Speaker 1: My name is Tatasha Bamblet. I'm a proud First Nations
Speaker 1: woman and I'm here to acknowledge country t Glenn Young
Speaker 1: Ganya nianar Kaka yah Ya bin Ahaka nian Our gay
Speaker 1: in Nimbina, yakarum jar Dominyamiga Umagahawakaman damon Imlan Bumba, bang
Speaker 1: Gadabomba in and now in wakah ghana on yak rum
Speaker 1: jar Watnadaa. Hello, beautiful friends, we gather on the lands
Speaker 1: of the Aboriginal people. We thank acknowledge and respect the
Speaker 1: Aberiginal people's land that we're gathering on today. Take pleasure
Speaker 1: in all the land and respect all that you see.
Speaker 1: She's on the Money podcast acknowledges culture, country, community and connections,
Speaker 1: bringing you the tools, knowledge and resources for you to thrive.
Speaker 2: She's on the Money. She's on the Money. Hello, and
Speaker 2: welcome to She's on the Money, the podcast that's here
Speaker 2: to make sure you're living your best life in retirement.
Speaker 2: So you might remember our last super episode come out
Speaker 2: so much I did. It was just so there's a
Speaker 2: lot to take in. And I know that whoever was
Speaker 2: listening probably thought the same. And if you didn't I'm
Speaker 2: so sorry, And here is the second part. So we
Speaker 2: did have to split into two parts, and you guys
Speaker 2: have been begging for part two, so today is the
Speaker 2: follow up episode you've been waiting for. I'm begsited and
Speaker 2: with me is the biggest fan of Super I've probably
Speaker 2: ever met, Victoria Devine.
Speaker 3: I love Superannuation so sexy.
Speaker 2: Yeah, I think it can be.
Speaker 3: And I feel like my energy towards Super hopefully rubs
Speaker 3: off on our community a little bit, even if it
Speaker 3: means you go, what is she talking about?
Speaker 2: Why is she so excited about it?
Speaker 3: Maybe I'll just check to like, maybe I'll just have
Speaker 3: a little look see, Yeah, what's.
Speaker 2: All the hype about it?
Speaker 1: Yeah?
Speaker 3: And then you log into your Superinuation platform after doing
Speaker 3: like what full password resets and like a code on
Speaker 3: your phone or something, and.
Speaker 2: You'll be like, this is actually boring. It's not worth it.
Speaker 2: It's not worth it, but I promise it is.
Speaker 3: And I've been so excited to be allowed to be
Speaker 3: let loose on episode two because I think once you
Speaker 3: realize how much impact even very small amounts and very
Speaker 3: small tweaks can have, it stops feeling boring and something
Speaker 3: that is for older people or something that is for
Speaker 3: future you or an issue you'll deal with later, and
Speaker 3: it starts to feel really powerful because especially like you
Speaker 3: and I are talking about it all the time. Back
Speaker 3: life's expensive. Yeah, absolutely, our budgets are cooked. Like I'm
Speaker 3: talking to people in our community every single day, and
Speaker 3: that's hard, like not talking to you guys. I love
Speaker 3: that part, But like money is hard at the moment,
Speaker 3: and none of us feel like we're getting ahead, like
Speaker 3: we all just go hold on. I want to start
Speaker 3: my investing journey and that's fantastic, But you might not
Speaker 3: have any free cash flow because how the hell are
Speaker 3: groceries costing you two hundred bucks a week and you're single?
Speaker 3: You know, like I just I really truly get it.
Speaker 3: But that's where superranuation can make you feel quite powerful
Speaker 3: because these tweaks.
Speaker 2: Not a dollar. It's not going to cost you anything.
Speaker 3: I just want you to like clean house, make sure
Speaker 3: everything's where it needs to be, and that your money's
Speaker 3: growing so that future you doesn't have to worry about
Speaker 3: money in the way that current you is.
Speaker 2: And like Beck, that's kind of low key sexy. Absolutely, Lie,
Speaker 2: I think it's quite comforting knowing that even if you're
Speaker 2: really broke right now, there's a time in this life,
Speaker 2: hopefully we get to see it where you actually have
Speaker 2: money just waiting there.
Speaker 3: For you, exactly, and like its slow and steady wins
Speaker 3: the race, Like I wish that I could waive a
Speaker 3: magic wand and like make it really easy for you.
Speaker 3: But the reality of money and the reality of superannuation
Speaker 3: and the reality of honestly life is it's tiny steps
Speaker 3: in the right direction that when you look back, you go,
Speaker 3: oh my god, I've come so far, but not going
Speaker 3: to wake up tomorrow and be like, oh my god,
Speaker 3: you're right, I'm finally good at money exactly.
Speaker 2: It doesn't happen like that.
Speaker 3: And I guess you're my favorite example of this, not
Speaker 3: because of superannuation, but because of investing in general. Yes,
Speaker 3: like sorry, you now have a little investment portfolio and
Speaker 3: you've never been that financially secure before.
Speaker 2: Totally. Did that happen overnight though?
Speaker 3: No?
Speaker 2: And the thing is too, is that like, I still
Speaker 2: am completely broke, I don't have any savings, but you're.
Speaker 3: Starting to build your financial security.
Speaker 2: Yeah, of different ways and exact things, And it's very empowering,
Speaker 2: it's very very empowering. So it does exactly. It does
Speaker 2: not happen overnight. It's very small and there's like there's
Speaker 2: a change pie. I guess that someone showed me recently
Speaker 2: where it's like thinking about maybe doing something is still
Speaker 2: part of the change cycle, and it's like you've been
Speaker 2: thinking about it.
Speaker 3: Listening to you listening to this episode like you're doing
Speaker 3: really close.
Speaker 2: Absolutely, that's really cool. So before we jump in, can
Speaker 2: you give us a quick recap of part one?
Speaker 3: I would love to, but I'd also love for you
Speaker 3: to go and listen to that episode if you haven't.
Speaker 3: If you have, I'm going to give you a recaps.
Speaker 3: So we covered what I would call the foundations, so
Speaker 3: the base level of things that you need to understand
Speaker 3: about super. So I told you about how you can
Speaker 3: check your balance, what my gove is, how that works,
Speaker 3: How to check and make sure that your employer is
Speaker 3: actually contributing twelve percent and that it's actually being paid
Speaker 3: to you. How to use and this is one of
Speaker 3: my favorite tools, the Government's your super tool to check
Speaker 3: your fund's performance and the fees and whether it's aligned
Speaker 3: to your.
Speaker 2: Goals and values.
Speaker 3: How to set up your risk profile for your age
Speaker 3: and your goals and what that might look like, and
Speaker 3: most importantly, why even like one percent returns can mean
Speaker 3: thirty five percent more money in retirement, because I think
Speaker 3: so many of us are like, what's the point, Like,
Speaker 3: even if I change it and go on this, you know,
Speaker 3: bloody Victoria's your super tool that she keeps harping on about,
Speaker 3: I'll get one percent more. I can't be bothered. But
Speaker 3: like one percent until retirement is thirty five percent more
Speaker 3: in your superannuation, girl, that's more than a third more,
Speaker 3: like literally not giving another dollar up. Yeah, you just
Speaker 3: have to change some boxes and tick something like, sorry,
Speaker 3: do it? Just sorry, sorry, I'm not putting up with that.
Speaker 2: That is so fair and really makes sense. Just set
Speaker 2: some time aside, and I promise in thirty five years
Speaker 2: you'll thank yourself.
Speaker 3: Yes, but you will still.
Speaker 2: Thank yourself, Yes you will exactly.
Speaker 3: So we kind of just recapped what I think is
Speaker 3: the starting point, and then you cut me off and said, VI,
Speaker 3: I just think that's enough for today. Let's wrap it,
Speaker 3: because I think you're being a little bit overwhelming, And
Speaker 3: I was like always I would never. If you haven't
Speaker 3: listened yet, please hit pause, go back and check it
Speaker 3: out with linked in the show notes as well. I
Speaker 3: have tried to make it as easy as possible source.
Speaker 2: So I have obviously listened to part one because I
Speaker 2: was here. You actually created it with me. I created
Speaker 2: it with you, and I know my balance. I'm happy
Speaker 2: with my fund. I have like my portfolio set to
Speaker 2: the right risk profile, growth option, all that kind of stuff,
Speaker 2: and it does. It does Again. If this doesn't make
Speaker 2: sense to you, go back and keep one. What should
Speaker 2: I be doing next?
Speaker 3: All right, So the next step is contributions. So we're
Speaker 3: going to talk about the money that goes into your
Speaker 3: account because your employers twelve percent is honestly a fantastic foundation.
Speaker 3: But if you want to put future you in the
Speaker 3: best possible position, you might be considering adding some more.
Speaker 3: You might be adding even a small amount to make
Speaker 3: sure that this is a game changing solution for you.
Speaker 3: Do you need to do this? I just want to
Speaker 3: preface no, because for some of us, we might go, Wow,
Speaker 3: like I've actually worked from fourteen years nine months had
Speaker 3: this whole twelve percent the entire time, Like everything is
Speaker 3: smooth saling, Like my projections are looking really good. V
Speaker 3: This like small amount that I could be adding to
Speaker 3: my super would be more powerful elsewhere.
Speaker 2: Because I have said before.
Speaker 3: And this is just me going off on a side tangent,
Speaker 3: I personally and this is personal. It is not financial advice.
Speaker 3: I do not contribute more to my superannuation than I
Speaker 3: have to, so like when I started my businesses, again,
Speaker 3: complete side note, but I think everyone's pervy, like you
Speaker 3: want to know about my money? Right, I started my
Speaker 3: businesses and I didn't take my own advice because I
Speaker 3: couldn't afford to take my own advice.
Speaker 2: So did I believe that I should be paying myself super? Yes?
Speaker 2: Did I have any cash?
Speaker 4: No?
Speaker 3: No, I actually chose to hire Jesse Ricci instead of
Speaker 3: paying myself a full wage. I think I was paying
Speaker 3: myself thirty eight thousand dollars because I'd done my numbers
Speaker 3: and worked out that's how much I needed to contribute
Speaker 3: to rent and bills and like that would keep food
Speaker 3: on the table and the lights on, and you know,
Speaker 3: I could build my business. But I had no superannuation
Speaker 3: contributions either, but I kept track of it and I've
Speaker 3: since paid that back to myself. But I don't go
Speaker 3: above and beyond that, so I'm quote on track for
Speaker 3: my aid, but not for what you would probably look
Speaker 3: at my financial situation. I think a lot of you
Speaker 3: would be like I thought V would have a really
Speaker 3: stacked super No. And that's because I've looked at all
Speaker 3: of this and been like, great, this is a fantastic foundation.
Speaker 3: But I also want access to money outside super because,
Speaker 3: as you know, once it goes in, it doesn't come
Speaker 3: out until you are at preservation age, and that's over
Speaker 3: the age of sixty five. And for me, I want
Speaker 3: an investment portfolio that I can retire at fifty with.
Speaker 3: So that's where all my cash is going back. Cool,
Speaker 3: So like, am I investing Hell? Yes, but am I
Speaker 3: investing more in my super No? Do you know what?
Speaker 3: As I get older, I think I might do a
Speaker 3: bit more. I'm about to purchase a new house with
Speaker 3: my husband, hopefully fingers crossed, and once we work out
Speaker 3: the financials of that, so like you know what our
Speaker 3: actual purchase price is, what our mortgage repayments will be,
Speaker 3: I think I might consider it just to top it
Speaker 3: up early, because the earlier you do it, the less
Speaker 3: contributions you need to make for the long term. Sure,
Speaker 3: like I might add another one hundred dollars a month
Speaker 3: or something. Sure, but that's actually the same as somebody
Speaker 3: ten years from now adding five hundred dollars a month. Yeah, gotcha.
Speaker 3: So like, I'm just gonna make sure the maths works
Speaker 3: and I actually have some free cash flow that I
Speaker 3: can know realocate, but right now feels weird because I'm
Speaker 3: like in this financial limbo of not knowing what our
Speaker 3: mortgage or payments are going to be and like moving,
Speaker 3: you know what I mean. It's a bit, it's a bit,
Speaker 3: you know, Iffy. Anyway, that was a side note because
Speaker 3: I think that people are pervy, and I also just
Speaker 3: want to say if you can't contribute extra, great, that's fantastic.
Speaker 3: But you're listening to this episode and you're not gonna
Speaker 3: bloody turn it off because I want you to know
Speaker 3: what that means. So if you get to that financial position,
Speaker 3: you already got the knowledge, you already got the education.
Speaker 2: God, she's good, right.
Speaker 3: So one of my reasons for loving extra contributions into
Speaker 3: superannuation save money on tax. You guys have all just
Speaker 3: done your tax returns. I know you have because you
Speaker 3: wanted your cash back. You all want tax savings, and
Speaker 3: you don't care about super sit down, My god, so true, Beck,
Speaker 3: How quickly did you file your tax return to get
Speaker 3: your tax back?
Speaker 2: Literally July one?
Speaker 3: So why don't you care about the sexiest tax environment
Speaker 3: in the country. Yes, literally, salary sacrifice before tax contributions
Speaker 3: are taxed at only fifteen percent instead of your full
Speaker 3: marginal tax rate.
Speaker 1: Yes.
Speaker 3: So, for example, if you had a ninety thousand dollar income,
Speaker 3: your marginal tax rate is thirty percent plus you would
Speaker 3: be paying a Medicare levey. I just feel like I
Speaker 3: need to add extra context of like two percent. So
Speaker 3: every one thousand dollars that you sacrifice into your superannuation
Speaker 3: only gets hit with one hundred and fifty dollars worth
Speaker 3: of tax instead of three hundred and twenty dollars of tax.
Speaker 3: So your money's working hard a few instant return I see,
Speaker 3: because you're taking app before you get your pay slips.
Speaker 3: You've got your payslip and it was in your bank
Speaker 3: account and you put it in your Supercome tax time,
Speaker 3: you'd get that fifteen percent back from the tax man.
Speaker 2: Yeah, so you'd get a better tax return. Oh great.
Speaker 3: So it's like either an no hour or later. Yeah,
Speaker 3: so you will get it back either way. So if
Speaker 3: you're doing it before tax, like you went to your
Speaker 3: employer and said, you, vickid, I want to contribute more
Speaker 3: to my super and I go, great, no worries how much?
Speaker 2: And you say one thousand dollars.
Speaker 3: You'd only be taxed one hundred and fifty dollars on that, yes,
Speaker 3: And I would work all of that out for you
Speaker 3: come out in the wash. But if you were like, oh,
Speaker 3: I don't really know, I might need that cash for
Speaker 3: now for later, and then you're trying to make a
Speaker 3: decision on some money inside your bank account and you're like,
Speaker 3: actually I want to put it in my super, you
Speaker 3: would have already paid three hundred and twenty dollars on tax. Yeah,
Speaker 3: but come tax time you would have put your hand
Speaker 3: up and said, hey, tax man, I actually popped some
Speaker 3: money in my souper this year, and they would give
Speaker 3: you the difference back.
Speaker 2: Oh my god.
Speaker 1: Yeah.
Speaker 2: So you're not going to miss out regardless of where
Speaker 2: it goes.
Speaker 3: Cool.
Speaker 2: So I just want to quickly sum it up in
Speaker 2: case it sounds busy, because I think in my brain
Speaker 2: it is.
Speaker 3: A very little bit at making it complex. Yes, that's okay.
Speaker 3: I think you've done a very good job explaining it.
Speaker 3: But for salary sacrificing, I believe this is the term.
Speaker 3: If you say, like it paid four thousand dollars every
Speaker 3: month after tax, then instead you put a salary sacrifice,
Speaker 3: like a little bit of money towards SUPER before that
Speaker 3: money lands in your bank acount before the tax is
Speaker 3: kind of like added to that pace lit.
Speaker 2: Yes, that's tax to fifteen percent. Yeah, and then after
Speaker 2: I let's say you're like I don't want to do that.
Speaker 2: You wait for your money to land your bank account
Speaker 2: that's after tax, and then you can put money in
Speaker 2: your super yourself that can come back.
Speaker 3: To your attack. So you're you're going to yes the
Speaker 3: tax savings one way or another. It just depends which way.
Speaker 2: It just depends.
Speaker 3: And like, not all of us are in positions where
Speaker 3: we can call up our employer and make consistent contributions.
Speaker 2: But you might have gotten like some cash on the side.
Speaker 3: Like a lot of our community recently have been talking
Speaker 3: about superannuation and some of them are like, oh, well,
Speaker 3: I got in inheritance or you know something like that.
Speaker 3: I came into a lump sum of money and I
Speaker 3: want to put a little bit into my super because
Speaker 3: obviously I want to boost myself up. At that point
Speaker 3: you would.
Speaker 2: Get tax back.
Speaker 3: So I think it's important to just know that it's okay.
Speaker 3: It'll come out in the wash, but you know, you
Speaker 3: don't get to see it until tax time and you
Speaker 3: actually do your tax and you see it on paper,
Speaker 3: and then you know it hits your account. But also,
Speaker 3: the other thing I want to talk about here is
Speaker 3: government boosts. So the government does a lot to try
Speaker 3: and incentivize us to get more money into superannuation. Personally,
Speaker 3: I don't think they do the best job ever at
Speaker 3: articulating that because most of us don't know about it.
Speaker 2: It's going to say they do everything they can accept
Speaker 2: for educators and let us know that this is a
Speaker 2: the Yeah.
Speaker 3: So that's why I go and read the ATOS website
Speaker 3: and then I call you out and I'm like, beg,
Speaker 3: this is so sexy.
Speaker 1: Yeah.
Speaker 3: Don't read it on the Idea website though, because as
Speaker 3: much as it makes sense, because their website's great, it's
Speaker 3: just not the most esthetic website.
Speaker 2: Yes, but if you're a LISTO, so that is.
Speaker 3: A low income super tax offset person, so it means
Speaker 3: that you earn less than thirty seven thousand dollars per year.
Speaker 3: You can get refunds up to five hundred dollars of
Speaker 3: the fifteen percent contributions tax on concessional contributions paid by
Speaker 3: you or your employee.
Speaker 2: I see you get five hundred bucks, you have five
Speaker 2: a bars. You can get up to five hundred up
Speaker 2: to okay, And the concessional is what I'm hearing a lot,
Speaker 2: and I actually don't know the difference, like non concessional
Speaker 2: and concessional contributions. What does that mean?
Speaker 3: Concession cards? So you know how you get your concession card?
Speaker 4: Yep.
Speaker 3: What do you get when you get a concession card? Discount? Discount?
Speaker 3: So concession is a discount, non concession, non discount. Ah,
Speaker 3: so just say it like that, just like anyway, we'll
Speaker 3: move on. If you earn forty seven, four hundred and
Speaker 3: eighty eight dollars or less and put in at least
Speaker 3: one thousand dollars after tax, the government will chip in
Speaker 3: a co contribution for you of five hundred dollars. Oh okay,
Speaker 3: So that's a good deal. That co contribution gradually reduces.
Speaker 3: If you're income is between forty seven thousand, four hundred
Speaker 3: and eighty eight dollars and sixty two thousand, four hundred
Speaker 3: and eighty eight dollars. Why is it that number? I
Speaker 3: don't know. I don't make the rules. I just report
Speaker 3: on them. And then if your partner or your spouse
Speaker 3: earns thirty seven thousand dollars or less, you can actually
Speaker 3: go and make a contribution to their supranuation account and
Speaker 3: claim a spouse contribution tax offset of up to five
Speaker 3: hundred and forty dollars, which I think a lot of
Speaker 3: you are like, that doesn't actually add that much, but go,
Speaker 3: It's five hundred and forty dollars of like literal free
Speaker 3: money by doing something for future you.
Speaker 4: Yeah.
Speaker 3: Sorry, it's been a weak a good deal, and I
Speaker 3: mean a lot of you especially, And I like, I
Speaker 3: look at it and I go, what the hell, like,
Speaker 3: do you know what? Personally, I don't know anyone who
Speaker 3: currently earns thirty seven thousand dollars and has some extra
Speaker 3: cash to contribute to superannuation totally. Let's just keep it
Speaker 3: real as well. But this does work often if you're
Speaker 3: on maternity leaf or if you are taking leave, you
Speaker 3: aren't working full time, and your partner is a higher
Speaker 3: income earner, that is a really good strategy to just
Speaker 3: like boost your super a little bit money in right, Yeah, absolutely,
Speaker 3: So it's I guess.
Speaker 2: Like what I want to do. Is it really worth
Speaker 2: putting more into super on top of what my employer
Speaker 2: is already paying. I guess it kind of depends on
Speaker 2: your personal situation. And I gave you the context that
Speaker 2: I haven't done it.
Speaker 3: Yes, And I think that that's a really important piece
Speaker 3: of context because I can't tell you whether it's worth
Speaker 3: it or not on paper one hundred percent. Yeah, Like
Speaker 3: if we do the maths, the maths maths. Yeah, And
Speaker 3: the thing I want everyone to know is it doesn't
Speaker 3: actually have to be hundreds of dollars a week to
Speaker 3: make any type of difference. We see it in our
Speaker 3: community all the time. So, like I had a girl
Speaker 3: message me and she's like, Victoria, I you know, I
Speaker 3: want to share this with you. But I have been
Speaker 3: putting ten dollars a week extra into my stuperannuation since
Speaker 3: I got my first job because my dad told me to.
Speaker 3: Oh my god, I don't know why, but like that's
Speaker 3: just what I've always done, and like I've boosted it up.
Speaker 3: I'm now making one hundred dollars a week as an
Speaker 3: additional contribution because it's like just crept up and she
Speaker 3: hasn't noticed it, and she has like one hundred and
Speaker 3: fifty thousand dollars in Super now wow, and she's like
Speaker 3: twenty six. That's amazing, right, Like, just from little things,
Speaker 3: big things grow, and the power of compounding means even small,
Speaker 3: regular contributions can change your retirement balance by literally hundreds
Speaker 3: of thousands of dollars. Like and honestly, the sooner you
Speaker 3: start contributing, the longer and better the impact. Right, because
Speaker 3: if we look at the rule of seventy two, which
Speaker 3: we might do a whole podcast on, but it's basically
Speaker 3: that money doubles every seven to ten years. Let's take
Speaker 3: our twenty five year old friend, yeah, thirty five. If
Speaker 3: she didn't make an additional contribution to her super three
Speaker 3: hundred grand forty five, six hundred grand at the age
Speaker 3: of forty five, she already has more superannuation than most
Speaker 3: women in Australia retire with.
Speaker 2: Oh my god, and.
Speaker 3: That's a forty five, yeah, fifty five, one point two
Speaker 3: million dollars back.
Speaker 2: That's insane.
Speaker 3: Let's stop it, and she's going to keep contributing, so like,
Speaker 3: don't get me wrong, we don't all have one hundred
Speaker 3: and fifty thousand dollars. But like if you're just like, okay, cool,
Speaker 3: well I can't do much, but this is what I
Speaker 3: can do.
Speaker 2: Yeah, pop off? Yeah, do you know what I mean?
Speaker 3: Like, it's just let's do what we can do, and
Speaker 3: if we can't do anything, let's also not shame ourselves
Speaker 3: because we're doing the best that we can.
Speaker 2: Yeap so true?
Speaker 3: So yes, I think it is, and I've got another.
Speaker 3: I wrote down another example for you using I think
Speaker 3: some more numbers, because you know, our community member is
Speaker 3: a good example, but I don't know her tax right,
Speaker 3: So let's just use the medium balance from our community.
Speaker 3: So as you guys know, we always ask you questions
Speaker 3: because you're our listeners. Relying on ATO and asset data
Speaker 3: can be good, but I don't think it's reflective of
Speaker 3: people who care about their money as much as the
Speaker 3: average Australian. So our averages are a little bit higher
Speaker 3: because you guys are actual bosses and I love it.
Speaker 3: But the medium balance from our community for twenty nine
Speaker 3: to thirty two year olds is about eighty eight thousand,
Speaker 3: five hundred dollars. Well, I'm also going to use the
Speaker 3: median Australian wage, which is about eighty eight thousand, four
Speaker 3: hundred dollars a year. That way, it's not I don't know,
Speaker 3: some made up number. It's where a lot of people
Speaker 3: and our audience are actually sitting right now, like that's
Speaker 3: just what happens. So, if you're just stuck with your
Speaker 3: employer's twelve percent contributions that they have to pay you,
Speaker 3: by the time you retire at the age of sixty seven,
Speaker 3: which is our preservation age, you'd have around two million,
Speaker 3: four hundred and twenty three thousand, nine hundred and thirty
Speaker 3: three dollars in superannuation. WHOA, and that is assuming a
Speaker 3: rate of return of six point five percent. Oh so
Speaker 3: it could be more, which I think is not a
Speaker 3: great return. Do you know what, That's a great return
Speaker 3: if you are in a balanced fund.
Speaker 2: Yeah, but most of us don't.
Speaker 3: We're not. Those's not that's not my journey. It might
Speaker 3: not be your journey, and it could be your journey,
Speaker 3: and that's okay. I just I mean, I would be
Speaker 3: disappointed if my super was only returning six point five percent,
Speaker 3: But that's the deal, right, I still want to retire
Speaker 3: with about two point four mil. But if you had
Speaker 3: some extra cash back, Let's say that you had twenty
Speaker 3: five dollars a week extra instead of two point four million,
Speaker 3: you'd end up with two million, six hundred and nine thousand,
Speaker 3: five hundred and five dollars, which is about one hundred
Speaker 3: and eighty five thousand, five hundred and seventy three dollars
Speaker 3: more at the time of retirement, even though you only
Speaker 3: contributed about forty eight thousand dollars extra your entire working life.
Speaker 1: Yeah.
Speaker 2: Wow, okay, okay, okay.
Speaker 3: That's like one hundred and forty thousand dollars worth of
Speaker 3: free money. That is nearly a four times return on
Speaker 3: the contribution you made thanks to compounding and the amount
Speaker 3: of time in the market. Yeah yeah, yeah, just because
Speaker 3: you made a good investment and you like you know,
Speaker 3: whent and bought bitcoin and you got the best return ever. Sorry,
Speaker 3: that's with a six point five percent return. Yeah. The
Speaker 3: average rate of return of the Australian market is about
Speaker 3: nine point eight percent at this point in time. So
Speaker 3: like we're just being real conservative totally. And I prefer
Speaker 3: to be conservative because I'd prefer to underpromise over deliver. Yeah,
Speaker 3: but I'm telling you, right, now, if you do this
Speaker 3: and you retire and you're sixty seven, you have to
Speaker 3: call me up and be like, Va, oh you are coffee.
Speaker 2: Can I ask you something that's probably it's not personal advice.
Speaker 3: I think I just want I think it's an ask
Speaker 3: personal advice, so I'll deflect it.
Speaker 2: Thank you so very well. I think I just want
Speaker 2: peace of mind because I and this might shock you,
Speaker 2: but I'm thirty three years old and that part won't
Speaker 2: shock you, the fact that I'm thirty three actually, but
Speaker 2: because I look probably older. But I have, like I
Speaker 2: think I have seventeen thousand dollars in my super. Okay,
Speaker 2: do you feel like there's there's if I started right now,
Speaker 2: there's chance of me to be one hundred percent. Why
Speaker 2: would that not?
Speaker 3: That's very company like, Sorry, that's gonna happen for you anyway. Okay,
Speaker 3: So I'm quite aggressive when it comes to being your friend.
Speaker 3: I made you get an investment portfolio, and the next
Speaker 3: step was to cost you on your superannuation. Yes, yes, perfect, okay,
Speaker 3: co Well, just small contributions, because think about it, if
Speaker 3: we look at your super, you are behind yep. Is
Speaker 3: that the worst thing in the world. No, you're thirty three. Sorry,
Speaker 3: we've got thirty plus years before you retire. I've got
Speaker 3: all the time in the world. I also know that
Speaker 3: taking you as an individual, and this is not meant
Speaker 3: to be offensive, Taking you as an individual one of
Speaker 3: the best things. And again this isn't personal advice. This
Speaker 3: is just an example. One of the best things I
Speaker 3: can do is automate that for you. Yeah, because I
Speaker 3: know that if you came to me and said, Victoria,
Speaker 3: how do I do it? I want to contribute twenty
Speaker 3: five dollars extra to my super every single week. I go,
Speaker 3: that's a great idea, Beck. I'm glad that you had
Speaker 3: that and came up with that idea.
Speaker 2: All of them your own.
Speaker 3: It wasn't financial advice. So you came up with that
Speaker 3: idea and you came to me, I could say, well,
Speaker 3: you know, it's really easy. All you do is transfer
Speaker 3: every single week twenty five dollars.
Speaker 2: Yeah, are you going to do that? Probably not an
Speaker 2: my own? No, no, no, And that's okay.
Speaker 3: So we go, what's the best strategy for Beck at
Speaker 3: this point and for you personally? Knowing you well enough,
Speaker 3: I think out of sight, out of mind is the
Speaker 3: best strategy. So what we're going to do is talk
Speaker 3: to your employer and say, hey, employer, you've got all
Speaker 3: my superanuation details. You're going to email your HR and say,
Speaker 3: I would like to contribute an additional twenty five dollars
Speaker 3: a week or one hundred dollars a month to my superanuation.
Speaker 3: Can you please set that up so that every single month,
Speaker 3: before my pay comes into my account, it comes out beforehand,
Speaker 3: totally make sure I have no But I love and
Speaker 3: know you very well. I know you would give me
Speaker 3: a month and you already would have forgot that you
Speaker 3: set that up. But it's ticking away in the background,
Speaker 3: and twenty five dollars per week after tax like into
Speaker 3: your account. Honestly, I don't think personally you would notice
Speaker 3: it because I know your money type, because I know
Speaker 3: your spending type. It's not that you don't earn a
Speaker 3: good income, it's just if it's in your account, you
Speaker 3: offend it. So I'm just not going to let it
Speaker 3: hit your account. Yeah yeah, yeah, right, like I just
Speaker 3: took it off you already.
Speaker 2: Oh my god, thank you. V.
Speaker 3: So I think you just need to talk to yourself
Speaker 3: about what strategy is going to work here, Okay, because
Speaker 3: there are some people that are incredibly empowered by going
Speaker 3: in every single week and updating their spreadsheet and making
Speaker 3: these manual transfers and pop off queens. That could never
Speaker 3: be my ADHD journey. I wouldn't do to.
Speaker 1: I love it.
Speaker 3: I love the idea that I would update my spreadsheet
Speaker 3: every week. Yeah I don't. I just go back maybe
Speaker 3: once a month, and then update it quote on a
Speaker 3: weekly basis, so that I've got all the information. Yet
Speaker 3: it takes me a lot longer because I did it
Speaker 3: every month instead of every week, because I always let
Speaker 3: that stuff lapse. Of course, you just have to know
Speaker 3: yourself well enough to be honest with yourself.
Speaker 2: So are you behind?
Speaker 3: Yes?
Speaker 2: Does that matter?
Speaker 3: Absolutely not.
Speaker 2: That's cool.
Speaker 3: That is so comfidible. I don't care that you're behind.
Speaker 3: I care that you're sitting in this chair. I care
Speaker 3: that you're listening to this podcast yourself in the best
Speaker 3: possible position. And you know what, there are lots of
Speaker 3: people that are thirty three that don't even have seventeen
Speaker 3: thousand dollars in their super Yeah.
Speaker 2: So sorry, you're starting from somewhere exactly, and it's never
Speaker 2: too late to start if you start right now. Today
Speaker 2: I saw this lame.
Speaker 3: I don't know if it's lame. It's lame that I'm
Speaker 3: sharing it, but it wasn't a lame quote. The other
Speaker 3: day someone said, you're not starting again, You're just starting
Speaker 3: from here. Yeah, And I think that that's so much
Speaker 3: nicer than expecting that, Oh, Beck, start again, like wipe
Speaker 3: your slate clean. Yeah, and I'm just starting here. Yes, good,
Speaker 3: I just start from here.
Speaker 2: Oh my god, there's a way better way to look
Speaker 2: at it. So sorry. I hope that that helped.
Speaker 3: But we just had to know ourselves and our strategy
Speaker 3: and what would work best for us. And the only
Speaker 3: reason I know the answer to yours is because I
Speaker 3: know you so well. Yes, that other people might resonate
Speaker 3: with that and go, oh my god, like that's so
Speaker 3: me as well. Yeah, like if it was in my account,
Speaker 3: bloody spend it. But if you took it off me. Also,
Speaker 3: what's the harm in trying? What if we did that
Speaker 3: strategy for you, Beck, because that's what you personally decided,
Speaker 3: and then you're like, well, I'm actually short of cash
Speaker 3: every single month. Yeah, so let's email HR and turn
Speaker 3: it off totally.
Speaker 2: And then that money hasn't gone to waste. It's just practiced.
Speaker 2: We just tried it exactly.
Speaker 3: Okay.
Speaker 2: I really like that, Thank you, V. So tell me
Speaker 2: more about the options and like the portfolios and things
Speaker 2: like that.
Speaker 3: So like, I have not always been good at money,
Speaker 3: which I hope everybody knows. Like I wasn't born a
Speaker 3: financial advisor. I was born a finance girl, but didn't
Speaker 3: want to identify as a finance girl. I should have
Speaker 3: known from the start. My dad's an accountant. I'm born
Speaker 3: on the thirtieth of June. Like I was in athletics.
Speaker 2: That's so cute.
Speaker 3: I just I was real cool at school anyway. I
Speaker 3: just had my head in the sand about all of
Speaker 3: that because the school system that I grew up in
Speaker 3: didn't teach us about superannuation, So how else was I
Speaker 3: supposed to know? And I personally was using a balance
Speaker 3: to portfolio for a very long time because it was
Speaker 3: just when I filled in my superforms at my first
Speaker 3: ice cream shop job. That's just what I ticked because
Speaker 3: it said it was the most common, right, So I
Speaker 3: was like, yeah, all right, And I used a balance
Speaker 3: to portfolio in that first example because that's where most
Speaker 3: people default too. But I also have an example of
Speaker 3: what happens if you took that exact same person and
Speaker 3: she was going to retire with one hundred and eighty
Speaker 3: five ish thousand dollars more anyway, and switched to a
Speaker 3: growth option. Because remember before I was like, oh, I
Speaker 3: don't know if I would accept six point five. You
Speaker 3: might and that's fine, but I'm just opinionated and I'm
Speaker 3: just a growth girlye right. Remember, we are only doing
Speaker 3: employer contributions. The balance option landed at them having about
Speaker 3: two point four mil in retirement. But if they'd chosen
Speaker 3: the growth option from age let's call it thirty beck. Yeah,
Speaker 3: because we're not all starting at the age of eighteen,
Speaker 3: and I think that we need to get rid of
Speaker 3: examples like that because most of our listeners are not eighteen. Yes,
Speaker 3: it's gone through our late teens, and then we went
Speaker 3: through our early twenties and then maybe we've decided we
Speaker 3: need to get our shit together because thirty is real close.
Speaker 3: So let's use that as an example. Same salary, no
Speaker 3: extra money going in, Yes, so their balance could be
Speaker 3: four point eight nine million dollars. Wow, that's yeah, that's
Speaker 3: more than double and double. Yeah, it's more than double
Speaker 3: the outcome just from going in and changing her risk setting,
Speaker 3: not from putting in a single dollar.
Speaker 2: That's crazy, and that would have taken like if you
Speaker 2: remember your password and all your log in details that
Speaker 2: which you can reset your password. It's really annoying. Yeah,
Speaker 2: but that would take thirty seconds.
Speaker 3: Yeah, And we're not saying go in and change No,
Speaker 3: we're saying, go and do your risk profile and like
Speaker 3: make sure that that suits you. And then if it
Speaker 3: does suit you and you find that you are a
Speaker 3: growth investor, well why the hell you imbalanced? Totally you're
Speaker 3: in the wrong room, babe.
Speaker 2: You're in the wrong room. You walked into the wrong
Speaker 2: class at school, exactly. You got to get up and
Speaker 2: get out.
Speaker 3: Otherwise you're not learning what you need to learn, and
Speaker 3: you're not accessing what you need to access.
Speaker 2: And it's cost to yeah.
Speaker 3: Yeah, And so that just shows how small choices can
Speaker 3: make massive impact over decades. Like none of this and
Speaker 3: I'm really sorry. In twenty twenty five, we are all
Speaker 3: instant gratification girlies. This is long term gratification, and that's okay,
Speaker 3: But you don't have to suddenly throw thousands of dollars
Speaker 3: into souper. Sometimes it's just about checking that you're in
Speaker 3: the right investment option and making like one tiny tweak
Speaker 3: and then saying say good night and then wake up
Speaker 3: thirty years later in WHOA.
Speaker 2: That's so true, right, I have to know what if
Speaker 2: the growth option added twenty five.
Speaker 3: Dollars week, so you're like making extra contributions in addition, yes,
Speaker 3: in addition, So like, let's do the same example. We
Speaker 3: already know that that person, if they're inside the growth option,
Speaker 3: are at the age of sixty seven.
Speaker 2: Our preservation age crazy word, Yes.
Speaker 3: But I'm trying to like drill it into you so
Speaker 3: that you understand it, because that's how the government communicates
Speaker 3: with us. Yes, so they talk about your preservation age,
Speaker 3: and if they are talking about that, that's the age
Speaker 3: at which you're able to access every single dollar in
Speaker 3: your superannuation tax free. Yes, ma'am preservation. That's great because
Speaker 3: I'm so old I need to be preserved exactly. So
Speaker 3: they would retire at the age of sixty seven with
Speaker 3: four point eight nine million dollars, yes, right, so then
Speaker 3: that's just base contributions. Then they're like, I really want
Speaker 3: to add twenty five dollars extra because I heard the
Speaker 3: example Beck and v were talking about, Yeah, that balance
Speaker 3: actually grows to five point two to two million dollars. Okay,
Speaker 3: so that's an extra three hundred and thirty thousand dollars.
Speaker 3: But for the same contribution she made when she didn't
Speaker 3: have a high growth portfolio, she had balanced to forty
Speaker 3: eight thousand dollars. Yeah, so over that time, you can
Speaker 3: make a decision, right, So do you want to save
Speaker 3: your money or do you want to invest your money back?
Speaker 3: If you save your money, you'll end up with forty
Speaker 3: eight thousand dollars. If you invest your money over the
Speaker 3: same period of time, three hundred and thirty thousand dollars.
Speaker 2: Which one would you like to take home?
Speaker 3: Well, that's a hard one.
Speaker 2: Yeah, we can't give you advice, but like, you make
Speaker 2: a decision for you, right. That's crazy.
Speaker 3: Just to put that into perspective, the person who stayed
Speaker 3: in that balanced option with no extras, so still in balance, yeap,
Speaker 3: would have about two point four to two million.
Speaker 2: Dollars, which ain't anything to sneeze at.
Speaker 3: And then the person who switched to growth and then
Speaker 3: was like, oh, I really want to do an extra
Speaker 3: twenty five dollars a week Like that wouldn't you know,
Speaker 3: blow my budget out. Yeah, they retire with five point
Speaker 3: two two million dollars. That's like a difference of two
Speaker 3: point eight million dollars for the same starting balance, the
Speaker 3: same salary, only twenty five dollars a week extra. So
Speaker 3: remember those ads, you remember the hest ads like but
Speaker 3: do this and stand at the escalators and ones going
Speaker 3: up the escalator and the others on the broken escalator. Yes,
Speaker 3: that's what we're thinking. I see. Oh my god.
Speaker 2: Okay, So it's a lot of numbers. It's a lot
Speaker 2: of numbers.
Speaker 3: But what I want you to take from this is
Speaker 3: if you take action and you put yourself in the
Speaker 3: right possible position, there's a lot more numbers in your
Speaker 3: bank account. Yes, I see.
Speaker 2: Okay, So I think this was a good time to
Speaker 2: let our brains kind of have a little rest. Let's
Speaker 2: take a second to process it, take a really quick break.
Speaker 3: Oh and a little sub note from me, because my
Speaker 3: financial advisor, or my ex financial advisor hat goes on.
Speaker 3: I also need to say past performance is not a
Speaker 3: reliable predictor of future performance, which has been drilled into
Speaker 3: me time and time again, really legally, because if we're
Speaker 3: going to start talking about you know, performance and returns
Speaker 3: and consistent returns like go, go, look at the Vanguard
Speaker 3: index chart. We know that people who invest consistently over
Speaker 3: a thirty plus year period of time do not lose
Speaker 3: money in the market. But we also can't predict what's
Speaker 3: going to happen into the future. So I don't want
Speaker 3: you being like, wow, I listened to this podcast and
Speaker 3: it's an absolute guarantee, Like I just have to put
Speaker 3: my financial advisor hat on it, and I'm going to
Speaker 3: take it off because we're going to talk about some
Speaker 3: like fun stuff after it go to a break, and
Speaker 3: on the flip side, we'll dive back in and I'll
Speaker 3: be less formal. Right before the break, I threw a
Speaker 3: lot of numbers and a big disclaimer at you. But
Speaker 3: the key takeaway, my friend, is that tiny contributions plus
Speaker 3: the right risk option can literally add millions to your
Speaker 3: supranuation balance. That's crazy. I want to be rich. I
Speaker 3: don't know about you. That sounds like a terrible thing
Speaker 3: to say sometimes, but like, do you want to be
Speaker 3: rich too? Yeah? I think i'd like that. Yeah, I
Speaker 3: think it'd be good. Like imagine not thinking before you
Speaker 3: tap your cart.
Speaker 2: Oh my god, the amount of times I have to
Speaker 2: I always transfer myself first, I'm like, where am I
Speaker 2: going to take.
Speaker 4: It out of?
Speaker 1: Now?
Speaker 2: It's like to be financially comfortable.
Speaker 3: But also sorry, now we've got these options and Beck,
Speaker 3: you're only thirty three, Like we can actually plan to
Speaker 3: be rich. Yeah yeah, sorry, it's actually not beyond you
Speaker 3: to just get rich af Yeah, so like let me
Speaker 3: help you do that? Oh my god, because like then
Speaker 3: you could be your own sugar mamma. That's a good deal, right,
Speaker 3: thank you. Also, I want to remind you that the
Speaker 3: free tool we spoke about in that first episode, it's
Speaker 3: called how much super do I really Need? That is
Speaker 3: a very very cool tool that we're going to revisit.
Speaker 3: Right So, in the Government's Money Smart super Calculator, there's
Speaker 3: like a little section where you can actually play around
Speaker 3: with adding different contribution amounts and it will actually calculate
Speaker 3: the difference it will make to your superbalance over the
Speaker 3: long term. Because you might go, well, V, I can't
Speaker 3: afford an extra twenty five bucks a week, and I go, yeah,
Speaker 3: like I get it, I really do. I'm just giving
Speaker 3: you examples and want you to be excited about maybe
Speaker 3: doing this and you go, well, I could do five bucks. Great, Great,
Speaker 3: that's somewhere to start, because then maybe a couple of
Speaker 3: months later, you've got a little bit extra wiggle room
Speaker 3: and at seven dollars, like, we're not talking that you
Speaker 3: have to make these big, grand commitments. I mean you
Speaker 3: might turn around and be like, fire out. My partner
Speaker 3: and I we're double income, no kids. Why aren't we
Speaker 3: doing this while we're in a more luxurious position? Yeah,
Speaker 3: good question. Yeah, but if you are hamstrng goal like
Speaker 3: gets it? Yeah? I just I feel like I just
Speaker 3: don't want anyone to listen to our content back and
Speaker 3: be like, wow, that wasn't for me. Yeah, totally. Like
Speaker 3: even if you don't have extra cash, have you not
Speaker 3: got the education? Now? Like if your friend's like, oh
Speaker 3: my god, I've started saving extra twenty five bucks at
Speaker 3: your new friend Olivia's Bark or Jernie's Queer Bar, which
Speaker 3: we're very excited about. But it's got beautiful branding.
Speaker 2: Who did that? Oh well, I could say a little
Speaker 2: non paid graphic design named ex head.
Speaker 3: I think you might get a few drinks out of
Speaker 3: that though, Yeah, a couple of little cheeky soda waters
Speaker 3: where she could do. But if you're at Bernie's Bar
Speaker 3: and your friend is like, oh, I've got like some
Speaker 3: stuff I've started to save, I can almost guarantee you'll
Speaker 3: be like, so have you thought about Super?
Speaker 2: Or so have you been investing?
Speaker 3: Like these conversations are going to happen and we benefit
Speaker 3: the whole community totally.
Speaker 2: You don't even have to be doing it yourself.
Speaker 3: It might not benefit you right now because we just
Speaker 3: don't have the cash and we're relying on the free
Speaker 3: soda waters.
Speaker 2: Absolutely in the future, it will. A penny saved is
Speaker 2: a penny. And they say, exactly are the rules on
Speaker 2: how much you can add to your superreachier? Is there
Speaker 2: a cap or a minimum?
Speaker 3: Good question back, because there are government caps on literally
Speaker 3: how much you can put into Super and it changed.
Speaker 3: You're before tax contributions like the Super guarantee, salary sacrificing
Speaker 3: or anything that you are claiming a deduction for. The
Speaker 3: cap is thirty thousand dollars a year from July twenty
Speaker 3: twenty five. Okay, that's increased, which is kind of sexy.
Speaker 3: This includes your employers twelve percent, So that's where it's
Speaker 3: not like an additional thirty grand which would be nice.
Speaker 2: Unrelatable, but nice.
Speaker 3: So for example, if you're on like a median wage
Speaker 3: of eighty eight thousand, four hundred dollars, that's already about
Speaker 3: ten thousand, six hundred dollars that's going into your SUPER.
Speaker 3: So that then leaves you with nineteen than four hundred
Speaker 3: dollars worth of extra wiggle room if you want a
Speaker 3: salary sacrifice. Okay. There's also a very cool rule which
Speaker 3: you might not care so much about when you're young,
Speaker 3: but as you get a little bit older and maybe
Speaker 3: you haven't been making the most of your caps or
Speaker 3: your life, Oh my god, what do I do? Like,
Speaker 3: you know, I've got all of this cash saved because
Speaker 3: I was being real conservative and I'm just not you know,
Speaker 3: I wasn't ready to put it in Super, but now
Speaker 3: I really want it in Super. There's a really cool
Speaker 3: rule called the carry forward rule. Okay, and if your
Speaker 3: superanuation balance is under five hundred thousand dollars, you can
Speaker 3: actually use easy any of your unused concessional cap space
Speaker 3: from the past five years. Really yep, So if every year, like,
Speaker 3: let's go back to that eighty eight thousand dollar example,
Speaker 3: so your salary's eighty eight grand. You're making about ten
Speaker 3: six hundred dollars of contributions just as you're twelve percent,
Speaker 3: and you've got nineteen thousand left every single year. You
Speaker 3: could do nineteen nineteen nineteen and then bring it all
Speaker 3: forward if you had a heap of savings or you
Speaker 3: got a inheritance or came into a lump sum of
Speaker 3: money and drop it in and still only pay fifteen
Speaker 3: percent taps.
Speaker 2: So good.
Speaker 3: The important thing is when you drop it in, you
Speaker 3: need to let your superanuation know that you will be
Speaker 3: claiming that on tax, and that's a separate form. Yeah, okay,
Speaker 3: miss it, lose it, yep, don't get to claim it.
Speaker 3: And that's bullshit. Yeah yeah, So I'm just calling it
Speaker 3: out if you're like, that's a great thing. I didn't
Speaker 3: realize I could do that, and you just dump it
Speaker 3: in your super and then you do not tell your
Speaker 3: superannuation company that you're planning on claiming that on your
Speaker 3: tax return this year, and then it passes and you
Speaker 3: haven't done your tax. There's not a lot of wiggle room.
Speaker 2: That's so mean. Yeah, yeah, but this is huge.
Speaker 3: So this is huge for people who have had time
Speaker 3: off work or you're only starting to contribute later.
Speaker 2: Like it's like the catch up.
Speaker 3: So you know how you were saying before V I
Speaker 3: only have bloody seventeen thousand dollars in my SuperM I behind. Yeah, well,
Speaker 3: yes you're behind. But hypothetically you can also use your
Speaker 3: unused cap if you wanted to into the future. Yeah,
Speaker 3: so like we can top it up, we can work
Speaker 3: it out if we have access to cash. Absolutely. Now,
Speaker 3: our non concessional contributions these are our after tax moneies
Speaker 3: that you deposit into a super count, and the cap
Speaker 3: for this is one hundred and twenty thousand dollars a year,
Speaker 3: which is a lot of money, unrelatable but like just
Speaker 3: good to know. Or up to three hundred and sixty
Speaker 3: thousand dollars at once. Okay, if you trigger the carry
Speaker 3: forward rule and your balance is below the threshold.
Speaker 2: Before or after or it doesn't matter. What do you mean,
Speaker 2: Like if you put the three hundred sixty thousand dollars
Speaker 2: for example, and then now it's over.
Speaker 3: Yeah, the threshold yep, so you can dump it in
Speaker 3: if your income plus super contribution is over like two
Speaker 3: hundred and fifty thousand dollars, your concessional contributions are actually
Speaker 3: taxed at thirty percent instead of the fifteen. Oh, so
Speaker 3: that's still a better deal. That's still a better deal. So,
Speaker 3: like you're paying close to like forty five percent tax
Speaker 3: at that rate, so you're still getting a discount, but
Speaker 3: it's definitely not that fifteen percent. Sure, So like that
Speaker 3: is probably why it's unrelatable, because like, I don't know
Speaker 3: that many people unless I have worked with like high
Speaker 3: income earners or I've worked with, you know, people who
Speaker 3: have inheritances who are dropping in three hundred and sixty
Speaker 3: thousand at once.
Speaker 2: Yes, but I've seen it, like it happens.
Speaker 3: You're just on a non favorable tax rate, but it's
Speaker 3: still better than the tax rate you'd pay. Totally, it's
Speaker 3: better than to kick in the pants, you know, absolutely. Okay, Well,
Speaker 3: I gotta tell you it's a lot to take in.
Speaker 3: But I do want to move on to this next
Speaker 3: one because we get this question constantly community.
Speaker 2: They always want to know should they be putting extra
Speaker 2: into this super or investing outside of super. I can't
Speaker 2: tell you.
Speaker 3: I can't say I can't tell you, but I think
Speaker 3: that I've given a little bit of context along the way, right, Yeah, great,
Speaker 3: Like I've told you what I do, Yes, And I
Speaker 3: think that might be helpful, especially if you're trying to
Speaker 3: make your own decisions, not because you want to copy me,
Speaker 3: but because it's good to kind of crowdsource. Oh what
Speaker 3: are you doing, Becko? What are you doing?
Speaker 1: Then?
Speaker 3: Like you just find things that you might be comfortable with,
Speaker 3: or you might find things you're like, I'm not comfortable
Speaker 3: with that. Like someone might be listening to this beck
Speaker 3: and being like, holy shared, Victoria. Did you know she
Speaker 3: doesn't take advantage of super in the world that she could, Like.
Speaker 2: That's so dumb.
Speaker 3: That's fine, totally, Like there's actually no right or wrong
Speaker 3: when it comes to what's happening, And it really depends
Speaker 3: on your personal goals and your personal timing. So if
Speaker 3: you need and this is just all general, just like
Speaker 3: what usually happens in financial advice land.
Speaker 2: If you need the money before you're sixty years old, that's.
Speaker 3: When you should look at investing outside of super Yes, Okay,
Speaker 3: if your goal is to purchase your first home. For
Speaker 3: first home buyers, the first Home super Savor scheme let's
Speaker 3: you save up to fifteen thousand dollars a year, or
Speaker 3: a total of fifty grand through SUPER that you can
Speaker 3: then withdraw later. So you might want to be making
Speaker 3: those non concessional contributions. Yeah, okay, so that you can
Speaker 3: draw down on them later.
Speaker 2: For a home deposit, I've always wondered what the benefit
Speaker 2: of that. Do you also get the interest that's paid
Speaker 2: onto it, Oh, fifteen percent super? So you like yes.
Speaker 3: So let's say you've got your house deposit saved and
Speaker 3: like you know, you're slowly chipping away and you've got
Speaker 3: fifteen grand sitting there, pop it into SUPER and then
Speaker 3: pull it out for your house and you've got an
Speaker 3: extra fifteen percent back on that money. So true, it's
Speaker 3: like legal money laundering. Wow. When I put it that way,
Speaker 3: it gets a little bit sexier, a little bit riskier.
Speaker 1: Yeah.
Speaker 3: Yeah yeah. So inside superannuation you are taxed on fifteen
Speaker 3: percent on earnings versus your marginal tax rate outside in
Speaker 3: retirement phase up to two million dollars is completely tax free,
Speaker 3: my god. And then outside of SUPER, like you've got
Speaker 3: more flexibility, Like obviously you can access it before the
Speaker 3: age of sixty, but you also pay your marginal tax
Speaker 3: rate with capital gains tess counts and franking credits and
Speaker 3: all of that and we try and make it make
Speaker 3: as much sense and make it as beneficial as possible,
Speaker 3: but goal you're still paying your marginal tax rate. Absolutely.
Speaker 2: And for those who have no idea franking credits that,
Speaker 2: we have an episode about that.
Speaker 3: Yeah, we have a whole episode of franking credits. If
Speaker 3: you want a cute little like tld A, frankin credit
Speaker 3: is an IOU that comes with your return to say,
Speaker 3: this company that I've invested in has already paid tax
Speaker 3: on my behalf, so please don't.
Speaker 2: Double tax me.
Speaker 3: Yes, okay, yep, yep, yep, I owe you that's connected
Speaker 3: to your share.
Speaker 2: I see, I see, I see okay, So what about
Speaker 2: insurance and super? Can you explain how?
Speaker 3: Okay, Okay, I'm glad you brought that up because I
Speaker 3: have in stress in balls because so many people hopefully
Speaker 3: are like, oh my god, they beck, we're so inspired.
Speaker 3: We want to go and change our super immediately. But
Speaker 3: please don't do that very quickly, because historically default insurance
Speaker 3: was just a given on your super. So you'd like
Speaker 3: sign up. When I was younger, I would sign up
Speaker 3: for a Super and then I would immediately have insurances
Speaker 3: attached to that, and those insurances are.
Speaker 2: Like Hen's teeth. They are.
Speaker 3: I'm not going to say they're the best insurance in
Speaker 3: the entire world, because like they might not be. But
Speaker 3: you didn't have to do any health check for that, Beck. Yeah. True.
Speaker 3: So like I'm I'm going to give you a really
Speaker 3: morbid example that's going to make a lot of sense. Yes,
Speaker 3: I'm going to use you as an example, but yes,
Speaker 3: I love you, But also I think you'll find it funny.
Speaker 2: Beck gloves of ape.
Speaker 3: We know Beck gloves of ape, right, Yeah, absolutely?
Speaker 2: Yeah.
Speaker 3: So if I sent you down to my friends at
Speaker 3: Skywealth and said, do Beck's insurances, they would do your
Speaker 3: health questionnaire and you would tell them, yeah, I vape,
Speaker 3: and then the insurance company would say, okay, Beck, thanks
Speaker 3: for that information. So what we're going to do is
Speaker 3: exclude lung cancer and not cover you for lung cancer
Speaker 3: in the event that that happens, because you're personally choosing
Speaker 3: to vape, and you know, obviously we just don't want
Speaker 3: to pay for that. It's too much risk, but we'll
Speaker 3: give you the insurance, but there's this exclusion for that. Right.
Speaker 3: The same thing could happen if you were like a
Speaker 3: Keen netballer and you had a really bad knee injury.
Speaker 3: And then we go and do that same health questionnaire,
Speaker 3: and your insurer is going to go, look, you're a
Speaker 3: pretty high risk of another knee injury because you already
Speaker 3: have like basically a compromised body part. So we'll cover
Speaker 3: you for everything except for your knee. Ye.
Speaker 2: Right.
Speaker 3: So they have these things called exclusions, and for a
Speaker 3: lot of us, you might go, well, I'm fit and
Speaker 3: healthy and fine, okay, fine, pop off, queen, go get
Speaker 3: your insurances done while you are. For some of us,
Speaker 3: we get mental health exclusions because we've been very honest
Speaker 3: about our situation men in therapy, and there's been a
Speaker 3: lot going on. But most funds, so most super funds,
Speaker 3: if we have this default insurance, go. You could go
Speaker 3: and get lung cancer and still be covered because it
Speaker 3: was default and they just gave you blanket insurance. They
Speaker 3: didn't do the health questionnaire, they didn't check your knee,
Speaker 3: they didn't check pre existing conditions. And you know what,
Speaker 3: if you have a pre existing condition, or you do
Speaker 3: something more risk averse, like a vape. And I'm just
Speaker 3: using that as an example because I do not endorse
Speaker 3: vaping and I know you don't either. Well, no, but
Speaker 3: you still like it. That can do it. You can't.
Speaker 3: But most super funds automatically include some level of insurance,
Speaker 3: and if you go and change your super fund today,
Speaker 3: it just cancels that insurance. And the way that the
Speaker 3: legalities of the super industry and the insurance industry happens,
Speaker 3: you don't automatically.
Speaker 2: Get it in your new fund anymore.
Speaker 3: Yeah, okay, So I need you to make sure that
Speaker 3: if you have income protection, if you have life insurance,
Speaker 3: or you have some type of total and permanent disability
Speaker 3: or TPD inside your super maybe let's check if we
Speaker 3: need to keep that. And at that point, if you
Speaker 3: still want to keep that and move super, you can.
Speaker 3: I actually have two super funds for this reason. So
Speaker 3: I have one superanuation fund that is my old super
Speaker 3: that has a good insurance policy for life insurance inside
Speaker 3: of it, and I actually keep I think it's like
Speaker 3: two thousand dollars in that super fund, yeah, just to
Speaker 3: pay the fees and make sure it never dips below
Speaker 3: and that you know, I get to keep that insurance.
Speaker 3: And then all of my other super is in my
Speaker 3: preferred superannuation fund. Yeah. Nice, but if you didn't know,
Speaker 3: you would just go and roll over to a different
Speaker 3: fund and then miss out on something that could potentially
Speaker 3: change yours or your families life if something bad happened. Yeah, right,
Speaker 3: So I would say it is absolutely worth being aware
Speaker 3: about what your soup, like what you've got in your super,
Speaker 3: because if you change or you consolidate funds without checking,
Speaker 3: like that insurance disappears. You can't just go back and
Speaker 3: be like, oh, hey, sorry, that was an accident. I
Speaker 3: didn't yea, I didn't want that. They're gonna be like,
Speaker 3: absolutely not, We're glad you're gone. Like they're going to
Speaker 3: be like, we've been trying to get people out of
Speaker 3: this because we didn't do the health check and now
Speaker 3: a lot.
Speaker 1: Of us do.
Speaker 3: Yeah. So yeah, if you were through the gates, don't
Speaker 3: come back out without like a stamp on your wrist,
Speaker 3: because they're not going to let you back in the club. No,
Speaker 3: oh my god.
Speaker 1: You know.
Speaker 2: So you can also set up.
Speaker 3: Policies outside of superannuation that are tailored to you, but
Speaker 3: still have like premiums deducted from your super as well.
Speaker 3: I don't know if lots of people notice that, you
Speaker 3: could go do your insurances and have it paid from
Speaker 3: your super since not coming out of your cash flow,
Speaker 3: so that way you don't lose the cash flow, but
Speaker 3: you also get the cover that you need. And I
Speaker 3: guess that's where you know, calling your fund or working
Speaker 3: with we've had feels from sky Wealth on the show before,
Speaker 3: can actually help you. They'll walk you through what cover
Speaker 3: you've got, what you might need, and I guess how
Speaker 3: to structure that to protect you without paying for extras
Speaker 3: that you don't need. And I guess that's a shameless
Speaker 3: plug for sky Wealth basically because they're my financial advisors
Speaker 3: for my personal insurances. They did mine, they did my husband's,
Speaker 3: They've updated it since I had Harvey. They update it
Speaker 3: when I get, you know, different debt situations. Slack and
Speaker 3: most of my team have gone through them as well,
Speaker 3: and we actually refer a lot of people in our
Speaker 3: community there just because they do good and they be
Speaker 3: good and I don't know, sometimes you just want a
Speaker 3: good recommendation. You can also top up your super to
Speaker 3: cover insurance if you're like, oh, well, I don't want
Speaker 3: it eating away at my returns. VE like, I want
Speaker 3: more insurance, but I don't want it at the compromise
Speaker 3: of my you know, retirement. Well, you could top up
Speaker 3: your super with those additional contributions so that you get
Speaker 3: the tax savings. We pay for it inside super and
Speaker 3: it's fifteen percent instead of thirty. Oh clever, got he's clever.
Speaker 2: Yeah.
Speaker 3: But so your financial advisor, like if you went and
Speaker 3: saw Skywealth, that just tell you how to do that properly.
Speaker 2: Absolutely, so you can call your super fun for literally
Speaker 2: anything appearances.
Speaker 3: Yeah, you could ask them about everything. I mean, they're
Speaker 3: probably not that good at giving life advice. They do
Speaker 3: often offer free financial advice, yes, but it's constrained to
Speaker 3: your super funds. They can't be like, oh, yeah, Beck,
Speaker 3: he's how to save for your next holiday to Thailand
Speaker 3: because you enjoyed that so much. But you could call
Speaker 3: them up and ask them to explain your options, your
Speaker 3: fees and like your insurances in plain English. They are
Speaker 3: just people that work there and know it really well.
Speaker 3: They could also help you set up a salary sacrifice.
Speaker 3: They could also model things for you, so you can
Speaker 3: get them like get them to work. Yeah, you give
Speaker 3: me an example of what an extra twenty dollars a
Speaker 3: week could look like over the next decade.
Speaker 2: What about twenty five. What about thirty, Like put them
Speaker 2: to work.
Speaker 3: They're not going to like me saying that, but you're
Speaker 3: paying super fees so that you access this service.
Speaker 2: Use the service. I just think that we should be
Speaker 2: using it. Okay, Well, I don't know about you, but
Speaker 2: my brain is full in a good way.
Speaker 3: I'm not gonna lie. I think I need a cup
Speaker 3: of tea.
Speaker 2: Yeah, it might be nice.
Speaker 3: I feel like I need to just I've been yapping.
Speaker 3: I'm so excited about this, and I guess my hope
Speaker 3: for this episode is that if you were starting to
Speaker 3: feel like you were a little bit behind, you finished
Speaker 3: this episode and you're like, oh, it's actually not that bad.
Speaker 3: Like I have a pretty clear idea of what I'm doing.
Speaker 3: I'm a very capable human being. I could totally set
Speaker 3: this up, and you're ready to take another small step
Speaker 3: in the right direction for Future You. So if that happened,
Speaker 3: please go and do that, like yes, follow the momentum.
Speaker 3: And if you loved this episode, obviously please hit subscribe
Speaker 3: because we've got plenty more episodes coming that are going
Speaker 3: to put future You in the best possible position. And
Speaker 3: share it with your bestie so that you can both
Speaker 3: be holidaying in Europe together in retirement, like you're.
Speaker 2: Already yacht or something.
Speaker 3: I don't know.
Speaker 2: Absolutely, we'll see you guys on Friday. Bye bye.
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Speaker 4: not be relied upon to make an investment or financial decision.
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