Speaker 1: My name's Tatasha Bamblet. I'm a proud First Nations woman
Speaker 1: and I'm here to acknowledge country t Glennan Ganya, nian
Speaker 1: Ar Kaka Yahi and beIN a Waka nian our gay
Speaker 1: in in Bina, yak rum Jar, Domenyama, Domagahawakaman, dam I, Milan,
Speaker 1: Mumma bang gadaboma in and now in Waka Ghana yakrum
Speaker 1: Jar water Nadaa. Hello, beautiful friends, we gather on the
Speaker 1: lands of the Aboriginal people. We thank acknowledge and respect
Speaker 1: the Aboriginal people's land that we're gathering on today. Take
Speaker 1: pleasure 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.
Speaker 3: Hello, and welcome to She's on the Money, the podcast
Speaker 3: that's here to help you get your finances on track
Speaker 3: this year. Welcome back to another episode in our summer
Speaker 3: STARTI series. I wanted to include this specific episode because
Speaker 3: when people tell me that they want to get their
Speaker 3: finances on track, the first thing that they say is
Speaker 3: usually girl friend I don't have any extra money right now,
Speaker 3: and honestly, in this economy that.
Speaker 4: Is really fair.
Speaker 3: Life is so damn expensive. Groceries are wild, rent is wild.
Speaker 3: Everything honestly feels very wild. But you know, superanuation is
Speaker 3: one of those rare parts of your finances where you
Speaker 3: can still put yourself in a better financial position even
Speaker 3: if you don't have any spare cash sitting around. You're
Speaker 3: already contributing through your employer. The opportunity here is making
Speaker 3: sure that that money is actually working as hard as
Speaker 3: it can for future you. And this episode is all
Speaker 3: about those zero dollar tweaks, the stuff that you can
Speaker 3: do by logging in, checking a few settings, and making
Speaker 3: sure that your super reflects you, your goals.
Speaker 4: And your timeline.
Speaker 3: And this is actually part one of a little part
Speaker 3: two series. So once you've listened to this, I'm actually
Speaker 3: going to link part two in the show notes so
Speaker 3: that you can keep going if you want to dive
Speaker 3: a little bit deeper into superanuation, my friend, If you
Speaker 3: are feeling behind, overwhelmed, or like retirement is a future
Speaker 3: you problem, this episode was literally made for you. Super
Speaker 3: can feel boring, I know, confusing, or even really easy
Speaker 3: to ignore, but it makes a massive difference over time.
Speaker 3: I promise, listen to the episode and you'll see two
Speaker 3: and few to you, my friend, They're going to be
Speaker 3: very glad that you cared about this today. So let's
Speaker 3: get into it now. You guys absolutely loved seeing how
Speaker 3: you're super compared to other Australians, which I think is
Speaker 3: really fun because I think so many of us we
Speaker 3: just google it once six years ago and feel a
Speaker 3: little bit behind and then never think about it again. Yeah,
Speaker 3: we actually collected the data from our own community over
Speaker 3: the last twelve months.
Speaker 4: So I thought that we could just start by sharing that.
Speaker 3: And I'm really excited about this because I feel like
Speaker 3: this data is a little bit more gritty, a little
Speaker 3: bit more comparable to like where.
Speaker 4: We are as listeners.
Speaker 3: Like if you think about our average listener and the
Speaker 3: average person or they're not actually the average Australian, Like
Speaker 3: the average Australian maybe doesn't care so much about their
Speaker 3: super doesn't care about finance, is probably not trying to
Speaker 3: put themselves in the best possible position. So here's a
Speaker 3: little bit of a snapshot from our shees on the
Speaker 3: Money community and I've just done by age bands so
Speaker 3: I've copied what the superannuation companies do so that you
Speaker 3: could like compare it to your super company if you
Speaker 3: wanted to later. And we'll obviously use this information to
Speaker 3: create like a social time so you can go back
Speaker 3: to it and like see it visually, because it's like
Speaker 3: not the same as just having it.
Speaker 4: Read out to you.
Speaker 3: Right, So, if you're between twenty and twenty four in
Speaker 3: the She's on the Money community, the average is twenty
Speaker 3: six thousand dollars, and then the median is twenty two
Speaker 3: thousand dollars. Yes, So just to quickly talk about why
Speaker 3: I as a statz nerd. I don't know if everybody
Speaker 3: knows this, but way back when I was at university,
Speaker 3: I studied statistics. It's one of my mind is because
Speaker 3: I am just a really big nerd. I always talk
Speaker 3: about the average and then the median. I actually think
Speaker 3: that the median is a better reflection. But most people
Speaker 3: talk about the average because you go, oh, Vey, what's
Speaker 3: the average, It's like, well, that's good, But what happens
Speaker 3: with the averages? You take every single number, So say
Speaker 3: there's like one hundred people in our sample, there's actually thousands,
Speaker 3: But say there's one hundred people, you add all of
Speaker 3: their numbers together and then you divide it by one hundred,
Speaker 3: so you're getting like the lowest of the low and
Speaker 3: then the highest of the high. And what happens with
Speaker 3: that is if we're all similar, probably not a big issue.
Speaker 3: But if you've got someone who has you know, they're
Speaker 3: twenty one and they for some reason have a heap
Speaker 3: of money in their superannuation and they've got millions. And
Speaker 3: then you also have people who maybe you know, have
Speaker 3: never worked a day in their life and they're in
Speaker 3: the sample, so they've got zero dollars. We're taking those
Speaker 3: numbers into consideration, and if I ask you, do you
Speaker 3: feel like that's comparable to your situation, I think you
Speaker 3: go probably not. So the median is the number that
Speaker 3: just sit smack bang in the middle. So it's not
Speaker 3: like adding them all together and dividing them. It's going, okay, cool,
Speaker 3: if there's one hundred people, we're going to fifty, Like
Speaker 3: what is that fiftieth number? And that is the person
Speaker 3: that's sitting in the middle of all of that. So
Speaker 3: they're not the highest of the high, they're not the
Speaker 3: lowest of the low. That's where a lot of us
Speaker 3: probably want to see comparable numbers because we go, what's
Speaker 3: you know, sitting smack bang in the middle. You know,
Speaker 3: when you think of a bell curve, it's like the
Speaker 3: bell curve number, it's like the one at the top
Speaker 3: of that. So often you will see the average is
Speaker 3: often higher than what the median is. And that's why
Speaker 3: I like to work off median instead of an average,
Speaker 3: because I think an average can not be as accurate anyway.
Speaker 3: That's a little bit of a statistics side note. If
Speaker 3: you're between the age of twenty five and twenty eight,
Speaker 3: the average is forty three thousand, and the median is
Speaker 3: thirty four thousand. Twenty nine and thirty two average is
Speaker 3: now ninety four thousand, whereas the median is eighty eight thousand,
Speaker 3: five hundred. Thirty three to thirty seven average is one
Speaker 3: hundred and seven thousand, and then the median is one
Speaker 3: hundred and six thousand, So we're actually getting a bit
Speaker 3: closer with that one, but then it does dive away.
Speaker 3: At thirty eight to forty one, the average is one
Speaker 3: hundred and seventy three thousand, five hundred, and the median
Speaker 3: is one hundred and fifty five thousand, and then between
Speaker 3: the ages of forty two and forty six, the average
Speaker 3: is two hundred and thirty thousand, and then the median
Speaker 3: is two hundred thousand.
Speaker 4: But can you see why.
Speaker 3: Yes, I probably would prefer if like comparison is the
Speaker 3: thief of joy, right, Oh, so, like we need to
Speaker 3: also say that because here I am being like, here's
Speaker 3: some numbers to compare yourself to, but also don't compare yourself,
Speaker 3: Like we want to be on track and we want
Speaker 3: to feel like we can compare ourselves.
Speaker 4: But that's where I go.
Speaker 3: I'd probably be comparing myself to the media and not
Speaker 3: necessarily the average usually because it's more accurate, but also
Speaker 3: it makes me feel better about myself.
Speaker 5: Absolutely, as I'm looking at this, I'm like, Okay, there's
Speaker 5: some numbers that I think I need to get on
Speaker 5: top of some things.
Speaker 4: If you're listening to this and you're.
Speaker 5: Kind of like, worry, just know that that's why you're
Speaker 5: here and we can fix this.
Speaker 3: But like it wasn't that cool, because like the people
Speaker 3: that are listening to this show, they actually just want
Speaker 3: better for themselves. Like even if you're like, oh, I
Speaker 3: don't stuck up at all. Think about all the people
Speaker 3: that aren't even considering that, and the fact that you
Speaker 3: have so much time ahead of you to like fix
Speaker 3: that or put yourself in a different.
Speaker 4: Position, like what a position to be in?
Speaker 5: Exactly, you've already maken the right first step.
Speaker 3: I mean, the hardest thing is to listen to me,
Speaker 3: so like you're already past.
Speaker 5: It can confirm, no, just kidding, So what does this
Speaker 5: tell us?
Speaker 3: Okay, So when looking at this information for our community specifically,
Speaker 3: it says that the biggest jump is in your lefe
Speaker 3: twenties to early thirties, and if you look at it,
Speaker 3: supernuation balances actually almost double, like they more than double.
Speaker 3: And this is the magic of compound interest. So you
Speaker 3: know how, I'm like, oh, it takes time back, Like
Speaker 3: you know, you've started your shares's account and you're like
Speaker 3: investing consistently, but you wouldn't have seen it just double.
Speaker 3: But that starts to kick in after ten ish years.
Speaker 3: So like compound interest, its power is in the long term.
Speaker 4: So after ten.
Speaker 3: Plus years, that's where you really start to see stuff doubling.
Speaker 3: And if you think about late twenties, you've probably had
Speaker 3: nearly ten years of really solid contributions late thirties. You know,
Speaker 3: not all of us were, you know, contributing for the
Speaker 3: start of our twenties.
Speaker 4: So that kind of makes sense.
Speaker 3: Like that data makes sense, and by mid thirties, most
Speaker 3: people are actually hitting six figures like and that's really
Speaker 3: normal and that's really exciting. Then in your forties, if
Speaker 3: we kind of go down the data set a little bit,
Speaker 3: the gap between average and medium, it really does widen.
Speaker 3: And I pointed that out when I was reading it out,
Speaker 3: but that's literally life events. In your forties, that's when
Speaker 3: we start to see the real impact of you taking
Speaker 3: a career break because you've had uneven contributions. So whether
Speaker 3: you took time off for yourself, whether you took time
Speaker 3: off to have kids, that's when we really start to
Speaker 3: see the difference.
Speaker 4: And you saw that gap.
Speaker 5: Gotch you Okay, God, that's scary. It's really good to
Speaker 5: see that ease.
Speaker 3: But like data is telling us a story, and you
Speaker 3: know what we can do with stories.
Speaker 5: Learn from that absolutely, and this is why soups putting
Speaker 5: is so important. But that's a story.
Speaker 3: That's another conversation and a whole other episode where we
Speaker 3: will do.
Speaker 5: Okay, so if I want to sort my super which
Speaker 5: I do. What's the first thing I should be doing.
Speaker 3: I think I've said it on the show before, and
Speaker 3: it's not the sexiest way of putting it, but like
Speaker 3: we're going to do a hygiene check. Ye, like we're
Speaker 3: just going to clean house, right, So that hygiene check
Speaker 3: means we log into our superannuation account.
Speaker 4: I want you to know your balance.
Speaker 3: I want you to know how many fees you're paying
Speaker 3: and whether you're comfortable with that.
Speaker 4: I want you to have a look at whether you
Speaker 4: have insurance or not.
Speaker 3: And if you don't think about getting it, I cannot,
Speaker 3: Like I cannot drive home the importance of insurances. Don't
Speaker 3: get me wrong, it's going to look different for everybody.
Speaker 3: If you're in your early twenties and you're still lucky
Speaker 3: enough to live at home, you don't have any debts,
Speaker 3: you probably don't need a lot of insurance. But if
Speaker 3: you're like me, and you know, I'm thirty four, that's terrifying,
Speaker 3: and I have a kid, and I have a husband
Speaker 3: and have a mortgage. If I wasn't here anymore, I've
Speaker 3: just lumped a whole heap of responsibility on someone who
Speaker 3: can't pay for that right, So we want to make
Speaker 3: sure that that's okay. And then the last thing I
Speaker 3: want you to look at in your subernuation account is
Speaker 3: your portfolio type.
Speaker 4: So what's your risk appetite?
Speaker 3: Are you in a balanced fund? Are you in a
Speaker 3: high growth fund? Are you in a conservative fund? If so,
Speaker 3: why have you done their questionnaire? Have you looked at
Speaker 3: how much impact that can have over the long term
Speaker 3: of not doing it? Because this is going to give
Speaker 3: you a really good idea of just or are you
Speaker 3: starting from? Because like how many of us just have
Speaker 3: our heads in the sand about super Maybe you know
Speaker 3: the number because you recently did your tax return, but
Speaker 3: a lot of us also have no idea.
Speaker 5: Yes, that's so true. So once we familiarize ourselves with
Speaker 5: the numbers, what do we do next?
Speaker 4: All right?
Speaker 3: So what I want you to do and I have
Speaker 3: mentioned this tool a number of times on our show before,
Speaker 3: but I want you to use your super Comparison tool,
Speaker 3: which is a free tool provided by the Australian government.
Speaker 3: So it's like not bias, it's not built by a
Speaker 3: super company, like they're not trying to sell you anything.
Speaker 3: It's just going to do the job right and to
Speaker 3: get to it. You go to MyGov, you go to
Speaker 3: the ATO portal, you click super and it will.
Speaker 4: Take you through to your super comparison tool.
Speaker 3: You can also just Google it, but personally I like
Speaker 3: going through the mygove platform because it means you would
Speaker 3: have had to see what your balance was to begin with.
Speaker 4: I'd avoid it.
Speaker 3: And then this tool is going to line up all
Speaker 3: the my super products in the country and it's going
Speaker 3: to show you a few things.
Speaker 4: So it's going to show.
Speaker 3: You the net returns are over five and then over
Speaker 3: ten years. It's going to are you what you'd have
Speaker 3: if you'd been in each fund with a fifty k balance.
Speaker 3: It just like shows you the differences and which funds
Speaker 3: have failed.
Speaker 4: The upper performance test.
Speaker 3: Okay, to me, that's really important because it's kind of
Speaker 3: like a hygiene factor. Again, Can we just make sure
Speaker 3: we're not in a fund that failed, like, because then
Speaker 3: maybe I would be very very interested in changing.
Speaker 2: Yeah.
Speaker 3: I can't give you advice and say get out of
Speaker 3: that fund, because if for some reason aligns with your values,
Speaker 3: maybe you do you. But like I know that if
Speaker 3: my fund failed the performance test, I'd be.
Speaker 5: Out ah ah ah, But no advice to give it
Speaker 5: just read between the lines. Okay, let's go on a
Speaker 5: really quick break because it's a lot to take in
Speaker 5: it is, and we'll dive back in on the food side.
Speaker 3: All right, we are back back and we are talking
Speaker 3: all things supernuation, and I feel like I have just
Speaker 3: yapped and yapped and yapped. And the thing that I
Speaker 3: like with your super comparison tool is it compares like
Speaker 3: for like options. Like I don't want you to look
Speaker 3: at different things that are being put in front of
Speaker 3: you for marketing purposes. So we know that there are
Speaker 3: a lot of other comparison websites where if you google
Speaker 3: like compare the best supers, it's very likely to show
Speaker 3: you the ones that the superannuation companies are paying for
Speaker 3: and then not show you the super companies that are
Speaker 3: doing well but haven't paid for that type of marketing.
Speaker 3: So don't compare a conservative option either to like a
Speaker 3: fund with a growth option. So make sure that if
Speaker 3: you are comparing, we're just doing apples to apples. So
Speaker 3: that's why you before went and worked out what your
Speaker 3: risk profile was, because like, let's pretend beck your growth
Speaker 3: risk profile. Why are we looking at conservative options?
Speaker 5: Gotcha?
Speaker 3: Like just filter it by growth, like be like, I
Speaker 3: know I'm growth, so I'm only going to look at
Speaker 3: the funds growth options and then I'm going to look
Speaker 3: at all of the funds and compare their growth options.
Speaker 3: So I'm getting apples with apples instead of going, oh, well,
Speaker 3: you know, I compared the Australian super conservative to the
Speaker 3: UNI super growth, Like what if those aren't actually comparable.
Speaker 3: They're not on the same page, Like they're for different
Speaker 3: people and different things. So if you have done your
Speaker 3: risk profile and you are conservative, we're only looking at
Speaker 3: conservative options. If you are high growth, we're only looking
Speaker 3: at high growth options.
Speaker 4: And do you know what that does?
Speaker 3: Makes your life six million times easier because less options,
Speaker 3: less worry.
Speaker 5: Absolutely statistically six million times easier.
Speaker 3: So I always throw these things around, like where we
Speaker 3: talk about growth and conservative, So I would say the
Speaker 3: most common term in the industry when it comes to
Speaker 3: risk profile because it's like the default is balanced option.
Speaker 3: So you might have heard of that before where people go, oh,
Speaker 3: that's the superanuation balanced option, and that I feel like
Speaker 3: people are attracted to the word balanced.
Speaker 5: Yeah feel safe, right, It does feel safe.
Speaker 3: Yeah, but it might not be reflective of your goals
Speaker 3: and your values, right, but that typically only holds or
Speaker 3: I should say holds not only holds, but that holds
Speaker 3: sixty to seventy percent growth assets.
Speaker 4: What does that mean?
Speaker 3: Yeah, okay, if you're pie chart which is one hundred percent,
Speaker 3: sixty to seventy percent will be shares. The rest will
Speaker 3: be capital stable assets, which are things like term deposits
Speaker 3: and cash and bonds.
Speaker 4: I see, because if.
Speaker 3: You look at a growth option, that pie chart becomes
Speaker 3: ninety percent shares, yeah, and then like ten percent more
Speaker 3: stable assets. And like they're different for every single option,
Speaker 3: So don't go, oh Victoria said that a growth option
Speaker 3: would have ninety percent. It's actually different per serrounuation company.
Speaker 3: So the way that and I'm just using these as
Speaker 3: examples so that you don't go, what are you talking about?
Speaker 3: Like if you look at Australian super for example, their
Speaker 3: percentages in their pie charts are very different to a
Speaker 3: unisuper or arrest or a host plus. They're like, they're
Speaker 3: just very different because they all have different methodologies of
Speaker 3: ascertaining what is like the best breakdown. But on average,
Speaker 3: I would say growth options like eighty to ninety percent
Speaker 3: growth assets. Sure, And if that aligns with your values.
Speaker 3: That's all we looking at.
Speaker 5: Okay, got you?
Speaker 3: So, Beck, If you came out as growth and hypothetically
Speaker 3: your growth, your returns might look higher, but that actually
Speaker 3: just might be the risk profile, not your fund doing
Speaker 3: a better job. You might go, oh, well, I came
Speaker 3: out as conservative, and then all of a sudden, I'm
Speaker 3: saying better returns in the growth one. Well yeah, you're
Speaker 3: always always, but like the more risk you take on,
Speaker 3: the higher the returns.
Speaker 4: High risk curry war exactly.
Speaker 3: So usually when you look at it, it might go, oh,
Speaker 3: like the you know, conservative portfolio is returning six percent
Speaker 3: on average, you know, the medium growth is returning like
Speaker 3: seven or eight percent, and then the like high growth
Speaker 3: is nine or ten percent?
Speaker 4: You got, but why I want nine or ten?
Speaker 3: Well, then maybe you need to go back to your
Speaker 3: risk profile if you don't like the six percent option
Speaker 3: you came out with, so like.
Speaker 4: Work out what works for you?
Speaker 5: Sure, sure, okay, and what next?
Speaker 3: Okay, so boring, but just understand the fees boring now
Speaker 3: boring always.
Speaker 4: Like it was never good.
Speaker 3: And as a financial advisor I used to have to
Speaker 3: do this forklient so and I would always be like, look,
Speaker 3: like I didn't like doing it either, because this isn't
Speaker 3: the sexy part of like super because I should know
Speaker 3: about my growth. Oh ees boring, But also on those also,
Speaker 3: I need you to know what you're paying to make
Speaker 3: sure that you're not getting stooged. And the reason that
Speaker 3: we care about these things is because it eats into
Speaker 3: your growth. So like, if you're paying more for something,
Speaker 3: you're getting less in return. Or I do say, often
Speaker 3: pay peanuts, get monkeys. But if you're paying more fees
Speaker 3: than necessary for the same return as another fund, maybe.
Speaker 4: You want to switch, right.
Speaker 3: But also I would say that most of the really
Speaker 3: big superannuation funds fees are average, Like I don't think
Speaker 3: I've ever seen one that I'm like, oh my god,
Speaker 3: Like that's so awful. I would never go with that
Speaker 3: super company because their fees are astronomical. Right, They're all
Speaker 3: going to be like semi similar, but I want you
Speaker 3: to understand them. Right, So every single fund will charge
Speaker 3: two different types of fees on average, So like, please
Speaker 3: don't again bucket me, but this is what usually happens
Speaker 3: in most funds. You've got admin fees and then investment fees,
Speaker 3: and admin fees cover the administration of your account, and
Speaker 3: then investment fees are going to be different based during
Speaker 3: your risk profile, because if you're more risky, we're paying
Speaker 3: more because we're investing more. If you're more conservative, they're like, well,
Speaker 3: we're not going to charge you through the no, so
Speaker 3: something that you're not really using, that's so nice, right,
Speaker 3: Well yeah, let's pretend it's nice. So an admin fee,
Speaker 3: I would say, is usually a fixed It's either a
Speaker 3: weekly or monthly amount is what they will report on.
Speaker 3: So it might be like your admin fee is a
Speaker 3: dollar fifty a week, or it might be seventy eight
Speaker 3: dollars a year. And then your investment fees, yes, but
Speaker 3: also like it just is what it is. An investment
Speaker 3: fee is usually actually a percentage of your balance. So
Speaker 3: you know, if they say, oh, your investment fee, and
Speaker 3: I would say one of the most common is zero
Speaker 3: point six percent, you go, well, what's that mean fee?
Speaker 3: It means if you've got one hundred thousand dollars in
Speaker 3: your cubernuation account, you will pay six hundred dollars each
Speaker 3: year for an investment fee. Okay, and that would extrapolate
Speaker 3: out as an ex financial advisor is six percent good bad.
Speaker 3: I don't really have an opinion, but if it got
Speaker 3: close to one percent.
Speaker 4: I would be quite wary. Like the closer to one
Speaker 4: percent it is, the more I'm like, oh, like, what
Speaker 4: are you doing to add extra value? Because I'd say six.
Speaker 3: Percent is pretty normal in the industry, like because people
Speaker 3: are always like is that good?
Speaker 4: Is it bad?
Speaker 3: And I'm like, it's all relative, yeah, based on the
Speaker 3: value you're getting out of something, right, But people love numbers.
Speaker 3: So if I said, you know, and you're looking at
Speaker 3: your investment fees, you might go just as zero point
Speaker 3: six per cent, what's that even mean? I would say
Speaker 3: that's pretty average. If it got closer to like a
Speaker 3: full one percent, I'd be like, oh, what are you
Speaker 3: paying for? Like that's more of a like very active
Speaker 3: managed fund fee. And these fees you can kind of
Speaker 3: compare to like an ETF and they would usually be
Speaker 3: I would say, relatively comparable. And why are they so cheap?
Speaker 3: Because that's actually cheap for investment. It's because they're doing
Speaker 3: it on mass, right, Like they're doing it for hundreds
Speaker 3: of thousands of people in this fund, so they get
Speaker 3: to charge you a lower price point. If you went
Speaker 3: to an individual to do that, it would be much
Speaker 3: much more expensive. Also, in the your super tool, it's
Speaker 3: going to show you a total annual fee, so like
Speaker 3: that's just the way they report it, but it is
Speaker 3: coming from those two fees combined. It will show you
Speaker 3: a total annual fee for that fifty thousand dollars example,
Speaker 3: or that fifty thousand dollars balance, which I think is
Speaker 3: a pretty handy benchmark for each like different fund. And
Speaker 3: then you know, just again for contexts industry funds, I
Speaker 3: would say point six percent is pretty normal, but zero
Speaker 3: point five two point eight I would say is really normal.
Speaker 3: Sure between that, retail funds can be often more than
Speaker 3: one percent, which I would be weary of, and I'm
Speaker 3: consistently wary of because you know, you might go, what's
Speaker 3: the difference between point six percent one percent? Victoria, Well,
Speaker 3: over the long term really comes up thousands of dollars,
Speaker 3: Like it's not. It might be like, you know, we
Speaker 3: just talked about seventy eight dollars a year. You might go, whatever,
Speaker 3: Like it's just coming out of my super I'm not
Speaker 3: even seeing it. But from little things, big things grow,
Speaker 3: I should care about this. If it's over one percent,
Speaker 3: I'm like a bit wary. Yes, I can't give advice,
Speaker 3: but like, if I'm a bit weary.
Speaker 5: Read what are you think? You know exactly exactly shocking question.
Speaker 5: What comes next?
Speaker 3: So the next thing you're going to do is check
Speaker 3: opra's and your performance test. Now you've probably heard of
Speaker 3: UPRA before. I think like that gets thrown around a lot,
Speaker 3: but what the heck is UPRAH. It's the Australian Prudential
Speaker 3: Regulation Authority or does that actually mean though? So they're
Speaker 3: kind of like the big dogs, but they're an independent.
Speaker 3: So they're an independent and they look at banks, credit unions,
Speaker 3: they look at building societies, they look at insurers and
Speaker 3: most members of the superannuation industry and they supervise them.
Speaker 3: So they make sure that they're doing the right things
Speaker 3: and basically ensuring that these institutions they maintain financial soundness
Speaker 3: is what it says on their website. Just making sure
Speaker 3: like if they're making money, it's going to the right places,
Speaker 3: making sure that if they promise their customers something, they
Speaker 3: actually do it. Making sure that you know, they're stable
Speaker 3: and they're actually good for their consumers.
Speaker 4: So APRA is for us. It's not like HR.
Speaker 3: At Work, which is actually right, you know, like a unionization. Yeah,
Speaker 3: UPRA is actually like holding them accountable.
Speaker 5: Cool.
Speaker 3: So every single year OPRA runs like benchmarking tests on
Speaker 3: the mysuperproducts, so they go, all right, comparison time, big job.
Speaker 3: But if your fund fails, they have to write to
Speaker 3: you and say hey, beck, So like they don't apologize,
Speaker 3: which is rude, but they will say, hey, we failed
Speaker 3: the test. So if they fail at one time, it's
Speaker 3: a warning, like an official warning. Two consecutive fails means
Speaker 3: that that fund is not allowed to take on any
Speaker 3: new members.
Speaker 5: Oh how do they? How do you fail?
Speaker 4: Like you just like you.
Speaker 3: Don't meet your requirements, so you don't meet your obligations.
Speaker 3: You don't you're not doing what you said you were
Speaker 3: going to do financially. Sound like I see someone imagine
Speaker 3: if that was on Tinder. Like I just think that
Speaker 3: if people on Bumble could get barred, it would.
Speaker 4: Be a better life. Oh absolutely for everybody.
Speaker 3: Right, And then every single August publishes this full list,
Speaker 3: So like every single August, I'm.
Speaker 5: Really ratten on people.
Speaker 3: Oh yeah, like I'm here for the drama. Like, don't
Speaker 3: get me wrong, I have publicly said.
Speaker 4: Before I'm nosy.
Speaker 3: I want to know, like I need to know did
Speaker 3: you fail if you did judging, and then if your
Speaker 3: fund is underperforming, because that's not very sexy, a short
Speaker 3: list of alternative funds that actually match your risk profile
Speaker 3: and show stronger long term nets is going to be suggested.
Speaker 4: Oh so that's kind of good.
Speaker 5: That's painful.
Speaker 4: Then I want you to do those. Yeah. I cannot
Speaker 4: drive home the importance of insurance. I just can't.
Speaker 3: But before moving, I want you to check your insurance
Speaker 3: cover because sometimes you move and you go, oh, the
Speaker 3: performance is whack. I don't want to be here anymore.
Speaker 3: But you had some really good default insurance. And lots
Speaker 3: of people unknowingly cancel income protection or TPD while they're
Speaker 3: rolling over, and then they lose it because they can't
Speaker 3: get it in their new fund because they don't meet
Speaker 3: the criteria. So that's where sometimes, even when I was
Speaker 3: a financial advisor, I would like recommend this is a hypothetical.
Speaker 4: I'd be like, oh, beck, I.
Speaker 3: Actually want you to have two super funds. Like that
Speaker 3: goes against a lot of the advice that I give
Speaker 3: because double fees, whatever, But you're going to keep like
Speaker 3: a really minimal amount of money in this first super
Speaker 3: fund that basically doesn't perform. But the reason we're keeping
Speaker 3: the money there is to pay for the insurances on
Speaker 3: that account because we can't get rid of them. And
Speaker 3: then we're going to put all of our money in
Speaker 3: this better fund that is actually going to perform, So
Speaker 3: you would keep both In that instance, the best option,
Speaker 3: or I would say the safest way to do this
Speaker 3: is open the new fund first, because just opening the
Speaker 3: new fund.
Speaker 4: Doesn't cancel your old one.
Speaker 3: We would hopefully rep the insurance if you need it,
Speaker 3: and then roll your balance over and update your employer
Speaker 3: payroll details. Then but if you can't replicate your insurance
Speaker 3: because it hasn't been accepted or they say, oh, like sorry,
Speaker 3: we don't offer that, at.
Speaker 4: Least you haven't burnt the bridge to begin with.
Speaker 3: Yeah, we can actually move super funds without deleting the
Speaker 3: other one, do you know what I mean? Like, we're
Speaker 3: not telling the other one that we're already seeing someone
Speaker 3: new And.
Speaker 4: That's okay, cheeky okay.
Speaker 5: So once I've checked performance, what do I do next?
Speaker 4: All Right?
Speaker 3: So I've jumped up and down about this, but so
Speaker 3: many people, and most people in Australia default to balanced
Speaker 3: but that's not always right for them. They default to
Speaker 3: balance because you know, when you're filling out your superforms
Speaker 3: when you get a new job, it often has these
Speaker 3: little like italic words below your superannuation choice that say
Speaker 3: balanced is the most popular option or something to that effect.
Speaker 3: And like, if you don't know what you're talking about,
Speaker 3: which I didn't know what I was talking about when
Speaker 3: I was doing these before I was an advisor.
Speaker 4: I was just like, Okay, well I guess so with that.
Speaker 3: Yeah, it doesn't feel like a big decision in that moment,
Speaker 3: right because like the biggest and hardest thing about that
Speaker 3: whole process for me was like, well, what is my TFN?
Speaker 4: How do I go and find that? Is it in
Speaker 4: my email?
Speaker 3: You know, like I'm not really thinking about it, but
Speaker 3: that makes a massive difference. So let's talk a little
Speaker 3: bit about growth versus balanced versus like a conservative account.
Speaker 3: I want you to imagine the pie chart, because I
Speaker 3: feel like everyone can imagine a pie chart, right, I
Speaker 3: love a pie chart. One hundred percent. In a pie
Speaker 3: chart growth option, it's going to have eighty to ninety
Speaker 3: percent growth options.
Speaker 4: What does that mean?
Speaker 3: Eighty to ninety percent of the money in your superannuation
Speaker 3: is going to be directly invested into shares. Whether that
Speaker 3: is Australian shares or international shares, it will be different
Speaker 3: per fund. But then between twenty or ten and twenty
Speaker 3: percent of that fund is going to be in more
Speaker 3: conservative assets. So it's going to maybe be sitting in cash,
Speaker 3: it might be sitting in a term deposit, it might
Speaker 3: be in a bond. But these are more conservative options.
Speaker 3: And now the thing I want you to remember is
Speaker 3: just the percentages, because I think a lot of people
Speaker 3: just assume when I say growth assets, you think it's
Speaker 3: more risky shares.
Speaker 4: It's not. It's just a higher saturation of shares.
Speaker 3: So if we jump back down and compare it to
Speaker 3: like the balanced option, like which is the default, and
Speaker 3: we look at our high chart again, sixty to seventy
Speaker 3: percent are quote growth assets, So sixty to seventy percent
Speaker 3: of that is made up of shares. They're the same
Speaker 3: shares that are in the growth asset. You just hold
Speaker 3: more when you're growth and less when you're balanced. So
Speaker 3: like you would just carry more cash if you're balanced
Speaker 3: and have more of a percentage of assets that aren't
Speaker 3: performing as well. And I'm not saying that that's a
Speaker 3: bad thing. But I think a lot of people assume, oh,
Speaker 3: if I go growth, the assets.
Speaker 4: Are more risky. It's not.
Speaker 3: It's exactly the same ETFs. It's exactly the same shares.
Speaker 3: Like you know if Australian super has picked all of
Speaker 3: those shares for their portfolios. Well, in the balanced option
Speaker 3: you get seventy percent and in the growth option you
Speaker 3: get ninety. Do you know what I mean? So it's
Speaker 3: more about, well, if you're investing for the future, and
Speaker 3: you're like, well, I'm going to be in it for
Speaker 3: thirty plus years, how.
Speaker 4: Comfortable are you?
Speaker 3: And you need to ask yourself this question, how comfortable
Speaker 3: are you with thirty percent of your portfolio just sitting
Speaker 3: in like cash and bonds that perform less. Like I
Speaker 3: think when you start to contextualize that, people go, oh,
Speaker 3: growth isn't as scary, And like, I hate the terminology
Speaker 3: around investing because often it seems scary, right, aggressive portfolio
Speaker 3: some companies, you know, when.
Speaker 5: They call it that, it's like, that's scary.
Speaker 3: I don't want to exactly, So we probably aren't going
Speaker 3: to pick that just because of the naming. Then yes,
Speaker 3: So when you go back to a growth option higher risk,
Speaker 3: Like we need to really outline that the more risk
Speaker 3: you take, the more returns.
Speaker 4: You might get.
Speaker 3: And more often than not, I would see a growth
Speaker 3: portfolio being more suitable for younger members who don't touch
Speaker 3: their super for years. So if you're sixty, I'm probably
Speaker 3: going to be like, oh, I'd stick clear of that
Speaker 3: because like, the market goes up and down, and do
Speaker 3: we want to be part of that. But when you're young,
Speaker 3: you have time on your site, so I would be
Speaker 3: expecting more ups and downs along the way, but better
Speaker 3: long term compounding.
Speaker 5: Yes.
Speaker 3: So then the balanced option. We've talked about this before.
Speaker 3: This is usually the default. This is just what you
Speaker 3: fell into to begin with. And if you've never looked
Speaker 3: at your super, I can almost guarantee that this is
Speaker 3: what you're in. Moderate volatility, moderate returns. We're not complaining,
Speaker 3: you're still getting a return. Is it what you want
Speaker 3: it to be? It's totally fine.
Speaker 4: If you're risk averse, like you might look at it
Speaker 4: and be like, be I'm comfortable with that. I'm not
Speaker 4: saying it's bad. I'm literally not.
Speaker 3: I'm just saying, let's make sure you have the education
Speaker 3: so you can make the right decision for you, because
Speaker 3: in retirement it could mean hundreds of thousands of dollars
Speaker 3: of difference. But if you've got thirty plus years ahead,
Speaker 3: you might be leaving some cash on the table, right Okay, okay,
Speaker 3: And like I don't want you to leave cash on
Speaker 3: the table. No, Then there's the conservative option, and we're
Speaker 3: going back to our pie chart again. But of that
Speaker 3: pie chart, thirty to forty percent of your money that
Speaker 3: is in your superannuation will be invested into the share market.
Speaker 3: The rest is conservative options, so low volatility, low return.
Speaker 3: I would say it's a much safer option when you're
Speaker 3: closer to retirement because your risk and reward profile actually
Speaker 3: changes over your lifetime. So like right now, Beck, I
Speaker 3: would assume that you're probably sitting more growth just knowing you,
Speaker 3: and the closer you get to retirement, you might drop
Speaker 3: back to a balanced and then you know, when you're
Speaker 3: sixty or so, you might grow to conservative because it's
Speaker 3: not so much about growing your wealth whence you're sixty,
Speaker 3: it's more about conserving it and just like locking it in,
Speaker 3: loading it in, making sure that it's there for the
Speaker 3: long term. So it's I would say safer if you're
Speaker 3: closer to retirement and you want to protect what you've built.
Speaker 3: But it probably like and this is stereoti typing again,
Speaker 3: because I could never give you advice. It's probably not
Speaker 3: ideal if you're like twenty five and you're going to
Speaker 3: access your super for thirty five years. Yeah, I see,
Speaker 3: But the superannuation company is not going to call you
Speaker 3: up and be like, hey, beg, we saw you picked this.
Speaker 4: You sure like.
Speaker 3: They're not going to do that, because they're just going
Speaker 3: to go, okay, well that's what she picked and like
Speaker 3: what she wants exactly, but you might not know what
Speaker 3: you don't know. Yes, So sequencing risk kind of matters
Speaker 3: closer to retirement because being too aggressive close to retirement
Speaker 3: could mean you go into a market dip and then
Speaker 3: you have to wait another five or six years before
Speaker 3: you can actually retire.
Speaker 4: And I just I don't want.
Speaker 3: That for you, you know, And like even a one percent
Speaker 3: higher return, so you might go, oh, well, you know,
Speaker 3: I'll just pick one, Like the more conservative one is
Speaker 3: like only one percent difference, Like who cares over thirty years, beck,
Speaker 3: that's thirty five percent of your supernuation balance like that
Speaker 3: that's a lot. Yeah, but that's thirty five percent more
Speaker 3: returns that you would have, So you've kind of got
Speaker 3: a context realize it, because like one percent today, I
Speaker 3: don't care if you don't pay me one percent. Thirty
Speaker 3: five years later, I've lost thirty five percent. And you
Speaker 3: know what, if I see something that's thirty five percent off,
Speaker 3: I'm like, that's a good deal.
Speaker 5: Absolutely, it's a big chunk of money, right.
Speaker 3: And then I also want to talk about the power
Speaker 3: of time, because we've just like touched on retirement and
Speaker 3: like maybe not picking a more aggressive option when you're
Speaker 3: closer to retirement, but if you're younger, like, you've got
Speaker 3: time on your side, and I can't drive that fact
Speaker 3: home any harder than I do. So for example, if
Speaker 3: you're like, let's say you're twenty five, and you've got
Speaker 3: a balanced portfolio right now, so you're earning let's just
Speaker 3: say six percent, but the growth option in the same
Speaker 3: super fund, so you're not changing funds, you're just like
Speaker 3: going in and flicking over to growth that's seven percent,
Speaker 3: So like you would go via, that's not much of
Speaker 3: a difference, Like kind of who cares over thirty five years.
Speaker 3: As I was saying, one percent different compounds to thirty
Speaker 3: five percent more money. So hypothetically, if you had one
Speaker 3: hundred thousand dollars, that's the difference of retiring with seven
Speaker 3: hundred and sixty thousand dollars or one point oh three
Speaker 3: million dollars.
Speaker 5: Wow.
Speaker 3: Okay, So like we're not talking like, oh, it's just
Speaker 3: a couple of dollars, Like these decisions could mean hundreds
Speaker 3: of thousands of dollars for you.
Speaker 4: But you didn't have to contribute anymore for that. Sorry.
Speaker 3: Are we not all going into our super and just
Speaker 3: fixing it or making it reflective of what we want?
Speaker 3: And I'm not saying, oh, go pick the growth option,
Speaker 3: but like I am speaking to a community right now,
Speaker 3: and individuals who you know.
Speaker 4: I know you because I survey you.
Speaker 3: I am in our Facebook group all the time, and
Speaker 3: most people that I talk to go, oh my god.
Speaker 4: I was in the balanced option.
Speaker 3: And then when I finally read up on it, I
Speaker 3: finally did the questionnaire, I finally, you know, took the
Speaker 3: test on the super fund website that was free found
Speaker 3: out I was growth. Like, the amount of times I
Speaker 3: have that conversation is crazy. Yes, I'm also having that
Speaker 3: conversation where people will say, oh, well, I was in
Speaker 3: balanced and then I did it and I was balanced,
Speaker 3: So like.
Speaker 4: I don't know what you were harping on about.
Speaker 5: Sure, well, at least you know exactly.
Speaker 4: Right you did it.
Speaker 3: So risk settings actually do really really matter because the
Speaker 3: difference between one percent you might go today whatever, But sorry,
Speaker 3: we're in the.
Speaker 4: Middle of cozy lives.
Speaker 3: Like we're all trying to, you know, cut back, we're
Speaker 3: all trying to save money. If you are feeling really
Speaker 3: stressed about finances right now and the groceries are hard,
Speaker 3: rents hard, bills are hard. Do you know what you
Speaker 3: can do something for future you? You can still care
Speaker 3: about your finances. It just doesn't have to be in
Speaker 3: saving what's coming into your bank account because that's sometimes
Speaker 3: too hard.
Speaker 4: But pull your finger out, go and fix your super.
Speaker 5: Go and fix your Super, please and thank you.
Speaker 3: And I'll give you three questions because I know you're
Speaker 3: about to try and wrap me up because I'm a
Speaker 3: super Yappa, But I want you to ask yourself three questions. Beck,
Speaker 3: So I want you to ask, well, how many years
Speaker 3: until I access Super? Because I I want to know
Speaker 3: or I want you to know what your preservation age is.
Speaker 3: So that's not when you're quote planning to retire. That's
Speaker 3: when you can actually get your little dirty fingers on
Speaker 3: that money yeap, without paying tax because, like you know,
Speaker 3: I could have arguments with lots of people who are like,
Speaker 3: well you could access you super early?
Speaker 4: Yeah?
Speaker 3: Cool, but hopefully I'm fit and healthy and don't have
Speaker 3: to right what age, and it's usually the age of
Speaker 3: sixty seven? Can I access that completely tax free? And
Speaker 3: I want you to ask yourself right now, like beck,
Speaker 3: zoom out.
Speaker 4: We're just going to use you as an example.
Speaker 3: What would happen if tomorrow you logged into your superannuation
Speaker 3: account and your balance ha crash twenty percent?
Speaker 5: I would I would sit on it, yep, But.
Speaker 3: Like what would happen? Would you freak out? Would you
Speaker 3: like switch to panic mode?
Speaker 5: All those things?
Speaker 4: But what would happen?
Speaker 1: Oh?
Speaker 5: I don't know?
Speaker 4: But like, how does that impact you financially right now?
Speaker 4: Right now?
Speaker 3: No?
Speaker 4: What does it do to your life?
Speaker 3: Well?
Speaker 4: Can you still afford your bills and your rent and stuff?
Speaker 3: Because as you're super right now, have any sway on
Speaker 3: your finances?
Speaker 1: No?
Speaker 3: Okay, So I need you to talk to yourself about
Speaker 3: that and whether if you dove into your super account
Speaker 3: and found it was down.
Speaker 4: Yep, one, Yeah, okay, you're allowed to panic.
Speaker 3: Like I have said before on the show ex Financial Advisor,
Speaker 3: I talk about money all the time. If I log
Speaker 3: into my share trading platform and I find that my
Speaker 3: money is down, I get that pit in the bottom
Speaker 3: of my stomach because do you know what?
Speaker 4: People hate losing money? Absolutely? I hate it too.
Speaker 3: But then I can zoom out and go, Okay, let's
Speaker 3: look at the big picture. I still have like thirty
Speaker 3: years before I'm even retiring. I'm meant to be looking
Speaker 3: at this like shares or on sale. I'm meant to
Speaker 3: be looking at this in a different way. And you
Speaker 3: know what, I'm not saying it's instantaneous.
Speaker 4: I'm not like, oh I'm so silly and that I
Speaker 4: walk off.
Speaker 3: I'm still like, yeah, I don't really like this, and
Speaker 3: I still feel yuck about it. But maybe I'm doing
Speaker 3: a little bit more research, maybe I'm doing some googling.
Speaker 3: But ultimately I know that my job is to sit
Speaker 3: and wait. But if that's something that you couldn't deal with,
Speaker 3: you need to have a think about that. And then
Speaker 3: the next one is what is my plan to shift
Speaker 3: later in life do I have one? Am I going
Speaker 3: to be growth until I am sixty seven? Or am
Speaker 3: I going to you know, go all right, I'm feeling
Speaker 3: really good about this right now, but if I was
Speaker 3: like fifty, I probably wouldn't want to be here. They're
Speaker 3: the times that we're starting to reflect and go okay, cool,
Speaker 3: Like maybe I would need to revisit my risk profile
Speaker 3: at that time, but I actually kind.
Speaker 4: Of would love.
Speaker 3: Like in my perfect world, you're actually revisiting it annually.
Speaker 3: You're like kind of just doing a like finance health check.
Speaker 3: You're like, am I in the right place? It should
Speaker 3: be kind of a tick box exercise. I do it
Speaker 3: for myself. I redo the survey and I'm like, yeap,
Speaker 3: what a surprise. I'm still a high growth person, but
Speaker 3: that might change over my lifetime, and the second it does,
Speaker 3: I want to make sure that my super and all
Speaker 3: of my investments are reflective of that.
Speaker 4: So those are my questions that you're asking yourself because
Speaker 4: I do that.
Speaker 3: Tried to cap myself with just three, but there's lots
Speaker 3: of other questions like why am I even here? You know? Okay?
Speaker 5: So I feel like this is a really good place
Speaker 5: to leave it.
Speaker 3: I don't want to overwhelm people, so I agree, But
Speaker 3: I have so much to tell you.
Speaker 4: But we didn't even talk about contribution caps.
Speaker 3: We didn't even talk about like tax Like there's just
Speaker 3: a lot to it. But I would actually prefer you're right,
Speaker 3: I would prefer to like cut it, you ruminate on that,
Speaker 3: go do all of these things, do your homework, yes,
Speaker 3: and then we'll come back.
Speaker 4: And we'll talk about it, because I'll make another.
Speaker 5: Part for a two patter a tuparta. Yeah that sounds great,
Speaker 5: Thank you Ford. I love it.
Speaker 3: Also, I just want to point out I'm not making
Speaker 3: these stupid episodes. And I think you guys already know this.
Speaker 3: Maybe you know how sometimes just tell people how to
Speaker 3: suck eggs. Apologies, but like I'm not making these episodes
Speaker 3: because I want you to feel overwhelmed. Like I want
Speaker 3: you to have all of the tools in your toolkit
Speaker 3: so that you can create your financial future that you
Speaker 3: deserve on your own. Like these are the things that
Speaker 3: you know you could go see a financial advisor, but
Speaker 3: go you could do it yourself. Like it's not about
Speaker 3: being the smartest, it's not about like having a finance education.
Speaker 4: It's just about logging in.
Speaker 3: All of these things on these superannuation websites are written
Speaker 3: in plain English for us, but we don't know that
Speaker 3: unless we go there, like and I promise, like this
Speaker 3: is probably I don't know. Is this is a mean
Speaker 3: thing to say, But like in Australia, we have to
Speaker 3: operate on the idea that we are talking to the
Speaker 3: silliest person in the room. Yes. So, like when you
Speaker 3: create content, especially finance content, you have to make sure
Speaker 3: that it's applicable to the person who literally has absolutely
Speaker 3: no education on it. And that's the way supranuation companies
Speaker 3: create content. So if you've been feeling overwhelmed because you're like,
Speaker 3: I'm going to go to the super company and it's
Speaker 3: not going to make any sense, promise you it's much
Speaker 3: easier than you think it is. And like even if
Speaker 3: you just pick one thing, whether that's like you're deciding
Speaker 3: to just check your your balance on the MyGov app,
Speaker 3: or you might pick up the phone and I say
Speaker 3: this all.
Speaker 4: The time, call your super fund. Like Beck used to
Speaker 4: work at a super fund, I did.
Speaker 3: When you pick up the phone to call the super fund,
Speaker 3: am I talking to the CEO or someone condescending?
Speaker 4: Oh, you're took to us.
Speaker 5: You're talking to you, and.
Speaker 3: Like you can be like, what's my balance, and you
Speaker 3: can be like, let me have a look for you,
Speaker 3: Victoria girl, Like people who work at super funds have
Speaker 3: your back, and like people don't take jobs at super
Speaker 3: funds if they don't want to be helpful. So anyway
Speaker 3: call them, because you're already paying the fees on that account,
Speaker 3: as we talked about in this episode, and that's paying their.
Speaker 4: Salaries and free advice. Absolutely, I love that for us.
Speaker 3: Or maybe you're like wanting to take it a step
Speaker 3: further and you're like, I'm going to add some extra
Speaker 3: contributions because future You deserves that.
Speaker 4: You're already going to be in a better spot.
Speaker 3: Right And if you haven't already, my friends, please hit follow, tap, subscribe,
Speaker 3: do all the things, because we've got plenty more episodes
Speaker 3: that are coming in the future that are going to
Speaker 3: put future You in the best possible position.
Speaker 4: And like I was born to talk about finance. You
Speaker 4: don't good but also not God's work. This is so
Speaker 4: self indulgent. I love it.
Speaker 3: Imagine just yapping about the things that you love all day.
Speaker 3: It does sound good, and somehow it's my job.
Speaker 4: Yeah, that's so lucky.
Speaker 5: She's blessed.
Speaker 4: Super is so sexy. Anyway, we'll see you next week. Guys.
Speaker 3: Bye,