 --> 0:00:06.520 I am your host financial planner, and today in the 0:00:06.559 --> 0:00:10.600 studio we actually have three brains working for you. We 0:00:10.680 --> 0:00:14.840 have Richard Nichols, financial planner from Blue Lanton, and his 0:00:14.960 --> 0:00:18.239 colleague who we all know and love, our number one 0:00:18.320 --> 0:00:22.920 mortgage broker, Adam mckabe from Blue Lantern as well. Now 0:00:23.000 --> 0:00:25.919 today we're going to be talking about and unpacking for 0:00:25.960 --> 0:00:30.960 you the First Home Super Savor Scheme which was designed 0:00:30.960 --> 0:00:35.560 to help young Australians build up a deposit via their 0:00:35.560 --> 0:00:40.600 superannuation to help afford property. That is, get together that 0:00:41.159 --> 0:00:44.440 very important deposit. Now, there are a lot of things 0:00:44.479 --> 0:00:48.680 to know, understand and do for this First Home Super 0:00:48.800 --> 0:00:50.839 Saver Scheme and some of these things you may have 0:00:50.840 --> 0:00:53.440 not heard of before. So we're going to be unpack 0:00:53.479 --> 0:01:07.200 it here right now for you. Richard and Adam, thank 0:01:07.200 --> 0:01:10.240 you so much for coming in today. Now we all 0:01:10.280 --> 0:01:13.560 know that the First Home Super savest schemes, just a 0:01:13.600 --> 0:01:17.319 bit of a mouthful, is designed to help Australians get 0:01:17.400 --> 0:01:19.840 together their deposit, which for a lot of people is 0:01:19.920 --> 0:01:24.039 really hard. You know, there's so many distractions, so many temptations. 0:01:24.600 --> 0:01:27.960 Can you explain to everyone how this works and how 0:01:27.959 --> 0:01:32.000 it can help people have that deposit ready to go 0:01:32.080 --> 0:01:33.839 to get their foot in the door at the property market. 0:01:34.160 --> 0:01:36.280 Obviously for first home owners. 0:01:37.080 --> 0:01:41.520 In simple terms count it's designed to help people save 0:01:42.600 --> 0:01:45.840 I think from early days. So you're looking at, you know, 0:01:46.080 --> 0:01:48.040 if you've got aspirations to buy a property and your 0:01:48.080 --> 0:01:50.240 savings are low, this is a way that helps you 0:01:50.280 --> 0:01:52.280 get ahead from the normal means where it's just a 0:01:52.360 --> 0:01:55.280 high interest account at the moment. High interest accounts to 0:01:55.320 --> 0:01:57.920 say four to five percent, which isn't a lot. So 0:01:57.960 --> 0:02:00.800 it gives you the opportunity to contribute up to fifteen 0:02:00.880 --> 0:02:04.840 thousand per year and then withdraw up to fifty thousand 0:02:05.360 --> 0:02:07.440 over a five year period for that first time. 0:02:07.880 --> 0:02:10.040 So this is definitely not for people who need to 0:02:10.040 --> 0:02:12.560 buy it buy a property in the next six months. 0:02:12.560 --> 0:02:16.280 This is something you particularly for someone maybe that's a student, 0:02:16.600 --> 0:02:19.640 you know, maybe doing tertial education and thinks, okay, well, 0:02:19.680 --> 0:02:22.000 when I do get graduate and I get a job 0:02:22.040 --> 0:02:24.160 and you know, I've had a full time job and 0:02:24.200 --> 0:02:26.920 a salary for a couple of years, there potentially my 0:02:27.040 --> 0:02:28.400 deposit could come from this. 0:02:28.680 --> 0:02:32.080 If it's still a mail that's right, and perhaps you know, 0:02:32.120 --> 0:02:36.200 there might be circumstances where if it's timed in terms 0:02:36.200 --> 0:02:38.560 of a taxi where you could put a large amount 0:02:38.560 --> 0:02:40.960 in and get a small benefit from tax savings. 0:02:40.520 --> 0:02:43.240 In doing it. But primarily it's designed for that longer 0:02:43.320 --> 0:02:46.760 term strategy which is allowing you to also withdraw the 0:02:46.840 --> 0:02:49.560 earnings from that associated super contribution. 0:02:50.280 --> 0:02:52.119 So for any of the listeners out there who have, 0:02:52.240 --> 0:02:55.840 you know, teenage children, this is something you know you 0:02:55.840 --> 0:02:57.560 should be talking to your kids about. Is it a 0:02:57.560 --> 0:02:59.400 potential option to be able to get your foot in 0:02:59.480 --> 0:03:01.440 the door, particularly if they know about it now and 0:03:01.480 --> 0:03:03.160 they can start sort of planning preparing. 0:03:03.440 --> 0:03:08.600 Definitely, particularly if we're looking at the average super returns, 0:03:08.880 --> 0:03:13.519 you know it's probably probably double your potential return through 0:03:13.600 --> 0:03:14.359 general banks saving. 0:03:14.480 --> 0:03:16.120 Yeah, and obviously we've got to keep in mind, you know, 0:03:16.360 --> 0:03:19.560 marcut volatility and you know, depending obviously, and how that 0:03:19.680 --> 0:03:22.919 superinhuation money is actually invested is also incredibly important. You 0:03:23.120 --> 0:03:26.280 will come to with Richard in a moment. Who is 0:03:26.440 --> 0:03:27.799 eligible for this. 0:03:28.919 --> 0:03:31.639 The eligibility is really open, so as long as you're 0:03:31.680 --> 0:03:34.320 eighteen years of age, you don't need to be Australia 0:03:34.360 --> 0:03:40.920 resident or citizen. First home buyer. It's a really open scheme. 0:03:41.880 --> 0:03:43.720 Single parents who've never bought before. 0:03:45.000 --> 0:03:45.280 Wow. 0:03:45.360 --> 0:03:48.160 Okay, so it really does start to open up, you know, 0:03:48.920 --> 0:03:50.680 opportunities for a lot of people that may have had 0:03:50.680 --> 0:03:53.760 that sort of block there previously. What would you say 0:03:53.760 --> 0:03:58.080 there are any misconceptions around around this, probably. 0:03:57.800 --> 0:04:00.920 Around the tax side of it. You know that it's 0:04:01.000 --> 0:04:05.040 full fully tax exempt, which isn't the case, you know, 0:04:05.360 --> 0:04:07.600 and you know you really should speak to your accountant 0:04:07.760 --> 0:04:09.320 around advice in that regard, and. 0:04:09.240 --> 0:04:11.560 Always get advice before you make the delisions because you 0:04:11.560 --> 0:04:13.440 don't want to sort of have any regret. 0:04:13.680 --> 0:04:16.520 No, absolutely, and particularly if you're looking at calculating what 0:04:16.560 --> 0:04:18.760 you'll be able to withdraw at the time of buying, 0:04:19.520 --> 0:04:21.640 you need to be familiar with with what will come 0:04:21.680 --> 0:04:23.760 out and those tax implications as well. 0:04:24.360 --> 0:04:26.760 All right, for young families that think, okay, this may 0:04:26.760 --> 0:04:30.360 be our hope to be able to secure a property, 0:04:31.040 --> 0:04:33.040 how do they maximize this benefit? 0:04:33.920 --> 0:04:36.560 Well, to maximize it, you probably need to be saving 0:04:36.600 --> 0:04:38.320 for a longer period of time, So start as soon 0:04:38.360 --> 0:04:42.840 as you can, Okay, get those contributions going in and 0:04:42.920 --> 0:04:45.120 as we said, be familiar with what investment that is 0:04:45.160 --> 0:04:47.240 going into within your super fund, So speak to your 0:04:47.279 --> 0:04:52.680 superphone and look at you know, minimizing the risk I 0:04:52.680 --> 0:04:56.280 guess of the asset classets in. At that point, you're 0:04:56.320 --> 0:04:58.120 doing as much as you can. The longer you're doing it, 0:04:58.200 --> 0:05:00.760 maximizing how much you can put in and take cout. 0:05:01.279 --> 0:05:04.320 You're getting some tax savings on the way and hopefully 0:05:04.360 --> 0:05:06.840 a much higher return than what you're getting within a 0:05:07.040 --> 0:05:08.839 normal bank or turn deposit account. 0:05:09.839 --> 0:05:12.480 Can a couple or say a family, you know, we've 0:05:12.520 --> 0:05:15.640 got two working adults that are both never earned owned 0:05:15.680 --> 0:05:20.040 property before. Can they each use their superannuation schemists system 0:05:20.040 --> 0:05:21.239 and a combine their deposit. 0:05:21.400 --> 0:05:24.840 Yes, absolutely, And that's that's particularly from my experience, what 0:05:24.920 --> 0:05:27.520 I've what I've been doing with kinds of mind that 0:05:27.560 --> 0:05:30.599 have taken advantage of this scheme. They've both contributed the 0:05:30.600 --> 0:05:33.320 same amounts well, depending on you know, if we're talking broadly, 0:05:33.560 --> 0:05:37.479 depending on the income levels of each family member. But 0:05:37.960 --> 0:05:39.919 if you're on an equal income and you can contribute 0:05:39.920 --> 0:05:42.599 the same amount, then then ideally come the end of 0:05:42.640 --> 0:05:45.680 that stage, you both contributed the maximum and withdrawing the 0:05:45.720 --> 0:05:46.920 maximum for that purchase. 0:05:47.800 --> 0:05:50.640 Richard, I'm interested to know your thoughts of this because 0:05:50.640 --> 0:05:54.159 when this first came out, I was really concerned that 0:05:54.240 --> 0:05:57.120 people would then start use their superannuation money, which is 0:05:57.160 --> 0:05:58.880 something really I see is something and being like a 0:05:58.880 --> 0:06:01.200 bit of a treasure chest that's long away and take 0:06:01.279 --> 0:06:06.280 you away from distruction and temptation and reckless spending and 0:06:06.680 --> 0:06:09.719 really sort of changing people's mindset. What are your thoughts 0:06:09.760 --> 0:06:11.120 when you saw this come in? 0:06:12.200 --> 0:06:16.320 Similar concerns, But I think with this really you must 0:06:16.360 --> 0:06:19.479 remember that these are contributions that probably wouldn't have been 0:06:19.520 --> 0:06:22.640 made to start with. You know, people are putting in 0:06:22.680 --> 0:06:26.440 the fifteen thousand with the object of withdrawing for a 0:06:26.480 --> 0:06:29.680 property deposit, so it's not really taking away from their 0:06:29.720 --> 0:06:32.080 retirement assets because this money wouldn't have gone in in 0:06:32.120 --> 0:06:35.200 the first place. Yeah, you know, if they are concerned 0:06:35.200 --> 0:06:38.720 about marketing volatility, most super funds will have a defensive 0:06:38.760 --> 0:06:40.960 option that they could place this money. 0:06:40.680 --> 0:06:44.960 In, and they're normally you know, assets such as cash 0:06:45.000 --> 0:06:49.960 and fix interest still investments and still have some volatility 0:06:49.960 --> 0:06:53.280 in fluctuations, but less aggressive indeed. 0:06:53.400 --> 0:06:58.200 And also the return while the returns may not be 0:06:58.640 --> 0:07:01.479 hugely different to you would get sitting in a bank account, 0:07:01.480 --> 0:07:05.200 in a defensive asset within super the tax side on 0:07:05.240 --> 0:07:07.839 those earnings would be a lot less because your tax 0:07:07.920 --> 0:07:11.560 on earnings inside a super is fifteen percent, whereas you're 0:07:11.560 --> 0:07:14.360 going to pay your marginal rate, and if you're at 0:07:14.360 --> 0:07:16.160 top marginal and that's forty five percent, you're going to 0:07:16.160 --> 0:07:18.880 pay on any on the same earnings outside of super. 0:07:18.920 --> 0:07:22.680 So you know, a you've got that potential for increase return. 0:07:22.720 --> 0:07:25.400 But be more importantly, you don't pay as much tax 0:07:25.440 --> 0:07:26.800 on the earnings along. 0:07:26.480 --> 0:07:28.520 The way, and I think the average Australian is paying 0:07:28.560 --> 0:07:32.160 about thirty two thirty so instantly there as almost like 0:07:32.440 --> 0:07:37.080 you know, doubling you with your NEPH. Indeed, all right, 0:07:37.120 --> 0:07:39.720 there are some changes coming up in I believe September 0:07:40.120 --> 0:07:43.360 for the this scheme. Can you just explain what the 0:07:43.440 --> 0:07:44.800 changes are and what we need to be aware of 0:07:44.800 --> 0:07:48.280 if we're contemplating, you know, setting this up and potentially 0:07:48.400 --> 0:07:50.760 using this in five years time. 0:07:51.240 --> 0:07:53.920 The changes are very small, mainly to be able to 0:07:53.960 --> 0:07:58.200 fix errors within the applications and how you contributed those funds. 0:07:59.040 --> 0:08:01.480 And also if you change your mind, you know, sometimes 0:08:01.520 --> 0:08:05.040 your circumstances change and you're no longer in a position 0:08:05.120 --> 0:08:08.520 to buy, and that that could be a considerable time away. 0:08:08.840 --> 0:08:10.680 So then there are options to withdraw all that money 0:08:10.720 --> 0:08:11.360 back out. 0:08:11.560 --> 0:08:13.640 So what happens, for example, you know, say I want 0:08:13.640 --> 0:08:15.440 to do this as the first time, and I set 0:08:15.440 --> 0:08:18.280 it up and I'm contributing to it. Then say I 0:08:18.320 --> 0:08:20.520 win the lottery, you know, and I can now buy 0:08:21.240 --> 0:08:24.360 you know, I have a deposit now that money though, 0:08:24.560 --> 0:08:26.120 I can still potentially get it out. 0:08:26.240 --> 0:08:28.840 But if you win the lottery, you probably don't really care. 0:08:28.960 --> 0:08:30.880 Well, it depends not much, I m of course, mostly. 0:08:30.920 --> 0:08:32.800 I mean it might be one hundred thousand, or it 0:08:32.880 --> 0:08:34.800 might be you know, a couple of million dollars, which 0:08:34.800 --> 0:08:37.839 would be great, but you know, because obviously we need 0:08:37.880 --> 0:08:41.120 to be realistic things. You know, situations change, people might 0:08:41.160 --> 0:08:44.360 move overseas. You know that that dream, that goal, you know, 0:08:44.640 --> 0:08:47.959 may pivot. We need to be aware of those things 0:08:47.960 --> 0:08:50.480 that you know, if we've been contributing to it, we 0:08:50.559 --> 0:08:52.080 can't get that money then back out. 0:08:52.280 --> 0:08:54.160 Yeah, so you can get it back out, you can, 0:08:54.200 --> 0:08:58.280 And it's it's essentially the same process for applying for 0:08:58.480 --> 0:09:00.800 the deposit to be returned to you for a purchase. 0:09:00.840 --> 0:09:04.760 So you need to apply for a determination through the ATO, 0:09:05.480 --> 0:09:08.360 the ATO then process that claim after you sorry, after 0:09:08.360 --> 0:09:10.760 you claim it through your super fund. It gets returned 0:09:10.800 --> 0:09:13.800 to an ATO holding account as I understand it, where 0:09:13.800 --> 0:09:16.760 they then process a determination if you're taking it back 0:09:16.760 --> 0:09:19.040 out not to buy a property. That's when they apply 0:09:19.080 --> 0:09:20.240 the marginal tax rates. 0:09:20.600 --> 0:09:22.120 Yes, okay, so this is what I'm saying is you 0:09:22.120 --> 0:09:23.880 know what if I decide, ahually I don't need that, 0:09:24.160 --> 0:09:26.240 you know, money returns up big enough to posit, or 0:09:26.240 --> 0:09:28.880 I'd inherited some money with something because these you know, 0:09:28.920 --> 0:09:31.839 with an aging population of baby boomers, these are things 0:09:31.840 --> 0:09:32.880 that actually. 0:09:32.520 --> 0:09:35.120 Could something happen, And if you didn't need it anymore, 0:09:35.200 --> 0:09:36.719 then it's in the best place it can be in 0:09:36.800 --> 0:09:38.319 your super fund exactly. 0:09:39.040 --> 0:09:41.040 Wouldn't you a mode if you don't need to take 0:09:41.040 --> 0:09:41.360 it out. 0:09:41.280 --> 0:09:41.760 And keep it that? 0:09:42.040 --> 0:09:44.520 Yeah, yeah, it's only going to help, you know, create 0:09:44.520 --> 0:09:48.119 greater financial stability for your long run financial benefit. Absolutely. 0:09:48.520 --> 0:09:51.680 All right. There's all about the rules of the first 0:09:51.800 --> 0:09:54.760 I can't even say, probably the first home owner super 0:09:54.800 --> 0:09:57.800 skate super saber scheme. What are the things you need 0:09:57.840 --> 0:09:59.360 to know when you've got to apply. 0:09:59.640 --> 0:10:01.440 Yes, so you need it needs to be going as 0:10:01.480 --> 0:10:05.280 a voluntary contribution, so your accountant needs to be aware 0:10:05.320 --> 0:10:07.080 of that, and the super and contacts is super fun 0:10:07.120 --> 0:10:09.280 to advise them of the contributions you're making, so that's 0:10:09.320 --> 0:10:12.680 allocated towards the super SAVIS scheme that can be withdrawn 0:10:12.760 --> 0:10:14.160 once your love's a determination. 0:10:15.120 --> 0:10:17.679 Do you think this is something Richard, that someone should 0:10:17.679 --> 0:10:20.360 go and see a financial planner about if they're thinking about. 0:10:20.080 --> 0:10:24.520 Doing Ah, yes they should that or their accountant, either 0:10:24.520 --> 0:10:27.440 one of those would be able to give them the 0:10:27.480 --> 0:10:32.280 information they need to make that determination, or even the 0:10:32.400 --> 0:10:33.520 super fund themselves. 0:10:34.120 --> 0:10:35.760 Well, a lot of super innuation accounts. Now, how this 0:10:35.880 --> 0:10:38.079 general advice has none by like a one one hundred 0:10:38.360 --> 0:10:40.600 now one eight hundred dollar that you can access free advice. 0:10:40.640 --> 0:10:43.000 But also I think you're talking to a financial planner 0:10:43.520 --> 0:10:46.320 just having that meeting of mind, talking about okay, well, 0:10:46.320 --> 0:10:48.000 what are your goals? Why do you want to buy 0:10:48.000 --> 0:10:50.120 a home, what's important to you? Where do you see 0:10:50.320 --> 0:10:52.760 your future? Where do you want to live? You know, 0:10:52.920 --> 0:10:55.600 what's the lifestyle that you want? You know, what where's 0:10:55.679 --> 0:10:58.520 your value system? Having those important conversations may actually uncover 0:10:58.600 --> 0:10:59.920 that maybe property is not what you want to do, 0:11:00.080 --> 0:11:02.240 and in fact you are look at an investment portfolio 0:11:02.440 --> 0:11:05.040 you want to look at focusing more on your superannuation 0:11:05.200 --> 0:11:06.920 so that you have that piece of mind knowing you 0:11:06.920 --> 0:11:10.040 can retire and retire on time and on the you know, 0:11:10.120 --> 0:11:12.800 the income that you want and you know, would you 0:11:12.840 --> 0:11:13.360 agree with that? 0:11:13.480 --> 0:11:13.840 I think so? 0:11:13.880 --> 0:11:17.559 And also where you want to buy, because yeah, if 0:11:17.559 --> 0:11:20.600 there's a couple, yeah you can get a utilize one 0:11:20.640 --> 0:11:24.679 hundred thousand of of that. But if you looking to 0:11:24.679 --> 0:11:27.959 buy in Sydney, one hundred thousands unfortunately doesn't get you. 0:11:28.280 --> 0:11:31.160 Fry it it gets to you, not even a parking spot, 0:11:32.960 --> 0:11:35.000 Adam coming back to you when it comes you know, 0:11:35.120 --> 0:11:38.480 is this something that mortgage brokers do? You know we've 0:11:38.520 --> 0:11:40.960 mentioned about talking to your accountant, talking to your superannuation 0:11:41.440 --> 0:11:43.720 provide obviously to endo your family about you know, what 0:11:43.760 --> 0:11:45.839 your goals are. Do you also need to let the 0:11:45.880 --> 0:11:48.480 mortgage broker that, Okay, my deposit I'm working on is 0:11:48.520 --> 0:11:50.360 going to be funded through you know. 0:11:50.960 --> 0:11:52.920 We really need to be aware of it because the 0:11:52.960 --> 0:11:55.839 process and one of the rules for withdrawing the money 0:11:55.880 --> 0:11:58.440 is that you should do that for the determination before 0:11:58.440 --> 0:11:59.800 signing a properly contract. 0:12:00.000 --> 0:12:01.120 So you've got to be very organizic. 0:12:01.120 --> 0:12:01.560 Line you do. 0:12:02.080 --> 0:12:03.840 If you don't sign a contract, I don't know if 0:12:03.880 --> 0:12:06.600 we can go back in again. I'm not too sure. 0:12:07.360 --> 0:12:08.960 Gosh, that would be hard because whatd have had something 0:12:09.000 --> 0:12:13.520 happens and you the property fell through. It does occasionally happen. 0:12:13.679 --> 0:12:15.400 Weile you go to the auction and you didn't write 0:12:15.440 --> 0:12:16.240 the winning better. 0:12:16.240 --> 0:12:18.319 Yeah, and then you just keep on getting out bit 0:12:18.360 --> 0:12:20.320 all the time over the next twelve months. You know that. 0:12:20.360 --> 0:12:21.880 I mean, and I guess this is one of the 0:12:21.920 --> 0:12:25.439 downsides all this, which you know, hopefully with this new 0:12:25.640 --> 0:12:30.320 legislation coming in September. Allows, that's right, those twenty four Okay, 0:12:30.360 --> 0:12:32.480 well there, we've got twenty four months. But still I mean, 0:12:32.960 --> 0:12:35.079 I mean, I know people who have been looking for you, yeah, yeah. 0:12:34.960 --> 0:12:37.440 To get there because once it's out, if you don't buy, 0:12:37.520 --> 0:12:40.959 then I assume they would then that triggers they tack 0:12:41.080 --> 0:12:43.000 extra tacks in twenty four months or something. 0:12:43.520 --> 0:12:45.560 Gosh, you, I mean, you have to have all your 0:12:45.600 --> 0:12:46.320 ducks lined up. 0:12:47.080 --> 0:12:51.040 You've got twelve months from the determination date for withdrawing it. 0:12:51.120 --> 0:12:53.319 For the purpose of signing a contract and paying a deposit, 0:12:53.360 --> 0:12:56.720 you've got twelve months to use it. Obviously, we understand that, 0:12:56.760 --> 0:13:00.960 particularly if you go into auctions, success rights and bidding 0:13:01.040 --> 0:13:04.560 is relatively low. So you've got twelve months and they 0:13:04.559 --> 0:13:07.280 can give you an extension up to twenty four months, okay, 0:13:07.320 --> 0:13:10.160 which you don't need to apply, so I six, well up, 0:13:10.640 --> 0:13:13.800 no twenty four ok okay. 0:13:13.920 --> 0:13:16.240 Well, I mean that starts to be a lot more relaship. 0:13:16.240 --> 0:13:18.040 But still it's something you want to know because if 0:13:18.040 --> 0:13:19.400 it means okay, you're going to miss out on a 0:13:19.400 --> 0:13:22.040 property by five thousand dollars and you're going to get 0:13:22.080 --> 0:13:23.920 back to square one and you are cutting it fine 0:13:24.000 --> 0:13:26.480 with those deadlines, it's good to know these things. And again, 0:13:26.760 --> 0:13:28.199 I guess that's why you've you've got to speak to 0:13:28.200 --> 0:13:30.000 a mortgage broker. You've got to read the fine print, 0:13:30.240 --> 0:13:32.280 you've got to be organized, you've got to know your numbers, 0:13:32.320 --> 0:13:34.600 your limits as to how you know what you're getting 0:13:34.640 --> 0:13:37.160 back your taxes, and obviously how much you can afford 0:13:37.160 --> 0:13:39.800 to borrow. Do you have any success stories that you 0:13:39.880 --> 0:13:41.680 can share with us as to people who have been 0:13:42.880 --> 0:13:45.480 able to actually finally get a property by using. 0:13:45.280 --> 0:13:48.679 This success stor it? Look, this example was just what 0:13:48.720 --> 0:13:52.640 I think is probably fortunate in time and to circumstances, 0:13:52.679 --> 0:13:56.640 but customers of mine that recently used it using the 0:13:56.679 --> 0:14:00.960 super Saver scheme, not well, we're able to save and 0:14:01.040 --> 0:14:04.200 avoid mortgage insurance. And I think the mortgage insurance it 0:14:04.280 --> 0:14:06.319 was it just got over the line by a few 0:14:06.320 --> 0:14:09.079 thousand dollars. So I'd put that down towards the returns 0:14:09.080 --> 0:14:11.360 that they were getting within the super fund as being 0:14:12.360 --> 0:14:14.520 you know, the returns were then super fund were more 0:14:14.559 --> 0:14:17.160 than what they get outside of it, and that small difference. 0:14:17.240 --> 0:14:19.520 Probably want to help them avoid mortgage insurance. 0:14:19.120 --> 0:14:19.480 In the end. 0:14:19.720 --> 0:14:22.760 And how much whether that mortgage insurance costs them if 0:14:22.760 --> 0:14:26.720 they didn't have this intended that's huge. That's a that's 0:14:26.760 --> 0:14:28.760 a great win. And you know what, I really believe 0:14:28.800 --> 0:14:32.520 you make your own luck. You know, it's that's this 0:14:32.600 --> 0:14:34.280 is why you need to be informed and you need 0:14:34.320 --> 0:14:35.760 to know about this as an option if you're trying 0:14:35.800 --> 0:14:36.400 to eat it within the. 0:14:36.400 --> 0:14:37.960 Door preparation research. 0:14:38.720 --> 0:14:41.520 Yeah, and you know, you know it is fifteen thousand 0:14:41.560 --> 0:14:43.640 dollars a year. It is a lot of money to 0:14:43.640 --> 0:14:45.440 take out of your cash. But if you're you know, 0:14:45.520 --> 0:14:48.320 the discipline of it is, you can't spend it. You 0:14:48.320 --> 0:14:50.680 can't see something online and just get distracted and go 0:14:50.720 --> 0:14:53.120 blow it on a new television or a handbag or 0:14:53.480 --> 0:14:55.960 you know, a trip to Europe. It's in there. They're 0:14:56.000 --> 0:14:58.280 holding it and taking away that temptation for you, which 0:14:58.280 --> 0:15:00.720 for a lot of people is needed. 0:15:01.040 --> 0:15:05.160 That's right, But also that fifteen thousand, it's a deductible contribution, 0:15:05.280 --> 0:15:08.360 so you're not you're not impacting your cash blow by 0:15:08.360 --> 0:15:11.480 fifteen thousand exactly, depending on your marginal rate. You know, 0:15:11.480 --> 0:15:13.840 if your top marginal or that might only impact your 0:15:13.920 --> 0:15:16.640 cash flow by seven and a half to eight nine thousand, 0:15:16.720 --> 0:15:20.320 So it's not as bad as one would first think 0:15:20.640 --> 0:15:21.920 making that extra conjolution. 0:15:22.920 --> 0:15:26.040 Richard, what would you say from a financial planner's point 0:15:26.040 --> 0:15:29.440 of view with this? You know, you know people to 0:15:29.440 --> 0:15:31.640 think about. Obviously, we've touched on the importance of making 0:15:31.640 --> 0:15:34.520 sure that that money's invested with a five year investment 0:15:34.520 --> 0:15:37.400 in time horizon. So you wouldn't recommend someone who's doing 0:15:37.400 --> 0:15:40.600 this put all their money into the shares and property 0:15:40.600 --> 0:15:44.320 allocation within their superannuation. You know, talked about those conservative 0:15:44.360 --> 0:15:48.040 asset classes as potentially being wiser because we do need 0:15:48.040 --> 0:15:50.440 to pull that money out. What other things do you 0:15:50.520 --> 0:15:53.760 see as important to consider as part of this. 0:15:54.160 --> 0:15:56.640 First of all, making sure you can comfortably make that 0:15:56.680 --> 0:16:01.880 contribution without it impacting your lifestyle and you've touched on 0:16:02.400 --> 0:16:03.880 you want to make sure that you're not in the 0:16:04.200 --> 0:16:07.200 too aggressive fund for those moneys because most super funds, 0:16:07.200 --> 0:16:09.640 you'll be able to allocate that money going into a 0:16:09.640 --> 0:16:11.680 specific fund. It doesn't have to go into your default 0:16:11.720 --> 0:16:16.280 mix probably be seventy percent allocation to equity markets. So 0:16:16.560 --> 0:16:18.040 I think that's the main thing you want to make 0:16:18.080 --> 0:16:19.960 sure of, is that say you that that money is 0:16:20.360 --> 0:16:22.320 not going to impact or the lack of that money 0:16:22.320 --> 0:16:24.600 going into super is not going to be impacting your 0:16:24.600 --> 0:16:28.280 cash flavor. And then yesb that you've got it invested 0:16:28.320 --> 0:16:31.480 in an an appropriate asset for the timeframe you've got 0:16:31.480 --> 0:16:34.400 because five years isn't a great deal of time in 0:16:34.440 --> 0:16:35.600 an investment lifetime. 0:16:35.800 --> 0:16:37.640 And the other thing I have to say is, you know, 0:16:37.640 --> 0:16:39.640 if anyone that wants to do this, don't just look 0:16:39.640 --> 0:16:42.080 at this as purely your deposit, like try and save 0:16:42.240 --> 0:16:46.000 separately elsewhere if you can, because you do need to 0:16:46.040 --> 0:16:48.200 have that discipline. You do need to learn how to 0:16:48.200 --> 0:16:50.200 stick to a budget. You do need to learn how 0:16:50.520 --> 0:16:52.760 you know to say no to buying something or splurging 0:16:52.840 --> 0:16:55.080 on something because you've got this big responsibility and this 0:16:55.120 --> 0:16:58.120 big goal that you're working towards, So don't just rely 0:16:58.280 --> 0:17:01.120 these or deposit being purely bus have a separate savings 0:17:01.160 --> 0:17:03.840 account nickname it, you know, my deposit money, and try 0:17:04.560 --> 0:17:06.960 if you can. We know, as you said, within your budget, 0:17:07.320 --> 0:17:09.560 you know, have a regular saving plan towards that, so 0:17:09.640 --> 0:17:11.879 that you do have a cash too as well as 0:17:11.920 --> 0:17:15.240 this this superannuation save scheme money as well, so you 0:17:15.240 --> 0:17:17.480 can find the two and potentially you know again no 0:17:17.600 --> 0:17:21.560 save on ortgage insurances or potentially not need a guarantalk 0:17:21.560 --> 0:17:23.600 because you've got a decent sized deposit building up there, 0:17:23.640 --> 0:17:25.280 You're only going to look more desirable to the bank, 0:17:25.320 --> 0:17:26.080 would you correct? 0:17:26.119 --> 0:17:28.800 Absolutely? And because if we're talking about Sydney market, you 0:17:28.840 --> 0:17:31.080 and your partner contribute fifty thousand each to the super 0:17:31.080 --> 0:17:34.040 Savior scheme. You take me out one hundred plus earnings, 0:17:34.280 --> 0:17:36.920 it's ten percent deposit and a mean or the property. Yeah, 0:17:37.200 --> 0:17:39.360 so that you think got mortgage insurance if you don't 0:17:39.400 --> 0:17:43.040 have more than ten percent stamp duty so you need 0:17:43.080 --> 0:17:45.960 a lot more continue saving. Don't just use this as 0:17:46.000 --> 0:17:47.919 one now is it will supplement it? 0:17:48.000 --> 0:17:51.919 Correcte? Yeah? Really wise advice and Richard, I want to 0:17:51.920 --> 0:17:55.080 not end with you if that's Okay, if someone has 0:17:55.119 --> 0:17:58.040 gotten too a great habit, because five years is a 0:17:58.080 --> 0:18:00.560 long time to create a habit, you know, not even 0:18:00.640 --> 0:18:04.399 missed that money. And you know, say someone uses this, 0:18:04.480 --> 0:18:06.639 they have their regular savings plan for their deposit and 0:18:06.680 --> 0:18:09.520 they've got you know, their super Sabers skime money as well. 0:18:10.520 --> 0:18:12.720 And the reason why I say this is just so 0:18:12.840 --> 0:18:15.280 much of a financial being is habit. You know, you think, 0:18:15.359 --> 0:18:16.760 you know when you don't think about you just do it. 0:18:17.119 --> 0:18:19.640 Once you've got your deposit, you know, you've bought your property, 0:18:19.760 --> 0:18:22.480 you've taken that money out. You know, you're cooking with gas, 0:18:22.480 --> 0:18:23.919 you're you're foot in the door of the property, and 0:18:23.920 --> 0:18:26.480 you're paying your mortgage off. What are your thoughts as 0:18:26.520 --> 0:18:28.679 to what to do with that fifteen thousand that you've 0:18:28.720 --> 0:18:32.720 previously been contributing. Obviously, there's a thousand ways to skin 0:18:32.800 --> 0:18:36.840 a cat. You know, should they should one consider putting 0:18:36.840 --> 0:18:39.240 that as an extra payment towards their mortgage or should 0:18:39.280 --> 0:18:42.240 they maybe if they're comfortable that rebuild their superannuation because 0:18:42.240 --> 0:18:44.760 they like seeing a nice healthy balance there and knowing 0:18:44.760 --> 0:18:47.080 that that's the retirement money. What are your thoughts under 0:18:47.119 --> 0:18:49.919 the obviously the banner of general advice like, because I 0:18:49.960 --> 0:18:52.320 think you want to keep riding off great habits. You 0:18:52.320 --> 0:18:54.440