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You must be some kind of SUPER star · She's On The Money

• 0:00
  Speaker 1: She's on the Money.
• 0:02
  Speaker 2: She's on the Money. Hello, and welcome to She Is
• 0:14
  Speaker 2: on the Money, the podcast for millennials who want financial freedom.
• 0:18
  Speaker 2: Today's episode of the show is brought to you by
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  Speaker 2: Verve Super, who will be chatting about in a little
• 0:22
  Speaker 2: bit more detail later on in the show. My name
• 0:24
  Speaker 2: is Georgia King, a copywriter and TV assistant with many
• 0:27
  Speaker 2: a thing to learn about money, and across from me
• 0:30
  Speaker 2: today is it's the illustrious, the intelligent, the enigmatic finance fiend,
• 0:34
  Speaker 2: Victoria Divine, Hey Fee.
• 0:36
  Speaker 1: I do with you sometimes, Georgia, Please, I love to
• 0:41
  Speaker 1: compliment you a lot. It's a lot.
• 0:44
  Speaker 2: Now today on the show, we are giving the people
• 0:48
  Speaker 2: what they want. It's our super episode, Guys, a whole EPP,
• 0:52
  Speaker 2: where we dive deep into the world of superannuation. Now
• 0:56
  Speaker 2: we know this topic is one so many of us
• 0:58
  Speaker 2: want to know more about because it's kind of this elusive,
• 1:01
  Speaker 2: distant thing we can't quite fathom and like, to be frank,
• 1:04
  Speaker 2: it probably sounds pretty dry to a lot of us.
• 1:06
  Speaker 2: I know it's dry to me, especially because it is
• 1:09
  Speaker 2: so far away and we're so far away from retirement ourselves.
• 1:13
  Speaker 2: But as Victoria Super define, hard.
• 1:16
  Speaker 1: To calm down on them.
• 1:17
  Speaker 2: We'll soon explain prioritizing our super now is one of
• 1:20
  Speaker 2: the most integral things we can do to secure our
• 1:23
  Speaker 2: future selves financially.
• 1:25
  Speaker 1: Absolutely it is.
• 1:26
  Speaker 2: But before we whip into the main topic of today's show,
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  Speaker 2: let's chat money wins and confessions from this week. The
• 1:32
  Speaker 2: we confessing or are we celebrating this week?
• 1:34
  Speaker 1: How do you feel like you guys need to congratulate me?
• 1:36
  Speaker 1: Ok y, all my excellent money performance.
• 1:39
  Speaker 2: Talk to us.
• 1:40
  Speaker 1: I have another money win. I feel like I've been
• 1:42
  Speaker 1: so full of money wins recently that I was racking
• 1:44
  Speaker 1: my brain before we recorded this episode to think of
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  Speaker 1: a confession. Yet I do not have one for you.
• 1:50
  Speaker 1: So here is my money win this past week or
• 1:53
  Speaker 1: a couple of weeks. Actually the start of this year,
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  Speaker 1: I made it a goal to not use CityLink or
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  Speaker 1: you know, my toll It's as much as I did,
• 2:02
  Speaker 1: and I have found a new route to work that
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  Speaker 1: does not include any toll roads. Stop it, and I
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  Speaker 1: am saving a lot of money because of that.
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  Speaker 2: That's amazing.
• 2:10
  Speaker 1: Yeah, I didn't realize how expensive toll roads.
• 2:12
  Speaker 2: I have no idea how much toll roads are. I
• 2:14
  Speaker 2: just refused to like, look at well.
• 2:16
  Speaker 1: I looked because I was changing up my banking over Christmas,
• 2:20
  Speaker 1: and I logged in, and I thought there were fraud
• 2:22
  Speaker 1: charges on my card, except there weren't. It was me
• 2:27
  Speaker 1: us and it is actually more expensive than I had
• 2:30
  Speaker 1: anticipated it to be. So when I logged into the account,
• 2:33
  Speaker 1: I expected to see some other car on my CityLink account,
• 2:37
  Speaker 1: but it was you alas it was all me. So
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  Speaker 1: I resolved to not use toll roads in twenty twenty,
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  Speaker 1: and now I have a money win to share.
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  Speaker 2: That is a win.
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  Speaker 1: Well done girl, Thank you, have you got something just
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  Speaker 1: as exciting roads are hard to compete with.
• 2:52
  Speaker 2: Okay, this is obscure. So mum has been clearing out
• 2:56
  Speaker 2: our house and.
• 2:57
  Speaker 1: I see where this is going already.
• 3:00
  Speaker 2: I don't think you do. In my room she found
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  Speaker 2: fifty dollars worth of coins guys, yes, bizarre. So she's
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  Speaker 2: going to transfer that to me, which is lovely.
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  Speaker 1: Should you not have cleaned your own room though, GEORGIEA.
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  Speaker 2: Yeah, okay, I know I sound pathetic. Also though, I've
• 3:13
  Speaker 2: like inherited lots of crockery and silverware and really cool
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  Speaker 2: things from the nineties, so it's a money.
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  Speaker 1: Win, absolute money win, now, I remember when I moved out,
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  Speaker 1: I got a pot set and I loved it. Yeah,
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  Speaker 1: it was the best thing I ever got. Anyway, I
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  Speaker 1: feel like we've got a show to do.
• 3:29
  Speaker 2: We do again before we head into the main chat.
• 3:32
  Speaker 2: How did our Facebook community go this week? Did anyone
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  Speaker 2: stand out to you?
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  Speaker 1: Yes? Actually I have a money win from our friend Caitlin.
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  Speaker 1: She posted in the group this week and said, I
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  Speaker 1: moved to Canberra three months ago and today I decided
• 3:45
  Speaker 1: to deep clean my apartment. I was just finishing the
• 3:47
  Speaker 1: kitchen and looked in one of the corner cupboards and
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  Speaker 1: saw a brand new Brevel Cafe Roma coffee machine. Who
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  Speaker 1: She's double checked with her real estate agent, and her
• 3:57
  Speaker 1: landlord and the previous tenants, and they all said it
• 4:00
  Speaker 1: wasn't theirs. She's not sure how it came about. She's
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  Speaker 1: not complaining one bit. She says. This means I now
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  Speaker 1: don't have to buy a morning coffee anymore, and I
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  Speaker 1: don't have to go out and spend a few hundred
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  Speaker 1: dollars on a coffee machine, which she was actually already
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  Speaker 1: saving for. So that's my favorite money win. She can't
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  Speaker 1: believe her luck. I can't believe her luck and I
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  Speaker 1: feel like that's a great money win. That is the great,
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  Speaker 1: especially at the start of the year.
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  Speaker 2: I'm just opening your cupbot and finding a little coffee
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  Speaker 2: machine in there.
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  Speaker 1: Is there a coffee fairy? I'm not sure? Can he
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  Speaker 1: visit my house? I know I want one to Gee,
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  Speaker 1: have you got a money win for us? I do?
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  Speaker 2: Mineus from the lovely Rose who has written money Win
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  Speaker 2: smiley faced with the tongue poking out with the money
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  Speaker 2: dollar sign on it. My my gym runs monthly challenges.
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  Speaker 2: Each time you enter a new challenge, your name is
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  Speaker 2: put into the box, and at the end of the year,
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  Speaker 2: a winner is drawn out and you've received six months
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  Speaker 2: of free membership this year Rose one, meaning she can
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  Speaker 2: contribute the money she would usually pay for her membership
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  Speaker 2: to her savings for a holiday later on.
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  Speaker 1: Amazing, Amazing Rose. What I love about that is not
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  Speaker 1: only did she win the competition, but she actually reallocated
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  Speaker 1: the funds instead of just letting it go dormance. So Rose,
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  Speaker 1: You're a legend. Thank you so much for sharing that
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  Speaker 1: with us.
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  Speaker 2: Today's show is all about superannuation.
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  Speaker 1: Now.
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  Speaker 2: In the lead up to this, I've been talking to
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  Speaker 2: you v a lot. Yes, you have yeah to do
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  Speaker 2: some learning, and the key thing I have learned is
• 5:24
  Speaker 2: that SUPER is not an investment, is it?
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  Speaker 1: Vee, No, it is not.
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  Speaker 2: It's a tax structure bingo. Yes. It also turns out
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  Speaker 2: you have to have it and nearly ten percent of
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  Speaker 2: your salary is going into it, so we need to
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  Speaker 2: be taking it very seriously. We do now, V Before
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  Speaker 2: we do talk about the difference between a tax structure
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  Speaker 2: and an investment, can you please tell us exactly what
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  Speaker 2: SUPER is.
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  Speaker 1: Superannuation is designed for us to have to ensure that
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  Speaker 1: we save enough money through the course of our working
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  Speaker 1: lives to make sure that we have sufficient funds available
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  Speaker 1: to us in retirement, so we're not retiring and stopping
• 5:57
  Speaker 1: work without having an income. So we want out income
• 6:00
  Speaker 1: to continue long after we stopped turning up to our jobs. So,
• 6:04
  Speaker 1: if you're employed, you're probably going to be qualifying for
• 6:07
  Speaker 1: the Super Guarantee contribution, So the SG as it would
• 6:10
  Speaker 1: appear on your pay slip from your employer, which requires
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  Speaker 1: them by law, to contribute nine point five percent of
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  Speaker 1: your salary into a superannuation account on your behalf. This
• 6:20
  Speaker 1: amount is often subtracted from your salary before you actually
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  Speaker 1: get your pay packet, although some employers do actually pay
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  Speaker 1: your super on top of your salary, and that's a
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  Speaker 1: really good point as well. G actually to make sure
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  Speaker 1: that when you're talking about your income, you know if
• 6:34
  Speaker 1: your salary is including or excluding superannuation. So often people
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  Speaker 1: will say it's fifty thousand dollars plus super, or it's
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  Speaker 1: fifty thousand dollars including super. Understanding that difference and what
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  Speaker 1: that actually means for you is really important. It's actually
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  Speaker 1: a difference of nine point five percent or more depending
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  Speaker 1: on what industry you work in. So it really pays
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  Speaker 1: for you to understand what you're worth and how that works,
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  Speaker 1: because it also comes into con sideration when negotiating salaries
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  Speaker 1: and when going for jobs, and understanding what your rights
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  Speaker 1: are and what you're asking for, because all too often
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  Speaker 1: do I see people saying, oh, I got fifty thousand dollars,
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  Speaker 1: that's fantastic, and you go all right, including or excluding superannuation,
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  Speaker 1: and they say, oh, I don't know. So it's worth
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  Speaker 1: fighting for because it's an additional ten percent, and you know,
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  Speaker 1: it's important to understand exactly where you were standing. And
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  Speaker 1: I think that everyone should know what their SG actually
• 7:29
  Speaker 1: looks like so g. As you were saying before, a
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  Speaker 1: super fund is not actually an investment. But super funds
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  Speaker 1: do take the money you put into your super accounts
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  Speaker 1: and invest it on your behalf, and the purpose of
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  Speaker 1: that is to grow your wealth over time so that
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  Speaker 1: when we get to retirement, we have more money than
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  Speaker 1: what we had saved. I've used this example on the
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  Speaker 1: podcast before, but it's one of my favorite ones because
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  Speaker 1: it's super super powerful. I think I'm funny. Super As
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  Speaker 1: an example, but if you are twenty one and you
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  Speaker 1: started saving five hundred dollars per month until the age
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  Speaker 1: of retirement, you would have two hundred and forty thousand dollars.
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  Speaker 1: But if you'd taken that same amount of money and
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  Speaker 1: invested it instead over the long term, you would have
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  Speaker 1: an investment portfolio worth one point two million dollars. That's
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  Speaker 1: insane in comparison to what you would have just saved.
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  Speaker 1: So it's really important that we actually take into consideration
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  Speaker 1: where we're putting our money and see super as an
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  Speaker 1: investment for the long term, because if you're starting small
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  Speaker 1: and starting early, that compounds really quickly over time. Your
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  Speaker 1: super fund will invest your money in line with the
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  Speaker 1: risk profile that you chose when you selected your super fun.
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  Speaker 2: Hang on, V what super profile did I select? I
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  Speaker 2: have no idea what you're talking about.
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  Speaker 1: So gee, I know you've already picked your superfund right,
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  Speaker 1: like we're talking about this before. When you pick your
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  Speaker 1: super fund, you actually pick a risk profile. So that
• 8:51
  Speaker 1: could be a conservative risk profile, it could be a
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  Speaker 1: high growth risk profile, but it is actually completely in
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  Speaker 1: your control. How exposed to the share market your money is?
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  Speaker 2: Right, is there a default that I would have selected?
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  Speaker 1: Conservative is quite often the default, or it's called balanced
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  Speaker 1: with most super funds, and that means that a very
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  Speaker 1: large percentage of your superfund is actually sitting in cash.
• 9:15
  Speaker 1: When I say that, it means that that money is
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  Speaker 1: not exposed to the share market and therefore is not
• 9:21
  Speaker 1: getting the returns that you might be expecting it to
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  Speaker 1: get because it's in super So it's definitely worth checking
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  Speaker 1: and going on to your superfund website and checking what
• 9:29
  Speaker 1: risk profile you're invested in and working out if the
• 9:32
  Speaker 1: risk profile that you have chosen or you're invested in
• 9:35
  Speaker 1: is actually in line with your values.
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  Speaker 2: Okay, Ver, So I want to put my money in shares?
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  Speaker 2: How do I go about making that happen.
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  Speaker 1: So you need to log into your super fund and
• 9:44
  Speaker 1: check what you've ticked. It's very very simple to change.
• 9:47
  Speaker 1: It's often just a tickbox. So go in and have
• 9:50
  Speaker 1: a look at what the risk profile is. On all
• 9:52
  Speaker 1: of the superannuation websites, there will be an explanation of
• 9:55
  Speaker 1: the risk profiles that they have on offer, so read
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  Speaker 1: through those, make sure it aligns to your values, and
• 10:00
  Speaker 1: then pick the profile that is most suited to your situation.
• 10:03
  Speaker 1: If you're a little bit confused, I know this is
• 10:05
  Speaker 1: really early on to say go see a financial advisor,
• 10:08
  Speaker 1: but literally talk to a financial advisor really early on,
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  Speaker 1: because if they put you in the right fund from
• 10:13
  Speaker 1: the very beginning, you're going to be in a position
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  Speaker 1: where you are quite literally hundreds of thousands of dollars better.
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  Speaker 2: Off v That is literally insane. I had no idea
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  Speaker 2: that this was a thing.
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  Speaker 1: Well, no one seems to care about super because it's
• 10:24
  Speaker 1: so far off. Everyone talks about superannuation is something that
• 10:27
  Speaker 1: we should care about whimor and retirement because it is
• 10:30
  Speaker 1: for retirement. But it is absolutely worth caring about right
• 10:33
  Speaker 1: here and now, because I want future me to have
• 10:35
  Speaker 1: one hundred thousand dollars more. I don't know about you.
• 10:38
  Speaker 1: I would like that too, and I didn't have to
• 10:40
  Speaker 1: work for it, so I just had to tick a box. Awesome,
• 10:42
  Speaker 1: go tick the boxes that make sense to.
• 10:44
  Speaker 2: You before we go any deeper. V, can you please
• 10:47
  Speaker 2: explain what kind of super funds are out there?
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  Speaker 1: Good question. Gee, there are so many different types of
• 10:52
  Speaker 1: super funds, and I'm not going to get into the
• 10:54
  Speaker 1: ins and outs of the specific brand names or the
• 10:57
  Speaker 1: companies that are there, because there are so many that
• 11:00
  Speaker 1: you need to take into consideration when looking at super funds.
• 11:03
  Speaker 1: But let's really consolidate this and I will say that
• 11:06
  Speaker 1: there are four main types of super funds. So there
• 11:09
  Speaker 1: are corporate funds. These are funds that an employer sets
• 11:12
  Speaker 1: up with a financial institution on behalf of their employees
• 11:15
  Speaker 1: so that they have discounts and benefits associated with it.
• 11:19
  Speaker 1: You then have personal super funds, and these are retail
• 11:22
  Speaker 1: funds that are available to individual customers like anybody listening
• 11:25
  Speaker 1: to this podcast. There are then industry superannuation funds, and
• 11:29
  Speaker 1: these funds are open to everyone, but if you work
• 11:32
  Speaker 1: in a particular industry or under a particular industrial award,
• 11:35
  Speaker 1: your employer may contribute to your super guarantee and other
• 11:39
  Speaker 1: super monies to an industry fund. And then there is
• 11:42
  Speaker 1: a thing called SMSF and that sounds really fancy, but
• 11:45
  Speaker 1: it stands for self managed super fund and these are
• 11:48
  Speaker 1: often referred to as the DIY version of super funds.
• 11:52
  Speaker 1: So members of a DIY superfund are responsible for the
• 11:56
  Speaker 1: investment strategy, for the operation and administration, and all the
• 11:59
  Speaker 1: accou hunting on this. So it's a lot of responsibility.
• 12:03
  Speaker 1: It is something that you don't go into lightly and
• 12:05
  Speaker 1: you need to really consider. And my personal opinion on this,
• 12:08
  Speaker 1: and I'm just putting it out there because I see
• 12:10
  Speaker 1: so many people using smsfs incorrectly, is that if you
• 12:14
  Speaker 1: have less than three hundred thousand dollars cash in your superfund,
• 12:17
  Speaker 1: do not consider an SMSF. That's straight advice. And I'm
• 12:20
  Speaker 1: just not interested in hearing people telling me that it's
• 12:23
  Speaker 1: a good idea with fund balances less than that, because
• 12:26
  Speaker 1: the amount of accounting fees on the flip side don't
• 12:29
  Speaker 1: make it worth it.
• 12:30
  Speaker 2: Plus that sounds so complex for me to manage myself
• 12:34
  Speaker 2: like that just doesn't sound plausible.
• 12:35
  Speaker 1: Absolutely. I think there are a small amount of people
• 12:38
  Speaker 1: though that really like managing their super themselves, whether they
• 12:41
  Speaker 1: are savvy investors or they are higher net wealth individuals.
• 12:44
  Speaker 1: It does work for some people. I do have clients
• 12:47
  Speaker 1: who have smsfs. But I think it's really worth pointing
• 12:50
  Speaker 1: out here that so many people have fallen into the
• 12:53
  Speaker 1: trap of getting it SMSF because you can buy property
• 12:56
  Speaker 1: in it, or getting an SMSF because you can use
• 12:59
  Speaker 1: the funds in and other way. And I strictly do
• 13:02
  Speaker 1: not believe in that because it's not divers If we
• 13:04
  Speaker 1: talk about diversification all the time, if you're taking all
• 13:07
  Speaker 1: your super money and putting it in one of the
• 13:09
  Speaker 1: plan apartment, you're not diversifying your investment strategy. Future you
• 13:14
  Speaker 1: is not going to thank you if someone has said
• 13:16
  Speaker 1: to you you need to get an SMSF, we can
• 13:18
  Speaker 1: use that money to buy property. Go consult a good
• 13:21
  Speaker 1: quality financial advisor and get some alternative advice to make
• 13:25
  Speaker 1: sure if that actually works for you, because more often
• 13:27
  Speaker 1: than not, it's not a good idea.
• 13:29
  Speaker 2: Would you say, for your average gal like me on
• 13:32
  Speaker 2: an average salary, is there a fund that I should
• 13:34
  Speaker 2: be choosing? No?
• 13:36
  Speaker 1: And I know people are listening to this, going Victoria,
• 13:38
  Speaker 1: I tell us which super fun can be with. But
• 13:40
  Speaker 1: I'm thinking and I'm so sorry that I'm unable to
• 13:43
  Speaker 1: actually say that One I can't give you guys personal
• 13:46
  Speaker 1: financial advice, but two, I don't believe in only one fund.
• 13:49
  Speaker 1: I have clients that are in numerous different funds, and
• 13:52
  Speaker 1: they're in different funds for different reasons. So my personal
• 13:56
  Speaker 1: opinion on this is that your super fun changes over
• 13:58
  Speaker 1: your life. When you I've just started working, a really
• 14:01
  Speaker 1: basic retail fund with really low level fees is perfect.
• 14:05
  Speaker 1: As you get a little bit more complex and you
• 14:07
  Speaker 1: start to increase the amount of money in your superannuation,
• 14:11
  Speaker 1: that's when you start to look at a little bit
• 14:13
  Speaker 1: more of a complex strategy. You start looking at super
• 14:16
  Speaker 1: funds that have more options available to you because it
• 14:19
  Speaker 1: becomes worth.
• 14:19
  Speaker 2: It what kind of options stone interest.
• 14:21
  Speaker 1: So different options to diversify the investments that you have.
• 14:25
  Speaker 1: As we know from the investment episodes we did last season,
• 14:28
  Speaker 1: brokerage can be really expensive and this actually applies to
• 14:31
  Speaker 1: the money that you're investing in superannuation. So if you
• 14:34
  Speaker 1: don't have much money and it's being invested for really
• 14:36
  Speaker 1: high levels of brokerage, it often ends up impacting your
• 14:40
  Speaker 1: performance and putting you behind. Higher levels of brokerage are
• 14:44
  Speaker 1: only applicable when you get to a point where you
• 14:46
  Speaker 1: have enough money to play with, so you're super fund
• 14:49
  Speaker 1: actually can change over your lifetime. As I mentioned before,
• 14:53
  Speaker 1: you've gone from having a retail fund to something a
• 14:55
  Speaker 1: little bit more complex and closer to retirement. You could
• 14:58
  Speaker 1: and probably should have more than a million dollars in superannuation.
• 15:03
  Speaker 1: That's when you and your financial advisor might sit down
• 15:05
  Speaker 1: and go, all right, well, we're going to do a
• 15:06
  Speaker 1: self managed super fund because you've got enough cash. It
• 15:09
  Speaker 1: is really financially viable. The accounting fees are absolutely worth it,
• 15:14
  Speaker 1: and this is why we're doing it. And you might
• 15:16
  Speaker 1: end up in a self managed super fund. But it's
• 15:18
  Speaker 1: not something that I would ever recommend to someone who
• 15:20
  Speaker 1: is young or has a lower balance.
• 15:22
  Speaker 2: So would you say there's any benefit to staying with
• 15:25
  Speaker 2: the one fund your whole life?
• 15:27
  Speaker 1: Not necessarily. If you're super comfortable with it, and you're
• 15:29
  Speaker 1: really passionate about that fund, then absolutely stay with them.
• 15:33
  Speaker 1: But it's something that you always need to review. It's
• 15:35
  Speaker 1: like a financial plan. I can't hand you a financial
• 15:38
  Speaker 1: plan and expect that that plan makes sense for you.
• 15:41
  Speaker 1: Of your life. Exactly ten years from now, your life's
• 15:43
  Speaker 1: going to be completely different, So we need a different strategy,
• 15:46
  Speaker 1: and super should be looked at in that way. It's
• 15:48
  Speaker 1: not something that we set and forget. It is very
• 15:51
  Speaker 1: easy to set it up, make sure it's okay, and
• 15:53
  Speaker 1: check back in a couple of years to see if
• 15:55
  Speaker 1: we need to update the strategy. It's definitely not something
• 15:58
  Speaker 1: we need to look at on a monthly or a
• 15:59
  Speaker 1: weekly basis. But being on top of it and understanding
• 16:03
  Speaker 1: all of the features that are associated with a super
• 16:05
  Speaker 1: fund is really really important. Just to clarify, g When
• 16:08
  Speaker 1: I say have multiple super funds over your lifetime, I'm
• 16:11
  Speaker 1: not saying multiple super funds at one time. It's moving
• 16:14
  Speaker 1: into different funds that then suit your situation as opposed
• 16:19
  Speaker 1: to the fund that you were in before. So it's
• 16:21
  Speaker 1: not necessarily like, oh, have five funds, because we'll get
• 16:23
  Speaker 1: to that. I don't believe in that at all.
• 16:25
  Speaker 2: Okay, So now I know how super is invested. Is
• 16:28
  Speaker 2: there anybody that super doesn't apply to or should everyone
• 16:31
  Speaker 2: be getting around it?
• 16:32
  Speaker 1: Really good question because SG actually applies to everyone who
• 16:35
  Speaker 1: is an employer. Like if you employ people, you've got
• 16:37
  Speaker 1: to pay super, but generally the SUPER contributions only have
• 16:41
  Speaker 1: to be paid if an employee is aged eighteen and
• 16:44
  Speaker 1: over and earns more than four hundred and fifty dollars
• 16:47
  Speaker 1: before tax each month, or an employee under eighteen who
• 16:52
  Speaker 1: works more than thirty hours a week and earns more
• 16:54
  Speaker 1: than four hundred and fifty dollars a month before tax
• 16:56
  Speaker 1: as well. There are rules, and you know, if you
• 16:59
  Speaker 1: were working casually all the way through high school and
• 17:01
  Speaker 1: you just did like four hours a weekend like I
• 17:04
  Speaker 1: did at the ice cream shop, you probably weren't being
• 17:07
  Speaker 1: paid SUPER because you didn't actually qualify for it. So
• 17:11
  Speaker 1: if you did, though, or you feel like you did,
• 17:13
  Speaker 1: you can lodge a claim. In some instances, though your
• 17:15
  Speaker 1: employer will also need to make SUPER contributions for you
• 17:18
  Speaker 1: if you're actually a contractor. So this is a really
• 17:21
  Speaker 1: complex area. So if you feel like someone was meant
• 17:23
  Speaker 1: to be paying you superannuation and hasn't, jump on the
• 17:26
  Speaker 1: ATO website. They've got really good calculators for working out
• 17:29
  Speaker 1: one how much SUPER you should have been paid, but
• 17:31
  Speaker 1: two instructions to follow up. If you haven't been paid
• 17:35
  Speaker 1: super and you feel like you were entitled to that.
• 17:37
  Speaker 2: Now We've spoken a little bit about this in the
• 17:39
  Speaker 2: lead up to today's EP, but can you please explain
• 17:42
  Speaker 2: for the listeners the difference between a concessional and a
• 17:45
  Speaker 2: non concessional contribution.
• 17:46
  Speaker 1: Oh, I'm excited you did your research and want questions
• 17:49
  Speaker 1: to ask me? Yes, yeah, good work. A concessional contribution
• 17:52
  Speaker 1: is also called a before tax contribution, and this is
• 17:56
  Speaker 1: money that goes into your super account from your before
• 17:59
  Speaker 1: tax inc come. So this is the contributions that your
• 18:02
  Speaker 1: employer is making, or a salary sacrifice amount that you've
• 18:06
  Speaker 1: already arranged with your employer, or a tax deductible contribution
• 18:10
  Speaker 1: that you're making, for example, if you're self employed or
• 18:13
  Speaker 1: decide to make extra contributions for yourself. Concessional contributions typically
• 18:17
  Speaker 1: make up the bulk of your Super savings and they
• 18:20
  Speaker 1: are generally taxed at fifteen percent. Previously, there were different
• 18:23
  Speaker 1: limits for concessional contributions depending on your age or your situation.
• 18:27
  Speaker 1: But twenty seventeen twenty eighteen, when they did their tax
• 18:31
  Speaker 1: stuff onwards, the rules have been simplified. Now there's a
• 18:34
  Speaker 1: new limit and it is twenty five thousand dollars regardless
• 18:37
  Speaker 1: of your age, and that is the maximum amount of
• 18:39
  Speaker 1: concessional contributions that you can add to your superfund each
• 18:43
  Speaker 1: and every single year without paying additional tax. So let's
• 18:47
  Speaker 1: flip this. Non Concessional contributions are contributions that, as g
• 18:52
  Speaker 1: you've probably guessed it, are made from your after tax income.
• 18:56
  Speaker 2: It adds up.
• 18:57
  Speaker 1: It does make sense. Concessional pre non concessional post. Previously,
• 19:03
  Speaker 1: there have been different rules, much like the concessional contributions,
• 19:07
  Speaker 1: about how much money you could contribute non concessionally to
• 19:10
  Speaker 1: your superannuation. But since twenty seventeen, the annual cap is
• 19:14
  Speaker 1: now one hundred thousand dollars, so it doesn't matter who
• 19:17
  Speaker 1: you are, what you do. You can only put up
• 19:19
  Speaker 1: to one hundred thousand dollars with a bring forward rule,
• 19:22
  Speaker 1: which I'll explain in just two seconds, to your superannuation fund.
• 19:27
  Speaker 1: So this money is not subject to the usual superanuation
• 19:31
  Speaker 1: tax rate of up to fifteen percent. You only get
• 19:33
  Speaker 1: that on your twenty five at the beginning. Does that
• 19:35
  Speaker 1: make sense?
• 19:36
  Speaker 2: It does.
• 19:37
  Speaker 1: So example, your employee could have paid you six thousand
• 19:41
  Speaker 1: dollars worth of super You can then add enough to
• 19:44
  Speaker 1: get to that twenty five thousand dollar cap without having
• 19:47
  Speaker 1: to pay additional tax any more than that twenty five thousand,
• 19:50
  Speaker 1: and you pay your concessional tax rate. This makes sense,
• 19:53
  Speaker 1: makes sense.
• 19:54
  Speaker 2: I know I can contribute up to twenty five thousand
• 19:56
  Speaker 2: dollars a year to my superfund, but is there a
• 19:59
  Speaker 2: cap on this over my whole lifetime?
• 20:01
  Speaker 1: Yes? So gee. As I mentioned before, there's a thing
• 20:04
  Speaker 1: called to bring forward rule, and that means that if
• 20:06
  Speaker 1: you're under the age of sixty four, you can make
• 20:09
  Speaker 1: a larger payment now, but it will reduce the future
• 20:12
  Speaker 1: contributions you can make. So in this way, you can
• 20:14
  Speaker 1: contribute up to three hundred thousand dollars in a financial year,
• 20:18
  Speaker 1: but that means that you won't be able to make
• 20:20
  Speaker 1: further contributions for the next two years once you use
• 20:22
  Speaker 1: up your cap. If you actually go over, like you
• 20:25
  Speaker 1: mentioned before, like, is there a cap, Yes, there are.
• 20:27
  Speaker 1: There are a couple of rules. If you exceed the
• 20:29
  Speaker 1: non concessional contribution cap, it actually gets really expensive, so
• 20:33
  Speaker 1: it's worth keeping an eye on it. And I know
• 20:35
  Speaker 1: not many of us can actually do this, but I
• 20:37
  Speaker 1: think we should be educated and know the rules lutely.
• 20:39
  Speaker 1: If you exceed the contribution cap, it's expensive because it'll
• 20:43
  Speaker 1: be taxed at forty seven percent. That's a that's a
• 20:46
  Speaker 1: lot of percentages, So keep that in mind, and also
• 20:50
  Speaker 1: take into account that if your total superbalance, if we
• 20:53
  Speaker 1: all should be so lucky, goes over one point six
• 20:57
  Speaker 1: million dollars, you're actually not allowed to make noncncernal contributions anymore.
• 21:01
  Speaker 1: What that doesn't mean, though, is that your super fund
• 21:03
  Speaker 1: can't keep growing. It just means you can't add to
• 21:06
  Speaker 1: it yourself. But you could have one point six million
• 21:09
  Speaker 1: dollars sitting in superannuation and it could grow over time.
• 21:12
  Speaker 1: So often people are trying to cap it out really
• 21:14
  Speaker 1: early and reach that one point six million dollar contribution
• 21:18
  Speaker 1: cap so that they achieve it early so that their
• 21:20
  Speaker 1: money compounds over time. And everybody knows how obsessed I
• 21:23
  Speaker 1: am with compound interest. Money doubles technically every ten years
• 21:28
  Speaker 1: or so, that amount of money could be worth significantly
• 21:31
  Speaker 1: more in the future if you have enough time to
• 21:33
  Speaker 1: wait for it.
• 21:34
  Speaker 2: This is all sounding amazing, and I'm feeling inspired to
• 21:37
  Speaker 2: start making those additional contributions to my super. But we
• 21:41
  Speaker 2: have discussed super before, and I remember you saying that
• 21:44
  Speaker 2: you personally don't make any additional contributions to super what's
• 21:48
  Speaker 2: your story girl? Why is this?
• 21:50
  Speaker 1: Well? Well, well kill you my own words coming back
• 21:53
  Speaker 1: to bite me. So you are correct. Gee. I have
• 21:57
  Speaker 1: said publicly and to you a number of times that
• 21:59
  Speaker 1: I I don't make additional super contributions, and whilst I
• 22:04
  Speaker 1: do still have my nine point five percent of my
• 22:06
  Speaker 1: salary going into my super, I don't put any more
• 22:09
  Speaker 1: money in there. So I don't want anyone to listen
• 22:12
  Speaker 1: to this and think, oh, well, Victoria does it. Therefore
• 22:14
  Speaker 1: it must be the right way. There is no right
• 22:16
  Speaker 1: or wrong way about this. It actually all comes down
• 22:19
  Speaker 1: to your values, and my values are that I don't
• 22:22
  Speaker 1: want my money sitting. Even though there's so many benefits
• 22:25
  Speaker 1: to having superannuation, I eat, lower tax rate, secure structure, etc.
• 22:30
  Speaker 1: I don't want my money locked away for that period
• 22:33
  Speaker 1: of time. So you can't actually access your superannuation until
• 22:37
  Speaker 1: you get to a certain age. That age at the
• 22:40
  Speaker 1: moment in Australia it is sixty where you can start
• 22:43
  Speaker 1: accessing it, and sixty five where you can start accessing
• 22:46
  Speaker 1: it tax free. I don't want to wait until I'm
• 22:49
  Speaker 1: sixty to have financial freedom. Financial freedom is something I
• 22:52
  Speaker 1: am wildly passionate about, and I don't want all of
• 22:55
  Speaker 1: my money and my main investment to be an asset
• 22:58
  Speaker 1: that I can't access. And I'm older, so I don't
• 23:02
  Speaker 1: prioritize additional contributions to superannuation because I am using those
• 23:06
  Speaker 1: contributions to put into a separate investment fund. And whilst
• 23:11
  Speaker 1: you might be saying in the BacT you heard, but Victoria,
• 23:13
  Speaker 1: you could be saving so much money on tax. To me,
• 23:16
  Speaker 1: sacrificing that additional saving on tax is absolutely worth it
• 23:20
  Speaker 1: to me personally because I know that I could access
• 23:23
  Speaker 1: it tomorrow or I could access it in ten years
• 23:25
  Speaker 1: and create that financial freedom for myself. I have so
• 23:29
  Speaker 1: many things I want to do and so many things
• 23:31
  Speaker 1: that I want to achieve over my lifetime, and having
• 23:33
  Speaker 1: access to those funds is really really important to me. However,
• 23:37
  Speaker 1: that doesn't mean it's important to everybody, and you might
• 23:39
  Speaker 1: prioritize getting your super to a certain level and doing
• 23:42
  Speaker 1: something else with your money. So definitely talk to a
• 23:45
  Speaker 1: financial advisor if you don't think that's right for you.
• 23:47
  Speaker 1: But I wouldn't ever say that it's a terrible idea
• 23:50
  Speaker 1: to contribute additional funds to your superannuation fund. But I
• 23:53
  Speaker 1: would be getting some advice.
• 23:54
  Speaker 2: First, Hi, there, you've reached that She's on the money mailbox.
• 24:01
  Speaker 2: Do you have a money problem you want help solving.
• 24:03
  Speaker 2: Do you have a money dilemma you just want to
• 24:05
  Speaker 2: chat about. Victoria is here to help. Every week we'll
• 24:09
  Speaker 2: be playing your questions to help make sense of a
• 24:11
  Speaker 2: money mess you may have found yourself in. Make a
• 24:13
  Speaker 2: quick recording on your phone and send it through to
• 24:16
  Speaker 2: podcast at She's onthemoney dot com dot au and you
• 24:19
  Speaker 2: might find yourself on the show. But for now, here's
• 24:21
  Speaker 2: this week's listener question.
• 24:23
  Speaker 3: Hey, Victoria, I'm just getting my finances in order. I've
• 24:26
  Speaker 3: got a couple of super funds and I'm going to
• 24:28
  Speaker 3: consolidate them together really soon. But I keep getting stuck
• 24:30
  Speaker 3: because I don't know which super fun to pick. There
• 24:33
  Speaker 3: are so many options, and I'm getting really overwhelmed looking
• 24:35
  Speaker 3: at everything. How do I pick and what do I
• 24:37
  Speaker 3: need to be looking out for?
• 24:39
  Speaker 2: Alrighty V, I'm going to leave you to answer this one.
• 24:42
  Speaker 2: Go right ahead.
• 24:43
  Speaker 3: Gee.
• 24:43
  Speaker 1: I feel like I've harped on to you over the
• 24:45
  Speaker 1: last couple of weeks about the importance of consolidating super ya,
• 24:48
  Speaker 1: so maybe you could have addressed this. But I'll leave
• 24:51
  Speaker 1: it to you don There's a couple of components to
• 24:53
  Speaker 1: this question that I want to jump on. First is, yes,
• 24:56
  Speaker 1: it is so important to consolidate your super fund. So
• 24:59
  Speaker 1: I'm going to address the consolidation part first and then
• 25:02
  Speaker 1: I will talk later about which fund to pick. But
• 25:06
  Speaker 1: really important to consolidate your super for a number of reasons,
• 25:09
  Speaker 1: and there's so many things you need to think about
• 25:11
  Speaker 1: when trying to do that. But the average of the
• 25:14
  Speaker 1: fees that you'll pay over the lifetime of a super
• 25:16
  Speaker 1: fund is fourteen thousand dollars. So that's how much you'll
• 25:19
  Speaker 1: pay in fourteen years. So average of one hundred dollars
• 25:22
  Speaker 1: in annual fees and two hundred and fifty dollars each
• 25:25
  Speaker 1: year in insurances really adds up. So that fourteen thousand
• 25:29
  Speaker 1: dollars sounds like a lot of money, but I promise
• 25:31
  Speaker 1: you it's actually quite reasonable for a super fun fee.
• 25:34
  Speaker 1: But if you had five super.
• 25:35
  Speaker 2: Funds, times that by five, times that.
• 25:38
  Speaker 1: By five, you're paying seventy thousand dollars worth of fees
• 25:42
  Speaker 1: over the lifetime of having all of those funds. And
• 25:44
  Speaker 1: you're still paying that one hundred dollars annually in fees
• 25:47
  Speaker 1: for each of those funds, and you're also paying two
• 25:50
  Speaker 1: hundred and fifty dollars in fees every single year for
• 25:53
  Speaker 1: those insurances. So it really pays in the long term
• 25:57
  Speaker 1: to actually consolidate your super.
• 25:59
  Speaker 2: How do you consolidate your super bee?
• 26:01
  Speaker 1: So you can actually jump on my goov website and
• 26:03
  Speaker 1: it is quite simple. But my recommendation isn't to just
• 26:06
  Speaker 1: jump on there and consolidate your super Whilst I'm saying
• 26:09
  Speaker 1: the process is easy, there is so much to take
• 26:12
  Speaker 1: into consideration when consolidating your super fund. So the first
• 26:15
  Speaker 1: is to look at the super fund that you want.
• 26:17
  Speaker 1: You're looking at fees. You're looking at past performance, albeit
• 26:20
  Speaker 1: that is not a reliable predictor of future performance. You
• 26:23
  Speaker 1: are looking at the way they invest You are looking
• 26:26
  Speaker 1: at if they're invested ethically or not. Is that something
• 26:28
  Speaker 1: that is a value to you. If so, do your research,
• 26:31
  Speaker 1: understand what you do and don't accept. When it comes
• 26:34
  Speaker 1: to the investment world, it's a really good idea to
• 26:37
  Speaker 1: compare super funds online and just weigh up your options.
• 26:39
  Speaker 1: So the smart Money website from the Australian Government is
• 26:43
  Speaker 1: a really good place to start because it can help
• 26:45
  Speaker 1: you understand what fees and charges you need to be
• 26:48
  Speaker 1: taking into consideration. And if you're a remember of our
• 26:50
  Speaker 1: Facebook group, this week, I'm going to be posting a
• 26:52
  Speaker 1: little bit of a comparison chart so you guys can
• 26:55
  Speaker 1: do your own comparisons, which will be really exciting. But
• 26:59
  Speaker 1: when weighing up your super fund also, please please please
• 27:02
  Speaker 1: take into consideration the insurances that you have as standard
• 27:06
  Speaker 1: on those funds. Now, I know this doesn't sound very sexy,
• 27:10
  Speaker 1: sorry G and everybody listening, but insurance is incredibly important.
• 27:16
  Speaker 1: And if we were given insurance when we were young
• 27:18
  Speaker 1: and had nothing physically or mentally wrong with us, we
• 27:22
  Speaker 1: are in a position where we don't have any exclusions
• 27:24
  Speaker 1: on this insurance cover. So therefore it's quite valuable to
• 27:27
  Speaker 1: us because it covers everything. But if we close our
• 27:30
  Speaker 1: superannuation accounts without considering the insurances, we're in a position
• 27:35
  Speaker 1: where we might have lost cover that we actually needed.
• 27:38
  Speaker 1: For example, I had a client who came to me
• 27:40
  Speaker 1: and said, Victoria, I've got this back issue. I really
• 27:43
  Speaker 1: need insurance, and because he had a pre existing condition,
• 27:47
  Speaker 1: no insurer would touch him because they're like, well, we're
• 27:49
  Speaker 1: not insuring your back, we'll ensure every other part of you,
• 27:52
  Speaker 1: but we're going to exclude your back. But was incredibly
• 27:55
  Speaker 1: lucky that he hadn't canceled his insurances in his super
• 27:59
  Speaker 1: yet because they didn't have any exclusions. So therefore we
• 28:02
  Speaker 1: were able to work out a way to keep some
• 28:04
  Speaker 1: of the insurance that he had pre existing in super
• 28:07
  Speaker 1: to cover his back, and top up outside of super
• 28:09
  Speaker 1: to make sure that everything else was covered. So, if
• 28:12
  Speaker 1: you're going to put yourself in a position where you're like,
• 28:14
  Speaker 1: all right, I need to consolidate super funds, take into
• 28:16
  Speaker 1: consideration the value of the insurance is there.
• 28:19
  Speaker 3: Now.
• 28:19
  Speaker 1: I'm not saying that they would be perfect for you
• 28:22
  Speaker 1: from the get go. You know, they might be really
• 28:24
  Speaker 1: expensive or they might not be a value to you,
• 28:27
  Speaker 1: But definitely look at them before choosing to cancel and
• 28:30
  Speaker 1: make sure that you are making the decision for you,
• 28:33
  Speaker 1: because too many times do I see people canceling their
• 28:36
  Speaker 1: super fund to find out they've also lost the cover
• 28:39
  Speaker 1: that they actually really wanted. Gee, I know, I just
• 28:42
  Speaker 1: focused a lot on insurances, and I'm not going to
• 28:44
  Speaker 1: continue that. I'm sorry. I No insurance is sexy. That's
• 28:47
  Speaker 1: why one of our episodes coming up is actually on
• 28:50
  Speaker 1: insurance and you can listen to that to get some
• 28:52
  Speaker 1: more information, but it is really important to take into consideration.
• 28:56
  Speaker 1: So I just wanted you to know here too. But
• 28:59
  Speaker 1: other things you need to take to consideration with your
• 29:01
  Speaker 1: super fund are the values that you hold, the beliefs
• 29:04
  Speaker 1: that you hold, and the things that you actually hold
• 29:06
  Speaker 1: close to your heart. So what are your goals for
• 29:09
  Speaker 1: the future. What should your investment risk profile look like?
• 29:12
  Speaker 1: What are the options that are available through your super fund?
• 29:15
  Speaker 1: Now I'm not going to tell you which super fun
• 29:18
  Speaker 1: to go with one because I'm a bit mean, but
• 29:20
  Speaker 1: also because I'm legally not allowed to. So if you
• 29:24
  Speaker 1: want to pick a super fund, do all your research,
• 29:26
  Speaker 1: understand what each fund does. Do a comparison. Often super
• 29:30
  Speaker 1: funds have comparisons on their website of them comparing themselves
• 29:34
  Speaker 1: to other super funds. Yep, don't take those as gospel
• 29:37
  Speaker 1: because they're often not comparing apples with apples.
• 29:40
  Speaker 2: Yes, a little bit of bias in there, I'm a
• 29:42
  Speaker 2: much just.
• 29:42
  Speaker 1: A little bit of bias. But then also people put
• 29:46
  Speaker 1: fees in in different ways, so they could say, hey,
• 29:48
  Speaker 1: our account fees are really low, but then they have
• 29:51
  Speaker 1: a really high administration fee, which they haven't disclosed because well,
• 29:54
  Speaker 1: it's not an account fee. Yes, it sneaky exactly. And
• 29:57
  Speaker 1: then some other super funds have performance fee, so if
• 30:00
  Speaker 1: they outperform the average, they take more, or some other
• 30:03
  Speaker 1: super funds have just a flat fee. So it's really
• 30:06
  Speaker 1: important to make sure that you're not comparing apples with pairs,
• 30:09
  Speaker 1: you're actually comparing apples with apples.
• 30:11
  Speaker 2: Alrighty V, this is making sense. So I now know
• 30:14
  Speaker 2: how I should be comparing my super funds by taking
• 30:17
  Speaker 2: into consideration risk profile, the insurances, the performance, and the fees.
• 30:22
  Speaker 2: Good work, wizard, thank you. But my last little question
• 30:26
  Speaker 2: is how much money I actually need in my super
• 30:28
  Speaker 2: fund to be able to retire?
• 30:30
  Speaker 1: So, G, I think this is a really interesting one
• 30:32
  Speaker 1: because it's very hard for us to start prioritizing something
• 30:35
  Speaker 1: if we don't have clarity on the final goal. I
• 30:39
  Speaker 1: harped on an episode or so ago about the importance
• 30:41
  Speaker 1: of setting smart goals, and it's really hard if we're
• 30:44
  Speaker 1: not specific about it. So to get into it, let's
• 30:47
  Speaker 1: be a little bit more technical. The ASFA estimates that
• 30:51
  Speaker 1: the average Australian superranuation balance needs to be six hundred
• 30:55
  Speaker 1: and forty thousand dollars for couples and five hundred and
• 30:58
  Speaker 1: forty thousand dollars through single which actually assumes that you
• 31:01
  Speaker 1: withdraw your superannuation as a lump sum and you receive
• 31:04
  Speaker 1: a part age pension. Now I'm pretty opinionated on this
• 31:08
  Speaker 1: because we are young, we have so much power and
• 31:11
  Speaker 1: the ability to create financial freedom for ourselves that I
• 31:14
  Speaker 1: don't necessarily agree with this.
• 31:16
  Speaker 2: Why don't you agree with that?
• 31:17
  Speaker 1: Fe So whilst they're saying that that's a comfortable retirement,
• 31:21
  Speaker 1: I think I need to contextualize it a little bit
• 31:23
  Speaker 1: so you understand why I think that. So, if you
• 31:26
  Speaker 1: had six hundred and forty thousand dollars invested within your
• 31:29
  Speaker 1: superannuation fund, that is making an average return of five percent,
• 31:34
  Speaker 1: that's about thirty two thousand dollars per year. And I
• 31:38
  Speaker 1: know that most of my clients and myself wouldn't be
• 31:41
  Speaker 1: very comfortable if I only had, between myself and my
• 31:44
  Speaker 1: partner thirty two thousand dollars to spend. So I think
• 31:48
  Speaker 1: it's important to look at this personally and work backwards.
• 31:52
  Speaker 1: Let's dream for a second, if you owned your family
• 31:54
  Speaker 1: home completely outright, which if that's a goal of yours,
• 31:57
  Speaker 1: let's do it. If you don't call let's just put
• 32:00
  Speaker 1: rent into the consideration later down the road. This is
• 32:03
  Speaker 1: going to change for each and every single person. So
• 32:05
  Speaker 1: some people might say, well, Victoria, thirty two thousand dollars
• 32:08
  Speaker 1: suits me fine, and I go okay, no problems as
• 32:10
  Speaker 1: long as you're on the same page and you know
• 32:11
  Speaker 1: what you're going to get at the end. Whereas I
• 32:14
  Speaker 1: have a lot of clients to say, well, Victoria, I
• 32:16
  Speaker 1: want to have a spending money of fifty thousand dollars
• 32:18
  Speaker 1: a year that I've done myself and I don't have
• 32:20
  Speaker 1: the age pension. Well, gee, that actually means that you
• 32:23
  Speaker 1: need to have a million dollars within your superannuation fund.
• 32:26
  Speaker 1: That's a lot more than what the average is recommending
• 32:29
  Speaker 1: for a couple. And if you extrapolate this out a
• 32:32
  Speaker 1: little bit, if you want an income of one hundred
• 32:34
  Speaker 1: thousand dollars a year, you actually need the goal of
• 32:37
  Speaker 1: having two million dollars combined in superannuation to achieve that.
• 32:41
  Speaker 2: Wow.
• 32:41
  Speaker 1: As an individual, and that's just super. As I mentioned
• 32:45
  Speaker 1: before on the podcast, I don't personally invest additional into
• 32:49
  Speaker 1: my superannuation fund. So my super maybe my values will change,
• 32:53
  Speaker 1: but my super isn't actually going to look like two
• 32:55
  Speaker 1: million dollars just yet, but that's as a whole. I
• 32:58
  Speaker 1: need two million dollars invested to generate that investment return,
• 33:02
  Speaker 1: and that's the investment return that replaces our salary. So
• 33:05
  Speaker 1: on the day you retire, you stop having an income
• 33:08
  Speaker 1: from an employer, and your investment takes over with the
• 33:11
  Speaker 1: dividends and the returns that it is making to supplement
• 33:15
  Speaker 1: the money that you were spending from your income. So
• 33:18
  Speaker 1: I think it's really important to point out we want
• 33:20
  Speaker 1: to enjoy that journey there as well. And I mentioned
• 33:23
  Speaker 1: before that I don't want to wait until I'm sixty
• 33:25
  Speaker 1: five to be able to access my funds. I want
• 33:27
  Speaker 1: people to have the freedom and flexibility that investment actually
• 33:31
  Speaker 1: affords us, so that means that my money is invested
• 33:34
  Speaker 1: outside of superannuation. I think it's important to point out
• 33:37
  Speaker 1: here that whilst the average life expectancy is increasing, the
• 33:40
  Speaker 1: potential retirement age is actually going to increase. There's a
• 33:44
  Speaker 1: lot of talk about that retirement age stretching out to
• 33:47
  Speaker 1: seventy exactly, and I think that we need to create
• 33:50
  Speaker 1: a life for ourselves that is financially stable, where we're
• 33:53
  Speaker 1: not dependent on an asset that we can only access
• 33:55
  Speaker 1: after a certain age, because let's be honest, getting to
• 33:59
  Speaker 1: the age of sixty five five is a privilege that
• 34:01
  Speaker 1: is actually denied to many people, and it's about the journey.
• 34:04
  Speaker 1: So how are we going to support ourselves before we
• 34:06
  Speaker 1: get to that age where we can access our superannuation.
• 34:09
  Speaker 1: So when I say if you want an income of
• 34:11
  Speaker 1: one hundred thousand dollars a year in retirement, that your
• 34:14
  Speaker 1: goal needs to be two million dollars in an investment,
• 34:17
  Speaker 1: I don't mean just in supranuation. That could be in
• 34:20
  Speaker 1: investments that you hold outside superranuation, but more often than not,
• 34:24
  Speaker 1: a bulk of what your future wealth is going to
• 34:26
  Speaker 1: be is going to be inside the superannuation vehicle. So
• 34:30
  Speaker 1: it's important to take that into consideration when you're investing
• 34:33
  Speaker 1: inside and outside of super and making sure that you're
• 34:36
  Speaker 1: prioritizing your super and looking after it in exactly the
• 34:39
  Speaker 1: same way you would if you were looking at an
• 34:41
  Speaker 1: investment that's held outside of superannuation.
• 34:47
  Speaker 2: Okay, now for the fun stuff. What good would a
• 34:50
  Speaker 2: money podcast be without the pervy bits. Now it's time
• 34:53
  Speaker 2: for money diary. Let's get into it.
• 34:55
  Speaker 4: I feel like my relationship with money is a pretty
• 34:57
  Speaker 4: positive one. My dad always was the one working and
• 35:01
  Speaker 4: my mum would stay at home, so I always wanted
• 35:04
  Speaker 4: to have my own money and be financially secure in myself.
• 35:09
  Speaker 4: I didn't want to have to depend on somebody else.
• 35:12
  Speaker 2: Today's money diary is from twenty two and self employed
• 35:15
  Speaker 2: who's just bought her first home.
• 35:17
  Speaker 4: I work in the beauty industry. I'm self employed and
• 35:20
  Speaker 4: I just rent a chair at somebody else's salon. However,
• 35:25
  Speaker 4: I'm in the process of building up my own brand
• 35:28
  Speaker 4: in the hopes of eventually working for myself in my
• 35:32
  Speaker 4: own salon. I'm currently living with my boyfriend and we've
• 35:37
  Speaker 4: just purchased a house and we settled last week.
• 35:40
  Speaker 2: Okay, so now we know what she does. Let's get
• 35:42
  Speaker 2: into the juicy stuff. How much does she earn and
• 35:45
  Speaker 2: how much is sitting in her bank account right now?
• 35:47
  Speaker 4: I earn around sixty thousand dollars a year, and my
• 35:51
  Speaker 4: partner earns about the same. I currently have about five
• 35:54
  Speaker 4: thousand dollars sitting in my savings account. However, if you
• 35:57
  Speaker 4: had asked me a couple of weeks ago, I would
• 36:00
  Speaker 4: have had forty thousand dollars saved. So I saved up
• 36:03
  Speaker 4: an extra amount just as a security blanket to fall
• 36:06
  Speaker 4: back on if anything had happened with the house. And
• 36:09
  Speaker 4: we were really fortunate that I had saved that amount
• 36:12
  Speaker 4: up because we had had a couple of issues with
• 36:14
  Speaker 4: getting our loan because I was self employed and I
• 36:17
  Speaker 4: needed to find thirty thousand dollars. So really fortunate to
• 36:21
  Speaker 4: have had that extra money there so we could cover
• 36:24
  Speaker 4: the rest of the loan and everything went through okay.
• 36:26
  Speaker 2: And what exactly happens to that money after it's been
• 36:29
  Speaker 2: deposited into her account.
• 36:31
  Speaker 4: After my money gets deposited into my bank account, I
• 36:34
  Speaker 4: have already automated transferred set up with my bank, so
• 36:39
  Speaker 4: the day that my money gets put into the three
• 36:42
  Speaker 4: separate bank accounts, money gets automatically transferred into my spending account,
• 36:47
  Speaker 4: our holiday account, and then our own personal savings accounts
• 36:50
  Speaker 4: as well, So all of that I don't have to touch.
• 36:53
  Speaker 4: I just have to make sure that I'm not going
• 36:56
  Speaker 4: over the amount that I've allocated for the week for
• 36:59
  Speaker 4: my own personal spending. I'm not really too sure about
• 37:02
  Speaker 4: where I should be putting that money that I am
• 37:04
  Speaker 4: putting aside for super whether I should be putting that
• 37:07
  Speaker 4: into a super fund or because I'm working for myself,
• 37:11
  Speaker 4: I'm lucky that I have options of where I want
• 37:13
  Speaker 4: to put it, whether I should be putting that into
• 37:16
  Speaker 4: my personal account or if I should be putting that
• 37:19
  Speaker 4: back into my business.
• 37:20
  Speaker 2: Okay, then, so how does twenty two and self employed
• 37:24
  Speaker 2: feel about investing? Does she invest? And if so, how?
• 37:27
  Speaker 1: Yes?
• 37:27
  Speaker 4: I do currently invest. However, I'm not investing too much
• 37:31
  Speaker 4: at the moment. I'm using a micro investing platform and
• 37:35
  Speaker 4: I have just thirty dollars a week coming out of
• 37:38
  Speaker 4: that into that account. Or so I use the roundup feature,
• 37:42
  Speaker 4: so whenever I pay for a coffee or whatever, it
• 37:44
  Speaker 4: just will add a little bit of money into my
• 37:47
  Speaker 4: investment account. I hadn't really been prioritizing it too much
• 37:51
  Speaker 4: as our main goal was to buy a house. So
• 37:54
  Speaker 4: we managed to save one hundred thousand dollars for our deposit.
• 37:58
  Speaker 4: So once we've said into the house and where used
• 38:01
  Speaker 4: to you know, how much is coming out? I'd like
• 38:04
  Speaker 4: to focus a little bit more about doing investing this year.
• 38:07
  Speaker 2: What about debts like credit cards or personal loans?
• 38:10
  Speaker 4: So I do have a mortgage, I'm currently owing five
• 38:14
  Speaker 4: hundred and eighty thousand dollars on the mortgage. I do
• 38:17
  Speaker 4: have a small hex debt which is about two five
• 38:20
  Speaker 4: hundred dollars, but it should get paid off by itself.
• 38:23
  Speaker 4: I'm not really focusing on paying that down.
• 38:26
  Speaker 2: Does twenty two and self employed have any good money
• 38:28
  Speaker 2: habits that she's especially proud of.
• 38:30
  Speaker 4: I would say that once I've set up a budget
• 38:33
  Speaker 4: and how much I'm allocating myself to spend, I won't
• 38:36
  Speaker 4: go over that. So I don't tend to take money
• 38:39
  Speaker 4: out of savings accounts or draw it out of other places.
• 38:43
  Speaker 4: I tend to try stick with how much I've allowed
• 38:47
  Speaker 4: myself to spend for the week. And also when we've
• 38:50
  Speaker 4: been trying to furnish the house, we've pretty much gotten
• 38:53
  Speaker 4: everything off Facebook Marketplace, so we've gotten everything secondhand. It's
• 38:58
  Speaker 4: all been really nice furniture and stuff. But before I
• 39:01
  Speaker 4: try buy anything new, I try look on Facebook Marketplace.
• 39:05
  Speaker 2: And what about her worst money habit?
• 39:07
  Speaker 4: So my worst money habit is definitely feeling anxiety around
• 39:13
  Speaker 4: spending money. I sometimes won't give myself permission to spend money,
• 39:17
  Speaker 4: or I'll feel really really guilty doing things like paying
• 39:21
  Speaker 4: to go to a holiday or you know, going out
• 39:23
  Speaker 4: for dinner. Or that sort of thing. So I'm really
• 39:26
  Speaker 4: trying this year to work on my mindset around money
• 39:29
  Speaker 4: and giving myself permission to spend and that, you know,
• 39:33
  Speaker 4: money is to be enjoyed. It's not just for me
• 39:36
  Speaker 4: to save. As long as I'm you know, setting future
• 39:39
  Speaker 4: me up, then that's good.
• 39:41
  Speaker 2: So what's Today's money Diarist actually saving for? What's her
• 39:44
  Speaker 2: big money goal?
• 39:45
  Speaker 4: My biggest goal was buying a house, so I'm really
• 39:48
  Speaker 4: fortunate to have been able to do that. So I
• 39:51
  Speaker 4: currently don't have any really big money goals. However, my
• 39:55
  Speaker 4: partner and I think that we would like to buy
• 39:57
  Speaker 4: an investment property within the next five years, and for
• 40:02
  Speaker 4: me personally, I would like to get into investing in shares.
• 40:06
  Speaker 2: So how would Today's Money Diarist rate her own relationship
• 40:08
  Speaker 2: with money if we forced her to give herself a greade?
• 40:11
  Speaker 4: I think I would give myself an A I've achieved
• 40:14
  Speaker 4: a lot that I've set out to do. However, I
• 40:16
  Speaker 4: would be more confident giving myself an A plus in
• 40:19
  Speaker 4: the future once I've gotten rid of a lot of
• 40:22
  Speaker 4: that anxiety around spending money, as well as once I'm
• 40:26
  Speaker 4: doing a little bit more of my own personal investments.
• 40:29
  Speaker 2: Twenty two and self employed. My goodness, Victoria, she is amazing.
• 40:33
  Speaker 1: She was incredible. Can you believe it?
• 40:36
  Speaker 2: No, I can't believe. You.
• 40:37
  Speaker 1: Imagine buying a house at twenty two, No, I cannot
• 40:40
  Speaker 1: and then being like, oh, okay, my next goal is
• 40:42
  Speaker 1: to buy an investment property. What an actual legend?
• 40:45
  Speaker 2: Baby?
• 40:45
  Speaker 1: Yeah, yeah, she's an absolute baby, but an absolute darling.
• 40:48
  Speaker 1: I cannot believe how well adjusted she is. And she's
• 40:52
  Speaker 1: just such a good saver. I'm so impressed that she's
• 40:55
  Speaker 1: self employed and totally across organizing her own tax and
• 40:59
  Speaker 1: her own suit and setting up separate bank accounts. And
• 41:02
  Speaker 1: I just feel like so many of us who are
• 41:04
  Speaker 1: self employed or thinking about it could learn a lot
• 41:08
  Speaker 1: from this. I mean, we did Outside Hustle's episode Yes
• 41:10
  Speaker 1: with Emma a couple of weeks ago, and that was
• 41:13
  Speaker 1: really really great and had some great tips. But I
• 41:15
  Speaker 1: just feel like this girl is really she's across it. Yeah,
• 41:19
  Speaker 1: she's totally across it already and totally doesn't need that episode.
• 41:23
  Speaker 2: Just regard that one.
• 41:24
  Speaker 1: No, just don't worry, don't waste your time, mate. No,
• 41:28
  Speaker 1: I thought that that was incredible, And what I love
• 41:30
  Speaker 1: the most is she actually put a priority on paying
• 41:32
  Speaker 1: super even though she said she didn't fully understand what
• 41:36
  Speaker 1: she was meant to be doing with it, or if
• 41:38
  Speaker 1: she should be doing more or if she should be
• 41:40
  Speaker 1: doing less. I think she probably should seek some advice
• 41:42
  Speaker 1: in that space so she knows exactly what she's doing
• 41:45
  Speaker 1: and she actually feels empowered around that decision. But the
• 41:48
  Speaker 1: fact that she's prioritizing it is genuinely something a lot
• 41:51
  Speaker 1: of freelancers and self employed people don't do because they
• 41:56
  Speaker 1: see cash flow coming into their business and they can
• 41:58
  Speaker 1: see more appropriate or more important thing that they believe
• 42:01
  Speaker 1: it needs to go to, and then they've missed out.
• 42:04
  Speaker 1: And that's actually future you missing out on it. And
• 42:07
  Speaker 1: I think it's really important to see that that's actually
• 42:10
  Speaker 1: a priority now because superannuation compounds, it grows. It is
• 42:14
  Speaker 1: something that we need to prioritize now. And given she's
• 42:16
  Speaker 1: twenty two and already across this, like, I have no
• 42:19
  Speaker 1: doubt she's going to be just fine.
• 42:21
  Speaker 2: Yes, was there anything you think she could improve upon?
• 42:25
  Speaker 1: I loved that her feedback was that she didn't give
• 42:28
  Speaker 1: herself an a plus yet not for any other reason
• 42:32
  Speaker 1: than she just wanted to get across her own personal
• 42:34
  Speaker 1: investing and wanted to feel more confident around money making decisions.
• 42:38
  Speaker 1: She mentioned that she got a little bit of anxiety
• 42:40
  Speaker 1: around making money decisions, and I just think that's a
• 42:43
  Speaker 1: really great thing to be aware of. It's something that
• 42:46
  Speaker 1: if you feel like that, reach out get help for that,
• 42:49
  Speaker 1: because that's something that a lot of people stick their
• 42:51
  Speaker 1: heads in the sand about and don't actually action change
• 42:54
  Speaker 1: off of. And if you're a little bit worried about
• 42:57
  Speaker 1: the small things, that also, just like investment, compound, so
• 43:01
  Speaker 1: the small things become bigger things, and then those big
• 43:03
  Speaker 1: things become really big things. So I think that her
• 43:05
  Speaker 1: getting on top of her money anxiety at the very
• 43:08
  Speaker 1: beginning of her journey is essential. And I really love
• 43:10
  Speaker 1: that she was self aware to know.
• 43:12
  Speaker 2: That she's amazing. It's a big tick from me twenty
• 43:14
  Speaker 2: two and self employed. I think you've got Victoria's approval
• 43:16
  Speaker 2: over there as well.
• 43:17
  Speaker 1: Absolutely, But I also think it's really important to note
• 43:21
  Speaker 1: she did live at home. You know, not everyone has that,
• 43:23
  Speaker 1: But she's obviously used the resources that she had access
• 43:27
  Speaker 1: to to the best.
• 43:28
  Speaker 2: Yeah, she's made the most.
• 43:29
  Speaker 1: Yeah, yeh, Yeah, she's absolutely made the most of them.
• 43:31
  Speaker 1: And I think that that's really impressive. So as much
• 43:34
  Speaker 1: as she is twenty two and has just brought her
• 43:36
  Speaker 1: first home, I think it's really important that we don't
• 43:38
  Speaker 1: then go, oh, well, I'm twenty two. I'm definitely not
• 43:41
  Speaker 1: in that city. Yeah, exactly, that's absolutely not the case.
• 43:44
  Speaker 1: Not everyone has access to the same resources and tools,
• 43:47
  Speaker 1: and we're all just doing the best that we can.
• 43:49
  Speaker 1: It's just really great for her that that's her situation,
• 43:52
  Speaker 1: and I'm so proud of that. I see that as
• 43:54
  Speaker 1: quite inspirational.
• 43:58
  Speaker 2: Thanks so much for the amazing twenty two and self employed.
• 44:01
  Speaker 2: For sharing You're a wizard. But sadly that is all
• 44:04
  Speaker 2: we have time for today. So just before we head off,
• 44:07
  Speaker 2: we're going to need to wrap de boring but important stuff.
• 44:10
  Speaker 2: The advice shared on She's on the Money is general
• 44:13
  Speaker 2: in nature and does not consider your individual circumstances. She's
• 44:16
  Speaker 2: on the Money exists purely for educational purposes and should
• 44:19
  Speaker 2: not be relied upon to make an investment or financial decision.
• 44:23
  Speaker 2: And yes, don't worry, we promise Victoria to find is
• 44:26
  Speaker 2: an authorized representative of Consultant Financial Advisors Proprietary Limited eighty
• 44:31
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• 44:34
  Speaker 2: to five AFSL two three zero three two three and
• 44:37
  Speaker 2: thank you, of course to our friend Ryan John for
• 44:40
  Speaker 2: helping us produce this episode.
• 44:41
  Speaker 1: We would love it if you joined our Facebook group,
• 44:44
  Speaker 1: where our community shares money tips and tricks every single day,
• 44:47
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• 44:50
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• 44:54
  Speaker 1: on Instagram at She's on the Money.
• 44:56
  Speaker 2: Thanks so much for listening, guys, See you next week, See.
• 44:59
  Speaker 1: You next week.
• 45:00
  Speaker 2: K