Speaker 1: Hello, my name's Santasha Nabananga Bamblet. I'm a proud yor
Speaker 1: the Order Kerni Whoalbury and a waddery woman. And before
Speaker 1: we get started on She's on the Money podcast, I
Speaker 1: would like to acknowledge the traditional custodians of the land
Speaker 1: of which this podcast is recorded on a wondery country,
Speaker 1: acknowledging the elders, the ancestors and the next generation coming
Speaker 1: through as this podcast is about connecting, empowering, knowledge sharing
Speaker 1: and the storytelling of you to make a difference for
Speaker 1: today and lasting impact for tomorrow.
Speaker 2: Let's get into it.
Speaker 3: She's on the Money, She's on the Money.
Speaker 4: Hello and welcome to She's on the Money. The podcast
Speaker 4: is about the bank balance of future you as much
Speaker 4: as today you do. You ever see the letters SMSF
Speaker 4: and wonder what does that stand for? But you kind
Speaker 4: of hear people talking about it and setting up their
Speaker 4: own self managed super fun and have you ever thought like, am.
Speaker 2: I supposed to be doing that?
Speaker 1: Well?
Speaker 4: Honestly kind of same. I am excited and joining me
Speaker 4: today our expert in all things finance and the woman
Speaker 4: asking themselves turned to when they needed the lowdown on
Speaker 4: millennials and their superannuation. Victoria Devine.
Speaker 2: That's such a flex, isn't it. I know that's actually
Speaker 2: it was like probably my biggest career flex that is
Speaker 2: really really cood. Oh well, as wanted my advice.
Speaker 4: So it's like Jesus coming to you and be like, hey,
Speaker 4: what should I write in the Bible?
Speaker 2: No it's not, but I'm not gonna correct you. I
Speaker 2: love that for us. I get asked about SMSF or
Speaker 2: self managed super all the time. You know, when you
Speaker 2: get super motivated and you're gonna do a really big
Speaker 2: DIY project, but then halfway through, you're like me deep
Speaker 2: in paint. You're standing there and you're like, why did
Speaker 2: I decide to do this? I don't know what I'm doing.
Speaker 2: I've messed so much up. I need to hire a pro,
Speaker 2: and it might now cost me a bit more because
Speaker 2: I've made all these mistakes that need unwinding. Well that's
Speaker 2: kind of what an SMSF can feel like. Yeah, sure
Speaker 2: you get to do it all yourself, beck absolutely, but
Speaker 2: sometimes it's a lot more work than it's worth. So
Speaker 2: today I decided it was time we're going to break
Speaker 2: down why managing your own super fund It sounds great
Speaker 2: in theory, but it can often turn more into a
Speaker 2: DIY nightmare than a dream. And I think that that
Speaker 2: is very poignant at the moment, because I've seen a
Speaker 2: lot of people in our community asking should I have
Speaker 2: an SMSF my friends set up one, or my parents
Speaker 2: set up one, or most alarming to me, someone approached
Speaker 2: me and said I could use the entire and mounting
Speaker 2: my superannuation and buy a property with it. There are
Speaker 2: red flags flying, Beck, they are flying, They're flying high.
Speaker 4: Yes, I used to think the same thing as well.
Speaker 4: I wanted to start my own I'm like, if I
Speaker 4: have full access to my super and no one's gonna
Speaker 4: ask me questions, it's not the case.
Speaker 2: I realized it's.
Speaker 4: Very, very illegal.
Speaker 2: It's very scary. I mean, it's not illegal to have
Speaker 2: access and invest on your own terms, absolutely.
Speaker 4: Not right, but to use it for your groceriason.
Speaker 2: Oh, no, we're not doing that, babe, Yes, absolutely not.
Speaker 4: I thought it sounded really good, but then yes, I
Speaker 4: realized I'm not allowed to do that. But I've always
Speaker 4: wanted to know about it because it kind of sounds fancy,
Speaker 4: and like, who doesn't want more control? Should we start
Speaker 4: with what a self managed super fund actually is.
Speaker 2: I think it sounds really glamorous. Like when I used
Speaker 2: to be a financial advisor, I'd have people come in
Speaker 2: and they would say, I really want to have a
Speaker 2: self managed super fund, and I feel like people thought
Speaker 2: that was a flex. So I used to have people
Speaker 2: come in and they would be like, well, I want
Speaker 2: to have complete control. And I'd be thinking in the
Speaker 2: back of my mind, like you do have complete control,
Speaker 2: and they'd be like, I need this, this, this, and this.
Speaker 2: And I used to have this friend they had a
Speaker 2: self managed super fund, and they would always tell me
Speaker 2: how silly I was for having managed funds, and I'd
Speaker 2: be like, oh, okay, like you're talking to a legitimate
Speaker 2: financial advice. So do you think I haven't thought about
Speaker 2: this as an option and of all people to do
Speaker 2: it as cheap as possible, it's me Because I owned
Speaker 2: the practice. I could have had my own team set
Speaker 2: that up for me for not that much, and I
Speaker 2: still didn't do it. So I feel like that tells
Speaker 2: you a fair bit about like how much work, how
Speaker 2: much it goes into it, work goes into it. But
Speaker 2: let's go back to basics. I suppose so a self
Speaker 2: managed superfund. It allows people to manage their own superinvestments,
Speaker 2: which is a lot deeper than having like a management
Speaker 2: company or a superannuation company doing that for you. You
Speaker 2: do have a lot more control today, So we'll get
Speaker 2: into that a little bit later, but essentially members are
Speaker 2: then responsible for managing their own funds, their own investment strategy,
Speaker 2: their own compliance with regulations. That's on your shoulders and
Speaker 2: any admin associated with it. And SMSF it's very different
Speaker 2: from having a retail or a industry fund which are
Speaker 2: managed by proper professional trustee s, which I like that.
Speaker 2: So approximately four percent of Australians have smsfs, so they're
Speaker 2: not that common, and they account actually for twenty eight
Speaker 2: percent of Australia's total super assets.
Speaker 4: Wait a minute, that's like out of one hundred percent
Speaker 4: of the funds that are available that are super.
Speaker 2: It actually makes a lot of sense. So smsfs are
Speaker 2: often associated with high net wealth individuals because of their
Speaker 2: complexity and the costs that's involved managing them. It's not
Speaker 2: something that is completely preposterous, right, Like, I'm not here
Speaker 2: saying smsfs are a terrible idea. When I was a
Speaker 2: financial advisor, I did have clients that had very practical smsfs,
Speaker 2: like they would have oodles and I'm talking like tens
Speaker 2: of millions of dollars back of family money that was
Speaker 2: being managed through an SMSF, like they would have massive
Speaker 2: property portfolios. I had one client who had a vintage
Speaker 2: car collection inside his SMSF. That was wild actually because
Speaker 2: complete side note, when you sell cars, if you sell
Speaker 2: them for a profit, you don't have to pay capital
Speaker 2: gains tax. So there's like a little loophole that basically
Speaker 2: only applies to the wealthy because you can't just go
Speaker 2: buy a nice little credola and hope that this happens.
Speaker 4: Say, for example, like sold my really really ugly old
Speaker 4: no window Toyota Echo downstairs for fifty bucks.
Speaker 2: Toyota Echo is an elite car.
Speaker 4: It actually is an incredible car, and it's fuel.
Speaker 2: Efficient, and because it's a Toyota, she's good.
Speaker 4: For she's good for it. But if I sold it
Speaker 4: for fifty bucks, I would have to pay.
Speaker 2: No, don't know whereas if you bought a house, for example,
Speaker 2: and you paid fifty bucks for it and sold it
Speaker 2: for one hundred, you would be up for capital gains tax.
Speaker 2: And that's a whole other conversation. But on cars, you
Speaker 2: don't pay that. So if you like super rich because
Speaker 2: obviously the Corolla, the Echo, it's not going to do
Speaker 2: it for us. But I have had clients who have
Speaker 2: purchased luxury and vintage cars. They might like buy an
Speaker 2: old Porsche nine to eleven and redo it and sell
Speaker 2: it for a profit. That profit is their profit to keep.
Speaker 2: They don't pay CGT on it, right, So like little tipbit,
Speaker 2: but this client used to have vintage cars in his
Speaker 2: SMSF and you know this is not earn investing one
Speaker 2: oh one with Viba, Like it's interesting. The amount vintage
Speaker 2: car's return in comparison to the Australian share market is astronomical.
Speaker 2: You have to be good at it. But he used
Speaker 2: to flip cars, and I remember thinking, oh my god,
Speaker 2: Like I thought this was going to be an absolute
Speaker 2: shit show because like I looked over archingly, he's an
Speaker 2: SMSF looking, what's it made up? Off cars? Far out? Okay,
Speaker 2: Like I'm going to work with his part, like what's
Speaker 2: going on? And obviously did all my research and I
Speaker 2: remember looking at it going what the hell? This guy's
Speaker 2: a genius? Like he talked me through it, and he
Speaker 2: was really good at it, like he ultimately because it
Speaker 2: was so wealthy, he actually funded the setup of a
Speaker 2: whole work shop that he hired staff for that did
Speaker 2: it for everybody else, like it was a legit business.
Speaker 2: But he did that so that it really brought down
Speaker 2: the cost of him fixing up his cars. He had
Speaker 2: somewhere to keep them, like anyway, whole different thing, but
Speaker 2: just really quickly, Yes, if you have cars in an SMSF,
Speaker 2: does that mean you just like the estimated value of
Speaker 2: that is what's in your SMSF or yeah, I don't
Speaker 2: forget to access an investment, it either has to provide
Speaker 2: you with an income. A car is not going to
Speaker 2: do that. He just had an asset, so in order
Speaker 2: for it to provide him in income, he had to
Speaker 2: sell the asset. So you'd have an average value of
Speaker 2: what those cars were worth. But ultimately, a car or
Speaker 2: a house is actually only worth what the market will
Speaker 2: pay on the day that you sell it. So if
Speaker 2: you go, oh, well it's worth three hundred grand, I'm
Speaker 2: feeling safe, Well, it's only worth three hundred thousand dollars
Speaker 2: if the market is willing to pay for that, Like
Speaker 2: you'd have to find a buyer. Right, So there's a
Speaker 2: lot more strategy And that's a side note. But back
Speaker 2: to this, I feel like smsfs can be very costly.
Speaker 2: They can be very fun. Like, don't get me wrong,
Speaker 2: I don't want this entire episode to be the's warning us.
Speaker 2: They can be fun, but in certain circumstances.
Speaker 4: Right, So it sounds like it is a lot of work,
Speaker 4: but there are some benefits this, So what's the actual
Speaker 4: catch with smsfs then why would everyone just jump on board?
Speaker 4: If it's all about like kind of like being controlled.
Speaker 2: You put your echo in your SMSF.
Speaker 4: I would put my echo in my smsfal Mouthful.
Speaker 3: Isn't it.
Speaker 2: Yeah, it's like she sells seashells by the sea shop.
Speaker 4: That can also go on your SMSF.
Speaker 2: Ye can't haven't seen it, but happy to be corrected.
Speaker 2: Managing an SMSF is a lot of work. It's basically
Speaker 2: like running a tiny small business. So you're responsible for
Speaker 2: meeting all the legal obligations. You're then responsible for making
Speaker 2: sure that it is compliant with tax laws. You're responsible
Speaker 2: for making sure that your fund gets audited every single year.
Speaker 2: So like you need to pay someone an accountant to
Speaker 2: audit your fund, and so many more. I won't say
Speaker 2: hidden costs because they're not hidden, you just probably don't
Speaker 2: know about them when you learn what an SMSF is.
Speaker 2: And this isn't obviously my opinion, but our friends at
Speaker 2: ASIK recommend that you have at least half a million
Speaker 2: dollars in super before even considering setting up an SMSF
Speaker 2: to justify the costs. Right, So if you don't have
Speaker 2: more than that and you're considering it, I would wonder
Speaker 2: why to be rude for a hot second. Is it
Speaker 2: your ego? Do you want to be in control and
Speaker 2: you're not willing to do the research into all of
Speaker 2: the industry and super funds that you could work with
Speaker 2: that are actually aligned to your values and allow you
Speaker 2: to have a bit of a play around with the
Speaker 2: amounts of different things. Or do you have somebody in
Speaker 2: the back of your mind who's like, oh, we're a
Speaker 2: company that sets up an SMSF, accesses your superannuation, helps
Speaker 2: you invest it in property and wham maam, thank you, ma'am,
Speaker 2: you're going to get an off the plan apartment. And
Speaker 2: I think that we need to talk about these things
Speaker 2: a little bit more because it could be all sunshine
Speaker 2: and roses like I could sell it to you now,
Speaker 2: and dodgy financial advisors, which, thankfully after the Royal Commission
Speaker 2: can't exist anymore. Dodgy financial advisors used to set them
Speaker 2: up and then work with a property developer that they'd
Speaker 2: clipped the ticket on. Like if I said to you, Beck, oh, well,
Speaker 2: actually that financial advisor who said set up an SMSF
Speaker 2: actually is making five percent of your property purchase. Oh right, Okay,
Speaker 2: that used to happen. Yeah, So there's a lot of
Speaker 2: hesitancy in the market when it comes to talking about smsfs.
Speaker 2: But there's also a lot of people just like me
Speaker 2: who are or were financial advisors who've just wound up
Speaker 2: more of them than we've ever set up, because we
Speaker 2: just get new clients who maybe weren't happy with their advisor,
Speaker 2: or they'd gotten a few years into their SMSF and
Speaker 2: it was not working for them. And I would then
Speaker 2: look at it and be like, who let you do
Speaker 2: this in the first place? Oh, here's the advice I got,
Speaker 2: And you'd read the advice and you'd just be like,
Speaker 2: I knew in the back of my mind that there
Speaker 2: was probably a referral going on, and someone was clipping
Speaker 2: the ticket because otherwise it made no sense to give
Speaker 2: that advice.
Speaker 4: Sneaky, sneaky snake.
Speaker 3: Yeah.
Speaker 2: So there's also the cost factor. Yeah, so back to
Speaker 2: what Acik was saying, smsfs can be really expensive to
Speaker 2: set up and they're maintain and the ATO says that
Speaker 2: the average annual cost of running an SMSF is between
Speaker 2: three and ten thousand dollars, depending on the complexity of it.
Speaker 4: Okay, so that's not small change, that's for sure. Because
Speaker 4: here I am thinking, if you're doing it yourself, no fees,
Speaker 4: no anything.
Speaker 2: No, so there's still fees, right, there's not no fees,
Speaker 2: And they think that that's where we need to talk
Speaker 2: about it, because even though beck Acik has said, oh well,
Speaker 2: you'd have to have a minimum of five hundred thousand
Speaker 2: dollars to consider setting one up, that's where people, I
Speaker 2: think start thinking deeply about it. Right. So, like, on average,
Speaker 2: the cost of managing funds in Australia is give or
Speaker 2: take one percent. So like, if you've got a balance
Speaker 2: of five hundred thousand dollars in your superannuation, which must
Speaker 2: be nice, you you're probably paying at least five thousand
Speaker 2: dollars in fees already, right, and when your superstatement comes in,
Speaker 2: you're going to look at that and be like, five
Speaker 2: grand in fees for what And the answer is administration management,
Speaker 2: ongoing portfolio management. Probably some insurance is built into that.
Speaker 2: So it's very easy to just see the bottom line
Speaker 2: and go, well, I'm spending five grand on this, why
Speaker 2: wouldn't I go spend three to ten thousand dollars on
Speaker 2: just having my own I could sell it to you
Speaker 2: if I wanted to, but I'm not going to.
Speaker 4: So it's not really something that the average person maybe
Speaker 4: like I was gonna say you or I, but actually
Speaker 4: just I who just wants to kind of invest smarter, Like,
Speaker 4: it's probably not something that they should do. I know
Speaker 4: you can't really give personal as advice, but.
Speaker 2: No, of course not. But you're exactly right, Like, if
Speaker 2: you don't have a huge balance, or you're not investing
Speaker 2: in really complex assets like property, there are much more
Speaker 2: simple ways for you to manage your superannuation very cost
Speaker 2: effectively and also structure effectively. Most now traditional super funds
Speaker 2: actually allow you to pick your investment strategy, which we
Speaker 2: know because I talk about that all the time, and
Speaker 2: then they tailor it to your risk level, so you
Speaker 2: still have a lot more control than you think you
Speaker 2: do without all the admin stress. Like Beck, it is
Speaker 2: twenty twenty four right now, and even if you're listening
Speaker 2: to this in twenty twenty five, you have so much
Speaker 2: power in superannuation. And I'll use Australian Super as an example,
Speaker 2: not as a recommendation, but as an example. Because they're
Speaker 2: a top performing fund. I feel like everyone's heard of them.
Speaker 2: They are very trusted in our industry, and I think
Speaker 2: that because of that, you automatically assume that they must
Speaker 2: be a little bit fuddy duddy. But the reality is
Speaker 2: inside Australian Super, yes, you can pick your investment strategy
Speaker 2: and you can pick it and tailor it to your
Speaker 2: risk profile, which if you haven't is a reminder to
Speaker 2: please log in and make sure you know what those
Speaker 2: things are. But they also allow you to take some
Speaker 2: of the money inside your superannuation and pick an ETF
Speaker 2: that you like, so you can actually have so much
Speaker 2: control and allow that portfolio to reflect your values. And
Speaker 2: if you don't know that, you don't know, and you
Speaker 2: might think that the only way to have ultimate control
Speaker 2: is to take it all out and have it in
Speaker 2: your own fund. But the reality is you can control
Speaker 2: so much. And if Australian super is not for you,
Speaker 2: maybe you want an all women super fund or you
Speaker 2: want to invest in something completely different, like there's a
Speaker 2: super fund for everyone nowadays. Yeah, definitely find a company
Speaker 2: that aligns with your values if that's what you're looking
Speaker 2: for before you jump into Well, I have to have
Speaker 2: ultimate control and it must be all on my shoulders, right, Yeah,
Speaker 2: that's so true.
Speaker 4: Actually I did jump into mind and I kind of
Speaker 4: like move my investments around or like mine, this feels
Speaker 4: like I'm fully you go in and check it and
Speaker 4: it's like I feel in control of this. So it
Speaker 4: does sound like a much simpler option for most of us.
Speaker 4: And I love that you can still like kind of
Speaker 4: take charge that needing to be a super fun manager yourself.
Speaker 2: And I mean, would you call a super fun manager
Speaker 2: to fix your taps if they were broken? Beck, No,
Speaker 2: I'd call a plumber. Like I want somebody who is
Speaker 2: an expert running the show. And given it's so affordable
Speaker 2: to do, so, why aren't you just getting the expert involved?
Speaker 1: Right?
Speaker 2: They know what they're doing, they know what they're doing,
Speaker 2: and like it's the plumber that has a leaky tap.
Speaker 2: So like I knew that if I ever set up
Speaker 2: an SMSF myself, I'd probably let it go by the wayside,
Speaker 2: not do the right thing by it, not check everything
Speaker 2: because I'm so busy getting in everybody else's business. Don't
Speaker 2: they say the plumber always has a leaky tap, Like
Speaker 2: I don't know?
Speaker 4: So true.
Speaker 2: We are all about actionable tips here at Cheese on
Speaker 2: the Money, and we're going to take a really quick
Speaker 2: break and when we come back, we're going to give
Speaker 2: you the lowdown on how you can manage your super
Speaker 2: within your super fund. So don't go anywhere.
Speaker 4: Welcome back everyone. So V what are the steps our
Speaker 4: listeners can take to stay in control of their super
Speaker 4: without getting sucked into the SMSF hype.
Speaker 2: So first things, Verse Beck, I don't think that you'll
Speaker 2: be surprised. I want to talk about why it's important
Speaker 2: firstly be in control of your super but secondly the
Speaker 2: importance of being in control of your super, especially as
Speaker 2: a woman. Here's the thing. On average, Australian women retire
Speaker 2: with twenty eight percent less superanuation than their male counterparts,
Speaker 2: and while that is not fair and a lot of
Speaker 2: people could have some arguments about you know, oh my gosh,
Speaker 2: like the gap doesn't exist. I will cut you, like,
Speaker 2: I'm so done with that conversation because the gap exists
Speaker 2: and I can prove it, and it's usually ignorance and
Speaker 2: people being literally rude, Like if somebody puts their hand
Speaker 2: up back and says I'm experiencing disadvantage, do you go no,
Speaker 2: you not sit down? Yeah, like what why aren't we
Speaker 2: getting behind it? Like I would much prefer to be like, oh, okay,
Speaker 2: maybe this conversation isn't for me. I'm gonna dip out,
Speaker 2: but let everybody else have a platform to share their thoughts, feelings, beliefs.
Speaker 4: And values absolutely because no one's experience is exact same
Speaker 4: as yours. And if it was, and everyone will be
Speaker 4: like you.
Speaker 2: Do you know what kills me the most? Beck complete
Speaker 2: side note again and like this is me just calling
Speaker 2: people in my DMS out. I cannot stand when a
Speaker 2: woman of all people messages mean says well, I don't
Speaker 2: think this gender gap is real. I've literally not experienced it.
Speaker 2: That's not the same for everyone survivors bias.
Speaker 4: And yeah, and also like it might not be true.
Speaker 4: They might not know that they could be being paid
Speaker 4: more even though they're being paid.
Speaker 2: But like, even if they're like, oh, it's completely transparent,
Speaker 2: Like I am on the same salary as all of
Speaker 2: my male counterparts, and I have been since the day
Speaker 2: I graduated complete TRANSPARENCYV. Your argument is flawed. Why do
Speaker 2: you think that your experience means that everybody's experience is
Speaker 2: reflective of that? It actually drives me insane to think
Speaker 2: that you are so naive that you think because your
Speaker 2: experience was yours must be the same for everybody else. Totally,
Speaker 2: It's how dull would the world be if that were true?
Speaker 4: If that were true, and also, where did this conversation
Speaker 4: come from?
Speaker 1: Then?
Speaker 4: If it doesn't exists, there are a.
Speaker 2: Lot better things to advocate for, yes than closing a gap.
Speaker 4: Yes, Like I.
Speaker 2: Am saying here, I just want the same thing and
Speaker 2: the same opportunities that are extended to my male colleagues.
Speaker 2: I'm not saying I want more or better, like Beck.
Speaker 2: If this didn't exist, there is a whole heap of
Speaker 2: stuff I could be like, oh my gosh, women, we
Speaker 2: need like three days off a week, Like I could
Speaker 2: find some stuff to come up with and a pretty
Speaker 2: convincing argument. But like closing a gap and asking for
Speaker 2: equality bare minimum, the gap isn't because we're bad at
Speaker 2: managing money. It's mostly due to things like career breaks
Speaker 2: and having kids or unsurprisingly being paid less in the
Speaker 2: first place. Beck. And basically we see it here at
Speaker 2: Choose on the Money as the hidden tax that we
Speaker 2: pay just for being women. What a privileged But we
Speaker 2: don't have to let it stay that way, right, So
Speaker 2: I've got a few steps of how we can take
Speaker 2: back our power when it comes to our superannuation. And
Speaker 2: the first is I want you to check your superbalance.
Speaker 2: Do you know what is in your superannuation today? I think,
Speaker 2: don't have to tell me the amount, sure, but do
Speaker 2: you know I think so that is good And most
Speaker 2: people in our community would be like, oh yes, maybe no, Like,
Speaker 2: if you're erring on the side of caution, babe, it's
Speaker 2: time to log into your superfund and just check. Just
Speaker 2: check it. It will take five minutes and you will
Speaker 2: be a lot more financially literate. There is research out
Speaker 2: there that says when we know our numbers, we are
Speaker 2: I think it's like eighty two percent more likely to
Speaker 2: achieve financial security than when we don't know our numbers.
Speaker 2: That's very true, and that is just you knowing, not
Speaker 2: actually about doing anything or saving anything. We haven't even
Speaker 2: got to the part where I make you take actual action.
Speaker 2: Most of us don't check regularly, and I want this
Speaker 2: to become part of your financial hygiene checklist. I want
Speaker 2: you to do it at least every quarter. Knowing your
Speaker 2: balance and how it's performing is going to put you
Speaker 2: in the best possible position. Do you need to be
Speaker 2: considering a different fund? The next is I want you
Speaker 2: to review your funds, fees and the performance that your
Speaker 2: fund has. Perfect Now, just really quickly on fees, I
Speaker 2: do want to know. I understand why superannuation companies charge fees. Yeah,
Speaker 2: but I'm struggling.
Speaker 4: To find where fees come from. If you're managing your
Speaker 4: superfund yourself.
Speaker 2: It's a good question to be honest, and that comes
Speaker 2: from all of the external support that you need. Okay,
Speaker 2: So where does the SMSF come from? In the first place,
Speaker 2: it needs to be established by an accountant, So setting
Speaker 2: up the structure, registering it with the ATO and ASSIC
Speaker 2: is going to cost you money. So getting that fund,
Speaker 2: it's kind of like setting up a trust. As we
Speaker 2: said before, I think I referred to an SMSF being
Speaker 2: like a small business. It's like a small business cost.
Speaker 2: So you need to register your small business. You need
Speaker 2: to register your SMSF. You're going to need to have
Speaker 2: an accountant. Legally, if you're a small business back you
Speaker 2: could go, but I'm going to do the accounting myself.
Speaker 2: That makes sense, But in an SMSF you actually can't.
Speaker 2: You need an external auditor to perform an audit each
Speaker 2: and every single year, and that audit beck can be
Speaker 2: anywhere from three to eight thousand dollars. Oh, I see,
Speaker 2: So that's what I'm talking about. When it comes to fees.
Speaker 2: It's not oh, you're going to save so much because
Speaker 2: you don't have the underlying management fee, Like there might
Speaker 2: be underlying management fees that then sit inside your super
Speaker 2: as well, because what would happen is, let's just get
Speaker 2: the laundry list going. You've got to register it to
Speaker 2: begin with. So charge there, You've got to pay for
Speaker 2: your annual audit every year. Great, are you an investing wizard? Like,
Speaker 2: let's be honest, let's pretend you're following assex rules. You
Speaker 2: had a minimum of five hundred thousand dollars in your
Speaker 2: super before you decided to go and get an SMSF fantastic.
Speaker 2: You've got five hundred grand to invest. How are you
Speaker 2: investing it? Are you going to go see a financial advisor?
Speaker 2: Maybe you do right. Financial advice fees in Australia sit
Speaker 2: between three and ten thousand dollars each and every single year,
Speaker 2: So you've got to pay for that. You've got to
Speaker 2: pay ongoing management fees for that financial advisor you for
Speaker 2: you're using them if you're smarter than the average financial
Speaker 2: advisor and you're like, well vo and a manage it myself.
Speaker 2: If you buy ETFs, you're going to have the underlying
Speaker 2: fees for owning that ETF. If you're buying direct shares,
Speaker 2: you're going to have underlying fees for brokerage and ongoing
Speaker 2: platform support.
Speaker 4: Truly only up it does.
Speaker 2: And that's where I go, like, this isn't as easy
Speaker 2: as you think it is. And all of these fees
Speaker 2: might slip through the cracks, And when I say that,
Speaker 2: you might not remember they're there, because like brokerage might
Speaker 2: happen and you go, will I paid fifty bucks in
Speaker 2: brokerage to make that transaction, you've already forgotten about it,
Speaker 2: you haven't accounted for it. Like these things over time
Speaker 2: add up. So we want to make sure that we're
Speaker 2: making the right decision. And when we say I want
Speaker 2: you to review your fees for your currency branuation, I
Speaker 2: want you to look at retail and industry funds, check
Speaker 2: the fees, check the investment returns, and have a look
Speaker 2: at what am I getting the level of control that
Speaker 2: I want to make sure that you're in the right
Speaker 2: account because their fees are going to be a lot cleaner.
Speaker 2: And I'm not saying they're better or worse, but just
Speaker 2: a lot cleaner to review, yeah, because they're going to
Speaker 2: go down the bottom of your sheet. Basically, you're paying
Speaker 2: this amount in fees, this amount of insurance, and this
Speaker 2: amount in management because more often than not, if that
Speaker 2: superannuation fund invests in a Vanguard ETF for example, they
Speaker 2: are going to pass that management fee onto you. So
Speaker 2: if Vanguard charges zero point eight percent, you are going
Speaker 2: to pay that point eight percent, But then you're also
Speaker 2: going to pay your super fund fees for them to
Speaker 2: manage that for you. So I don't think it's a
Speaker 2: way of money you're paying someone to make sure that
Speaker 2: you're getting good returns money. In the next thing I
Speaker 2: want you to do, Beck, how many super funds do
Speaker 2: you have?
Speaker 4: You might be shocked by this, but I used to
Speaker 4: have like four, Now I have one.
Speaker 2: So you've console a day they're ready. That is the
Speaker 2: next hot tip. According to the ATO, about a quarter
Speaker 2: of super fund holders actually have multiple accounts, So that
Speaker 2: means basically twenty five percent of people listening right now
Speaker 2: have multiple super funds and they are paying multiple sets
Speaker 2: of fees. So we just talked about fees and how
Speaker 2: they can add up. Imagine if you had to pay
Speaker 2: double Beck while you're there. Also, can you please check
Speaker 2: if you have any claimed super so sometimes and this
Speaker 2: is more historical because now we are better at data matching,
Speaker 2: but there's about eighteen billion dollars right now sitting Beck,
Speaker 2: Oh my god, in an account that the ATO manages,
Speaker 2: and it's lost in unclaimed superannuation that people haven't gone
Speaker 2: and picked up. How do you find that online? So
Speaker 2: you need to do some data matching three DATO website
Speaker 2: super easy though, because the government actually doesn't want this.
Speaker 2: They can't spend it right, they want to give it
Speaker 2: back to you. That's very nice, like, yes, but it's
Speaker 2: also a legality, right, Like it's lost. It's kind of
Speaker 2: gone into lost and Found box and you can't just
Speaker 2: go and raid the lost and Found box and take
Speaker 2: whatever you want. That's theft. So they actually want to
Speaker 2: give it back to you, so they're making it as
Speaker 2: easy as possible. But I would have a look at it.
Speaker 2: I would also urge your parents to look at it,
Speaker 2: because it's more likely that they are going to have
Speaker 2: lost super than you do because data matching. You know,
Speaker 2: you and I are a bit younger back then, they
Speaker 2: might have had different names, they might have gotten married,
Speaker 2: they might have not provided enough information on a super
Speaker 2: fund form for it to become lost. So just maybe
Speaker 2: helping made out.
Speaker 4: Yeah, oh my god, I'm going to Google after this, all.
Speaker 2: Right, please do, And then we're going to assess our
Speaker 2: investment options. Right. So we spoke before about what different
Speaker 2: super funds can do, and it's a lot more powerful
Speaker 2: than it used to be. But most super funds of
Speaker 2: our different investment strategies that you can pick from, and
Speaker 2: often I would say they're labeled like high growth, balanced,
Speaker 2: or conservative, and most of you if you log into
Speaker 2: your super fund and you've done nothing until this point.
Speaker 2: No shame, look at you doing it now. Absolutely, But
Speaker 2: I can almost guarantee that when you go in, you'll
Speaker 2: see that you're in a balanced fund. Nice, okay, right
Speaker 2: in the middle. What does that mean though? It means
Speaker 2: that you probably got your super fund forms when you've
Speaker 2: got your first job or a job that you had
Speaker 2: to sign super funds for, and you're like, I don't
Speaker 2: know what to pick, because if I said, Becky, your conservative,
Speaker 2: you'd be like, no, high growth, Oh that sounds scary.
Speaker 2: Then they're a little box and it says balanced beside it.
Speaker 2: What one are you most comfortable ticking? If you don't
Speaker 2: have the financial literacy you deserve to make the best
Speaker 2: decisions for you.
Speaker 4: All balanced, for sure, one.
Speaker 2: Hundred percent, And we all did it. All of my
Speaker 2: super funds were balanced at one point. I have since
Speaker 2: changed it. Don't worry. I'm a very high growth investor.
Speaker 2: But most of you are imbalanced because it was the
Speaker 2: safest option at the time. But I can almost guarantee
Speaker 2: that if we went and did a risk profile, which
Speaker 2: we have done an entire episode on for the community,
Speaker 2: So go and we'll put the information in the show notes,
Speaker 2: but there is an entire episode on how to work
Speaker 2: out what your risk profile is. I can almost guarantee
Speaker 2: because of age and a few other factors, and the
Speaker 2: fact that people are in the shees on the money community.
Speaker 2: They're not balanced investors. They're probably growth or high growth.
Speaker 2: They want more out of their money than just sitting
Speaker 2: a lot of it in cash. Yeah, okay, so do
Speaker 2: you know how much that costs you?
Speaker 3: Though?
Speaker 2: To check?
Speaker 4: How much?
Speaker 2: Nothing? It's free?
Speaker 5: Oh my god.
Speaker 2: So you can go and do this and put future
Speaker 2: you in the best possible financial position. And you could
Speaker 2: spend some money on a coffee and be like, but
Speaker 2: that coffee and did a lot for future me. Yes,
Speaker 2: that's so true, exactly right. Okay.
Speaker 4: My next question B is how do you know how
Speaker 4: much you'll need in your super and how do you
Speaker 4: get there?
Speaker 1: Like?
Speaker 2: How much cash do you need? How by the time
Speaker 2: you retire?
Speaker 4: Ideally it's a.
Speaker 2: Good question, right. So the AFSA suggests that people will
Speaker 2: need about five hundred and ninety five thousand dollars in
Speaker 2: super savings at the age of sixty seven. Okay, but
Speaker 2: couples need six hundred and ninety thousand dollars combined. It's
Speaker 2: nice to have some clean numbers, right, it is nice.
Speaker 2: It's nice to not have somebody turn around and be like,
Speaker 2: oh well, it's up to you and your values and
Speaker 2: your morals. Like at a minimum, the AFSA has recommended
Speaker 2: that single people need about six hundred grand in their account. Sure,
Speaker 2: So working then backwards, we need to work out our
Speaker 2: lifestyle goals. What that looks like. Maybe you want to
Speaker 2: travel around Australia and have some tinnies and you know,
Speaker 2: maybe get an old caravan and have a sick life.
Speaker 2: Or maybe you're like, we'll be Actually, I've been working
Speaker 2: in the background and I want yacht. Those two things
Speaker 2: cost very different amounts of money, and that is okay.
Speaker 2: But that's where we then have to overlay our values
Speaker 2: and what we are trying to achieve. So I know
Speaker 2: that personally that's not going to be enough for me.
Speaker 2: So I need to do a little bit of working backwards.
Speaker 2: And if we work backwards cleanly, I work on about
Speaker 2: five percent, and I work on five percent because it's
Speaker 2: really conservative and I love to underpromise over deliver a
Speaker 2: beck of course, if I say, on average, you withdraw
Speaker 2: five percent from your retirement fund, each and every single year.
Speaker 2: And you want an income of sixty grand in retirement,
Speaker 2: that would mean that you need an investment portfolio of
Speaker 2: one point two million dollars.
Speaker 4: WHOA, So you.
Speaker 2: Need to take everything that the AFSA says with a
Speaker 2: grain of salt because that's on average across Australia. And
Speaker 2: obviously there's people with really high incomes and then there's
Speaker 2: people on lower incomes and that's all fine. But I
Speaker 2: would work out, you know, out a five percent or downrate,
Speaker 2: like how much do you want If it's sixty grand,
Speaker 2: you need one point two million dollars and do some
Speaker 2: maths yourself. You can just google it if you want
Speaker 2: to as well, and work backwards. If you want eighty grand,
Speaker 2: it's more like, have a look at that. So what
Speaker 2: do you need in super is very different, but how
Speaker 2: you get there is to me the most important part, right,
Speaker 2: So the first thing you want to do is set
Speaker 2: some goals. So working backwards, like you're already contributing to SUPER.
Speaker 2: And I'm going to use you as an example because
Speaker 2: you are a PAYG employee. So every month you get
Speaker 2: your payslip and on that pay slip, it says Beck.
Speaker 2: Here's how much cash we put in your bank account,
Speaker 2: and Beck, here's how much cash were put in your superannuation?
Speaker 2: Sure is that amount that is being contributed enough for you?
Speaker 2: Like you did some working backwards? How much did you
Speaker 2: need to contribute each and every single month. I've spoken
Speaker 2: about it on the podcast before. My favorite website is
Speaker 2: the money Smart website, and on that website is a
Speaker 2: compound interest calculator where you can put in the percentage amount,
Speaker 2: you can put in how much your plan on contributing,
Speaker 2: and you can play with the timeline and from that
Speaker 2: you can go, well, if I contributed five hundred dollars
Speaker 2: a month, this is how much i'd have at retirement.
Speaker 2: If I contributed ten dollars a month, this is how
Speaker 2: much extra I would have. You can play with that.
Speaker 2: Does that mean that you need to contribute more to
Speaker 2: super right now? Not necessarily, But it means that you
Speaker 2: know that the contributions that are currently being made are
Speaker 2: either going to help you get to retirement or you
Speaker 2: might need to do some more work. And that's really helpful,
Speaker 2: might be disengaging. You might be like, oh my gosh,
Speaker 2: but isn't it good to know now? And we can
Speaker 2: make a plan instead of getting to sixty seven and
Speaker 2: going hey, Bex, so you know how you thought that
Speaker 2: you'd just re hire? Yeah? No, Umm, I want to.
Speaker 4: Ask really quickly. This is mainly for my mummy, who
Speaker 4: is one of those people that unfortunately didn't know about
Speaker 4: X mom ibex mom. Now, I don't imagine she'll have
Speaker 4: much or if anything. Yep, and pensions still exists, right.
Speaker 2: Really good question if you're retiring with not enough superinnuation. Sure,
Speaker 2: the government in Australia is brilliant. There is a pension.
Speaker 2: You can apply for it. There's obviously whole heap of
Speaker 2: poops that you need to get through. You can't obviously
Speaker 2: have a massive investment portfolio, but they're no super They're
Speaker 2: going to look at your assets and they're going to
Speaker 2: work out whether you qualify for it. But it's definitely
Speaker 2: something to look into. And I think that that is
Speaker 2: privilege of living in Australia, right, Like, I am really
Speaker 2: glad that we support our economy and I'm really glad
Speaker 2: that we support people who are aging. The other thing
Speaker 2: I want to say is superanuation only became mandatory in
Speaker 2: nineteen ninety two. Yes, so when I was born in
Speaker 2: nineteen ninety one, my mom didn't have compulsory subranuation, So
Speaker 2: my mom in her thirties only started earning SUPER. You
Speaker 2: and I and a lot of our community have had
Speaker 2: the pleasure of you know, if I was born in
Speaker 2: ninety one and superannuation was mandatory by nineteen ninety two,
Speaker 2: by the time I was fourteen years old, in nine months,
Speaker 2: I was making supranuation. Yes, so I have a one
Speaker 2: up on my mom. Yes, so I got super from
Speaker 2: fourteen years and nine months. My mom did not, So
Speaker 2: I think that there's also this really big gap in this.
Speaker 2: This is why the biggest demographic of people becoming homeless
Speaker 2: is women in their sixties and seventies. And it makes
Speaker 2: sense because they didn't have a lot of contributions going
Speaker 2: into superannuation. A lot of them are, you know, deciding
Speaker 2: to leave their partners. That's the number one driver behind homelessness.
Speaker 2: It's not they're bad with money, it's not that they
Speaker 2: didn't have good careers or good jobs. It's not because
Speaker 2: they've done the wrong thing. It's actually because they are
Speaker 2: behind and that breaks my heart. But that's where I
Speaker 2: kind of want to talk about this as well and
Speaker 2: be like, Okay, cool, like you mentioned your mum, but
Speaker 2: also like, let's give that community a lot of grace
Speaker 2: as well, because they didn't have the things that we
Speaker 2: had now. Yes, of course, and I know that if
Speaker 2: I looked at your super, Beck, you would have contributions
Speaker 2: from your entire working life, like you may or may
Speaker 2: not have dipped into it during COVID and that's so fine,
Speaker 2: but you would have been making consistent contributions. And I
Speaker 2: can almost guarantee that you're in a better place right
Speaker 2: now than your mum at her age, and that's point privilege,
Speaker 2: and I wanted to call that out, so I do apologize.
Speaker 2: But then back on track, we were talking about working
Speaker 2: out how much money you need. If you want, you
Speaker 2: can make additional contributions and if it's right for you,
Speaker 2: have a chat to your payroll department about maybe signing
Speaker 2: up some salary sacrificing which means it comes out before tax,
Speaker 2: which is quite sexy. And this allows you to send
Speaker 2: extra money to your superannuation directly from your pay reducing
Speaker 2: your taxable income, which we like to Then also, do
Speaker 2: you know how Beck to make a contribution to your super,
Speaker 2: Like if you say, had an extra fifty bucks and
Speaker 2: you're like, I want to put into my super V.
Speaker 2: Do you know how to do that?
Speaker 4: It's pretty easy if you log in. They kind of
Speaker 4: make it very very clear. But I like it that
Speaker 4: if you don't even know where you're super EA is,
Speaker 4: you don't know where to start. I guess like googling
Speaker 4: is the best option. But if you have a better.
Speaker 2: No, you are absolutely correct. So the best place to
Speaker 2: start would be the ATO website because you can log
Speaker 2: in and it will show you where everything is and
Speaker 2: you can go from there. If you've forgotten your member number,
Speaker 2: you can contact the super fund that the ATO says
Speaker 2: you've got money with and go through that process. But
Speaker 2: once you're able to log in and whatnot, transferring post
Speaker 2: taxing gum so whatever is in your bank account, if
Speaker 2: you go, I'd love that to be a super contribution.
Speaker 2: It's a b pay like it is so simple. You
Speaker 2: could even save them as a payee so that if
Speaker 2: you were like, oh, V, I don't really know if
Speaker 2: I'm financially able to contribute more to my super, well,
Speaker 2: why don't you just set yourself up for success? Why
Speaker 2: don't you just add them as a payee on your
Speaker 2: bank account so that if ever you do decide to
Speaker 2: do that, you can then transfer the cash really quickly.
Speaker 2: Keep track of it though, because you'll claim it at
Speaker 2: tax time and you get the tax back on it.
Speaker 4: True, that's a bit of a money with so you
Speaker 4: can claim it it's before tax. You can't claim it.
Speaker 2: Well, you can't claim it because you wouldn't have paid tax, right,
Speaker 2: And that makes so much sense. We can't claim tax
Speaker 2: we didn't earn or didn't pay. It's a shame. I mean,
Speaker 2: people have tried, but it's not going to work. The
Speaker 2: last thing I want to say here back because I
Speaker 2: feel like I have yapped and the second you let
Speaker 2: me talk about a topic that I'm passionate about, she
Speaker 2: goes on and on. I would consider getting financial advice
Speaker 2: if you're really worried about this, so to make sure
Speaker 2: that your super aligns with your long term goals. If
Speaker 2: you haven't done all of the stuff that I've recommended,
Speaker 2: like you haven't sat down and been like, oh, well,
Speaker 2: how much should I contribute? Like this heaps of free
Speaker 2: content on superannuation on our podcast. There's heaps of free
Speaker 2: resources floating around the internet. The money Smart website is
Speaker 2: my favorite. But if you're super stressed about it, Like,
Speaker 2: get some financial advice and ensure that your super aligns
Speaker 2: with your long term goals. And one thing I will
Speaker 2: say is you can more often than not pay for
Speaker 2: your financial advice out of your superannuation. There you go.
Speaker 2: And I'm not saying that you should just pay for
Speaker 2: everything out of your super, but if it's advice that's
Speaker 2: putting you in the best possible position in my head,
Speaker 2: you're investing a portion of that into the advice, so
Speaker 2: you super count go further.
Speaker 4: That's actually a really good idea. I've got a few
Speaker 4: things to share, some got hit your tricks, Okay, but
Speaker 4: I feel like that's probably enough from us, right, Yeah.
Speaker 4: I feel like it's a really good place to leave it.
Speaker 4: Do you feel satisfied?
Speaker 2: Not yet. I really want to yap on and on
Speaker 2: about super but I feel like we should leave it
Speaker 2: there and leave some content for another day. Okay, Yeah, perfect,
Speaker 2: let's do that. Let's go have a little coffee. Absolutely, Beck.
Speaker 2: And the last thing I want to leave you with
Speaker 2: is it is not complicated, I promise. Like when you
Speaker 2: log in. Beck said it before, like, oh, my super
Speaker 2: fund's really easy to understand. You just log in They've
Speaker 2: got everything that you need. Like, it's not hard. It's
Speaker 2: often the mental challenge of just taking a leap and
Speaker 2: actually just getting it done. But I promise future you
Speaker 2: is going to thank you and then stick to the basics.
Speaker 2: So just check your balance, review your fees, maybe consolidate
Speaker 2: your accounts, and choose an investment strategy that aligns with
Speaker 2: your value. So keep it simple, stupid like that kiss methodology.
Speaker 2: I promise will pay dividends. And also while I'm here,
Speaker 2: I'm just going to say, don't forget to hit subscribe
Speaker 2: so that you never miss an episode. And it also
Speaker 2: really helps our show. And it also, I don't know,
Speaker 2: Loki should help with you staying on top of your
Speaker 2: money and making confident financial decisions. So like what a
Speaker 2: better call out.
Speaker 4: Absolutely, that's a great notification. That's why follow me you'd
Speaker 4: be rich. Yes, yes, that's a great motto. I love
Speaker 4: her to follow you.
Speaker 2: All right, thank you, thank you, all right, have a
Speaker 2: good day. We'll catch you on Friday.
Speaker 4: Bye, guys.
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