Latest / She's On The Money / How to get your super back on track if you made an early withdrawal

Transcript

How to get your super back on track if you made an early withdrawal · She's On The Money

0:00
Speaker 1: She's on the Money, She's on the Money.
0:17
Speaker 2: Hello, and welcome to She's on the Money, the podcast
0:20
Speaker 2: The Millennials who Want Financial Freedom. Now, you may recall
0:24
Speaker 2: last year a small thing happened, little old COVID nineteen.
0:28
Speaker 3: Really yeah, I don't even know. Yeah, i'd like get
0:31
Speaker 3: someone a friend of a friend.
0:33
Speaker 1: Yeah.
0:33
Speaker 3: Yeah.
0:34
Speaker 2: But it took a huge toll on people right across
0:36
Speaker 2: the globe, and one of the most significant tolls, beyond
0:39
Speaker 2: obviously physical and mental health, was definitely financial.
0:43
Speaker 1: So to help out the significant number of us who
0:45
Speaker 1: were left.
0:46
Speaker 2: Financially battered, in twenty twenty, the government allowed eligible Australians
0:50
Speaker 2: to access up to twenty K of their Super, which
0:52
Speaker 2: is a lot of money.
0:53
Speaker 3: It is a lot of money. So you could access
0:56
Speaker 3: ten thousand dollars of that in the first financial year
0:58
Speaker 3: that it was available, in ten thousand doors in the
1:00
Speaker 3: second financial year, so you could like dip twice.
1:03
Speaker 2: If you were one of the three million Aussies who
1:05
Speaker 2: did take money out of their superannuation. Today, we're going
1:08
Speaker 2: to explain why it's so important that we top that
1:11
Speaker 2: money back up, and we're going to tell you exactly
1:13
Speaker 2: how to do it. That we are I know, I'm
1:15
Speaker 2: so excited. But before we do that, last week, we
1:17
Speaker 2: held an amazing webinar on investing.
1:20
Speaker 3: Oh yes we did. It was so so.
1:22
Speaker 2: Much fun with the team at Superhero. It was fantastic,
1:26
Speaker 2: and I thought it was interesting to bring up because
1:28
Speaker 2: we've said this before, but a lot of people don't
1:30
Speaker 2: realize superannuation is actually an investment exactly.
1:33
Speaker 3: And I mentioned it on that webinar because that is
1:36
Speaker 3: something that I hop on and on and on about
1:38
Speaker 3: and I'm sure I will in this episode as well.
1:40
Speaker 3: But to all of you who actually joined us, and
1:43
Speaker 3: there was a very large chunk of you who did
1:45
Speaker 3: getting the vibe that they liked an investment webinar.
1:48
Speaker 2: Yeah, getting that vibe too and picking up what they're
1:50
Speaker 2: putting down.
1:51
Speaker 3: So I absolutely love that webinar. One because I really
1:54
Speaker 3: like hanging out with the team at Superhero, Two because
1:56
Speaker 3: I really like hanging out with Cheese on the money community.
1:58
Speaker 3: And three because I literally we could not talk enough
2:01
Speaker 3: about investment. But if you did miss that, we have
2:03
Speaker 3: just uploaded that webinar to our YouTube so that you
2:06
Speaker 3: can replay it. So if you missed it, you don't
2:07
Speaker 3: actually have to miss out long term or jess hot tip.
2:11
Speaker 3: You could pretend it's a podcast and put on in
2:13
Speaker 3: the car and just listen to it.
2:15
Speaker 2: That's actually a really good idea. Janius, it was a
2:17
Speaker 2: lengthy boy. I think it was about an hour long.
2:19
Speaker 2: Oh my gosh, it was so long. But it was
2:21
Speaker 2: packed with fun and heaps are really great info and investing.
2:24
Speaker 2: But given we just had a chat about this, I
2:26
Speaker 2: don't know if you named it me before.
2:27
Speaker 3: I don't think I did. I just expect everybody knows
2:30
Speaker 3: it's not George King.
2:31
Speaker 1: Now it's not Georgia King.
2:33
Speaker 3: How is it.
2:33
Speaker 1: It's Jessica Ricky.
2:35
Speaker 3: I always call you jessic Rici.
2:36
Speaker 2: That is the correct pronunciation if you are from Italy,
2:39
Speaker 2: which is where that name heralds from. But as always,
2:42
Speaker 2: I am joined by the gorgeous, the delightful.
2:45
Speaker 3: Oh don't you pull a Georgia King and be over
2:48
Speaker 3: complimentary here with victory. Yes, I'm a financial advisor and
2:53
Speaker 3: actually I've been on pretty much every single podcast. I've
2:57
Speaker 3: never missed a deep dive one Georgia King has, though,
3:00
Speaker 3: George King, come.
3:01
Speaker 2: On, let's jump straight into it. I think it's important
3:04
Speaker 2: to contextualize this chat with a bit of a refresher
3:06
Speaker 2: on the mechanics of Super and White so important, V
3:09
Speaker 2: take it away.
3:10
Speaker 3: Okay, I think that is a really good place to
3:12
Speaker 3: start because we still get so many questions about Super,
3:15
Speaker 3: and I reckon it's almost about time for us to
3:17
Speaker 3: have a little bit of a Super refresher whole pod episode.
3:21
Speaker 3: But Super really simply is an investment that is put
3:24
Speaker 3: aside for us for our retirement. It's the money that
3:27
Speaker 3: we are going to live off when we're no longer
3:29
Speaker 3: working every single day when you're played by your employer,
3:33
Speaker 3: a portion of your income which is usually nine point
3:35
Speaker 3: five percent, which is known as the Superannuation guarantee, which
3:38
Speaker 3: is apparently going up in July. We will talk about
3:40
Speaker 3: that a little bit later. More money, Yeah, you're getting
3:43
Speaker 3: more Superper, my friends. That goes straight into our super
3:46
Speaker 3: which we can't touch until retirement. And unlike what a
3:49
Speaker 3: lot of people think, which is just like, oh, it's
3:51
Speaker 3: a savings account for my retirement, this money is actually
3:55
Speaker 3: invested on your behalf. So it is in your best
3:58
Speaker 3: interest to make sure you know what that investment is
4:01
Speaker 3: and how it's held, and what the performance on that is,
4:04
Speaker 3: because that performance is in direct relation to what your
4:07
Speaker 3: retirement balance is going to be and essentially the lifestyle
4:09
Speaker 3: that you can have, and a simple change now might
4:12
Speaker 3: put you hundreds of thousands of dollars ahead in the
4:15
Speaker 3: future without you even having to contribute more So, pay attention.
4:18
Speaker 3: It is so so important. But it's important because I
4:21
Speaker 3: care a lot about future you you, Jessica, but also
4:24
Speaker 3: the entire community. And it's important because a lot of
4:27
Speaker 3: us just write SUPER off a something that we shouldn't
4:29
Speaker 3: care about until retirement. But as you know, it is
4:33
Speaker 3: arguably one of the things that I'm most passionate about.
4:35
Speaker 2: Absolutely, so I'm kind of picking up here that super
4:38
Speaker 2: is important.
4:39
Speaker 3: Oh are you on what I'm putting down on?
4:41
Speaker 1: Percent? I am now.
4:43
Speaker 2: I know that obviously you're super passionate about this topic.
4:46
Speaker 2: And when this announcement came out last year, you definitely
4:48
Speaker 2: had some thoughts.
4:49
Speaker 3: I didn't come worth your thoughts.
4:52
Speaker 1: Share them with us.
4:53
Speaker 3: Look, I am going to preface this with it is
4:55
Speaker 3: a very entitled opinion of me to be able to
4:58
Speaker 3: say don't touch it. And for a lot of people
5:00
Speaker 3: that was the right decision. There are a lot of
5:03
Speaker 3: people that I know accessed that and it was the
5:05
Speaker 3: financial lifeline that they needed at that time, and there
5:08
Speaker 3: was honestly no other option. I mean, we can't have
5:12
Speaker 3: expected the government to just give everybody going through financial
5:16
Speaker 3: distress twenty thousand dollars to top them up, because even
5:20
Speaker 3: if we wanted to, we just don't have financial resources
5:22
Speaker 3: like that. Unfortunately, they did a lot. Arguably there are
5:25
Speaker 3: a lot of holes in the argument and what they
5:28
Speaker 3: put forward, but with job Keeper and job Seeker, I
5:30
Speaker 3: genuinely feel really lucky to be in Australian and have
5:33
Speaker 3: you know, if I needed it, had access to those resources.
5:37
Speaker 3: Like I'm sure lots of people who are listening like, yes,
5:39
Speaker 3: job Keeper literally saved my butt.
5:41
Speaker 2: Yeah, it's a hard one because so many people were
5:45
Speaker 2: the industries, like whole industries.
5:47
Speaker 1: Just shut down.
5:48
Speaker 2: So absolutely I can understand why when the government said, hey,
5:51
Speaker 2: like you can take this money ten to twenty thousand dollars,
5:54
Speaker 2: take it out if you need it. I could see
5:56
Speaker 2: people being super excited by that totally. But there were
5:59
Speaker 2: two mind frames when it came to that. There were
6:02
Speaker 2: the people who were just like.
6:03
Speaker 3: Oh my gosh, free money. I can access ten or
6:06
Speaker 3: twenty thousand dollars from my super I don't care, and
6:09
Speaker 3: then there were the people that were like, oh my gosh,
6:11
Speaker 3: I definitely need this financial resource, but I'm really stressed
6:14
Speaker 3: about taking it away from future me. So this episode
6:17
Speaker 3: is for both of those parties. The parties that didn't
6:19
Speaker 3: care about it, because we're telling you that you should
6:21
Speaker 3: and you need to fix it, but also the parties
6:23
Speaker 3: and the listeners that are a little bit overwhelmed because
6:25
Speaker 3: they're saying, look, I needed to take that money, Victoria.
6:29
Speaker 3: I've got you. I'm not saying that was the wrong
6:31
Speaker 3: decision at all, but I can also see why you'd
6:33
Speaker 3: be stressed about replenishing it. And that's what this episode
6:35
Speaker 3: is about, so that we don't have to stress long term,
6:38
Speaker 3: because as much as taking that amount out of Super
6:40
Speaker 3: right now is going to impact future you, it doesn't have.
6:44
Speaker 2: To if we replenish it reallyant Now, we do love
6:46
Speaker 2: a good little stat here at She's on the money.
6:49
Speaker 3: Are you going to become the new resident stat Scale?
6:51
Speaker 3: Are you trying to take Georgia King's job?
6:53
Speaker 1: I could never I could absolutely never ant.
6:55
Speaker 3: But lots of people, let's just cover this really quickly,
6:58
Speaker 3: because you guys are thinking it was Jess on the
7:00
Speaker 3: pod today as opposed to Georgia King. So many people
7:03
Speaker 3: are like, well, why don't we see more of Georgia.
7:04
Speaker 2: I know, to be honest, I wish you would see
7:06
Speaker 2: more of Georgia. I wish I would see more of Georgia.
7:08
Speaker 2: I know she does, in fact have an awesome, completely
7:11
Speaker 2: different full time job outside if she's on the money.
7:13
Speaker 3: Yeah, in a very impressive media company. Yeah.
7:16
Speaker 1: Like she's a deadert legend.
7:17
Speaker 2: And unfortunately that means that everybody, not just us, wants
7:20
Speaker 2: a piece of the Georgia pie exactly.
7:23
Speaker 3: So it's not because we don't want you having Georgia.
7:25
Speaker 3: She's not going anywhere, my friends. But turns out the
7:29
Speaker 3: g King.
7:30
Speaker 2: She's a work, she's a busy lady. She's a land
7:33
Speaker 2: that means you get me. Sorry, it's a.
7:35
Speaker 3: Very good substitute. I'm not gonna lie. Kind of like
7:38
Speaker 3: when people are like, oh, sorry, we don't have your
7:39
Speaker 3: favorite pizza, but we've got your favorite pizza that you've
7:42
Speaker 3: forgotten about, and they're like, aha.
7:44
Speaker 2: I only eat one kind of pizza and it's my
7:45
Speaker 2: greata so terrible analogy and movie, so bland, what have
7:49
Speaker 2: you got for me? So let's work off of the
7:51
Speaker 2: base rate. Of ten thousand dollars, if someone had withdrawn
7:53
Speaker 2: that money from their super now, they might go okay, like,
7:56
Speaker 2: in the grand scheme of things, ten thousand dollars, perhaps
7:58
Speaker 2: isn't that much money. However, if we take that ten
8:02
Speaker 2: thousand dollars and apply the magic of compound interest.
8:05
Speaker 3: Yeah, you're going to make me do quick stats or
8:07
Speaker 3: have you done this? Stay well, I was just about
8:09
Speaker 3: to say to you, how many years do you want it?
8:11
Speaker 2: Over?
8:11
Speaker 1: Thirty?
8:12
Speaker 3: So I've actually done that. If you just took ten
8:15
Speaker 3: thousand dollars over forty years, which is about the period
8:19
Speaker 3: of time that an average twenty five year old will
8:21
Speaker 3: have in the working market before they do decide to retire,
8:25
Speaker 3: at an interest rate of seven and a half percent,
8:27
Speaker 3: which is pretty standard when it comes to predicting into
8:30
Speaker 3: the future. You're taking nearly two hundred thousand dollars or
8:34
Speaker 3: future you.
8:35
Speaker 2: That's so much money. And I really feel like, and
8:39
Speaker 2: maybe it's just me and not knowing that much about money,
8:42
Speaker 2: but I didn't see a lot of education from the
8:45
Speaker 2: government or anywhere else apart from what we spoke about
8:49
Speaker 2: around the impact of that money long term.
8:52
Speaker 3: One hundred percent, and that is what I was getting
8:55
Speaker 3: up in arms with I was very grateful for the
8:57
Speaker 3: opportunity to exist. That meant that people didn't go into debt,
9:01
Speaker 3: and then people didn't have to borrow money that they
9:03
Speaker 3: couldn't afford to pay back, because at the end of
9:05
Speaker 3: the day, there's obviously the caveat that you will lose
9:08
Speaker 3: the opportunity cost of having that invested for the long term,
9:12
Speaker 3: but you're not lumped with a twenty thousand dollars personal
9:14
Speaker 3: loan that you're going to then struggle to pay back.
9:16
Speaker 3: So I really liked it, but I really didn't like
9:19
Speaker 3: that there wasn't this thinking period built into it. There
9:22
Speaker 3: wasn't this you know, self reflection period where the government
9:25
Speaker 3: was saying, well, hey, jes do you actually need that,
9:27
Speaker 3: Like what does that look like to you personally? Have
9:31
Speaker 3: you thought about the impacts of taking this out? They
9:33
Speaker 3: kind of were just like, oh, by the way, you
9:34
Speaker 3: can take twenty grand out of super and so many
9:36
Speaker 3: people like, oh my gosh, yes, great free money. People
9:38
Speaker 3: got excited, like I know people personally who took that
9:40
Speaker 3: money out to perhaps purchase a.
9:42
Speaker 1: New car or oh yeah, I do other things like that.
9:45
Speaker 2: And interestingly, the ABC actually reported in September last year
9:49
Speaker 2: that more than a quarter of the people who access
9:51
Speaker 2: superannuation under the early release scheme made that decision within
9:55
Speaker 2: a day, So that's twenty four hours, which to me
9:58
Speaker 2: kind of indicates that this was a bit of a
10:00
Speaker 2: decision from people who didn't take into consideration those long
10:03
Speaker 2: term impacts.
10:05
Speaker 1: Do you kind of agree with that.
10:06
Speaker 3: Or I absolutely agree with that. I think that people
10:09
Speaker 3: automatically just thought great, free money, like we can withdraw that,
10:12
Speaker 3: or the people that were really struggling that genuinely needed that,
10:15
Speaker 3: And I do really want to drive home that I'm
10:17
Speaker 3: so fine with you taking it out because you needed
10:20
Speaker 3: it for a very valid reason. But a new car,
10:23
Speaker 3: a house deposit, a future holiday, those things are not appropriate.
10:27
Speaker 3: I've got people in the community that messaged me. They're like,
10:29
Speaker 3: it's great, I took that ten K out, I got
10:31
Speaker 3: a new lounge suite so I could have a really
10:34
Speaker 3: comfortable COVID and bought a new TV. I'm like, what
10:36
Speaker 3: are you doing? Yeah, genuinely, and you guys know who
10:39
Speaker 3: you are, because I actually respond to my dms like that.
10:42
Speaker 3: I'm I was like, ah, look, that's probably not what
10:44
Speaker 3: I would have done, but I think that people automatically
10:47
Speaker 3: just saw it as the free money, but the people
10:49
Speaker 3: who really needed it were forced into making a decision
10:52
Speaker 3: really quickly without having their options put in front of
10:55
Speaker 3: them and the education put in front of them that
10:57
Speaker 3: I genuinely think they deserved. So if you were taking
11:00
Speaker 3: it out, you deserve to have someone say, look, I
11:02
Speaker 3: can completely understand that you need to take this ten
11:05
Speaker 3: thousand dollars out, but have you thought about how you're
11:07
Speaker 3: going to potentially replenish that, because that is a really
11:10
Speaker 3: big chunk of super that you're taking away from future.
11:13
Speaker 2: You Absolutely, and obviously, as we said, we fully support
11:17
Speaker 2: people being able to do what they had to do.
11:18
Speaker 2: COVID was a really tough time, and I think it's
11:20
Speaker 2: hard because there was not a lot of people who
11:23
Speaker 2: had someone there able to hold their hand through it.
11:25
Speaker 2: Because it was unprecedented, and I'm so sick of that word, the.
11:29
Speaker 1: Buzzword of twenty twenty.
11:30
Speaker 3: Okay, move on, Jessica, no more unprecedented emails or words
11:34
Speaker 3: or anything. Please.
11:36
Speaker 2: Well, before we do get into how we should be
11:38
Speaker 2: fixing that situation, if we did happen to take money
11:40
Speaker 2: out during COVID, talk to me a bit more about
11:43
Speaker 2: the people who took the money out for our house
11:45
Speaker 2: deposits or to pay off debts to me. I can
11:48
Speaker 2: kind of see that being kind of a smart idea
11:50
Speaker 2: on the surface, but was it actually.
11:53
Speaker 3: Look it could have been, because there are a lot
11:56
Speaker 3: of people and for example, I had someone in my
11:59
Speaker 3: dams really read bit stressed that they'd taken it out
12:03
Speaker 3: to pay off their credit card because they had like
12:05
Speaker 3: a nine thousand dollar credit card. Fine. I can see
12:08
Speaker 3: why you'd want to take ten thousand dollars out and
12:10
Speaker 3: put it on your credit card to extinguish that debt completely,
12:14
Speaker 3: because credit card debt runs are like eighteen percent on average,
12:17
Speaker 3: I think, and that's ridiculous. I get that, But those
12:20
Speaker 3: credit card repayments that you were making now need to
12:22
Speaker 3: go into your superannuation to replenish that amount, so you're
12:25
Speaker 3: paying yourself instead of going okay, cool, I got out
12:27
Speaker 3: of that situation without impacting myself at all, because you did.
12:32
Speaker 3: You took it off future you, and that ten thousand
12:34
Speaker 3: dollars is actually two one hundred thousand dollars that you've
12:38
Speaker 3: taken off future you. And I know the interest repayments suck,
12:42
Speaker 3: but for me, i'd really question it. I'd try and
12:44
Speaker 3: work out how to potentially do a balanced transfer on
12:48
Speaker 3: my credit card to a null interest credit card, or
12:51
Speaker 3: taking out a personal loan at a smaller percentage rate
12:53
Speaker 3: so that I could better manage that before going and
12:56
Speaker 3: taking out SUPER and saying, Okay, well that's the solution
12:59
Speaker 3: to this. I just want people to have all their
13:01
Speaker 3: options so they know what they can do. But when
13:04
Speaker 3: it came to the people that were taking it out
13:06
Speaker 3: for homes, I'm probably a little bit more controversial in
13:11
Speaker 3: my opinion of this because I don't agree with it
13:13
Speaker 3: at all. So some people were tempted and they did.
13:17
Speaker 3: They have successfully taken money out of their SUPER under
13:19
Speaker 3: the temporary COVID nineteen hardship measure that the federal government
13:23
Speaker 3: released to us, and they used it to purchase a home.
13:25
Speaker 3: And now, if you go onto the ATO website, which
13:28
Speaker 3: obviously I'm a dream I love that website. I go
13:31
Speaker 3: there all the time. The intent of that superanuation early
13:35
Speaker 3: release scheme was actually to support people who were adversely
13:39
Speaker 3: financially impacted by COVID nineteen that were not able to
13:43
Speaker 3: meet their expenses, and that was to cover those expenses.
13:46
Speaker 2: And that's like basic necessity that's right back, necessities like
13:49
Speaker 2: I cannot pay rent, I cannot put food on the table,
13:52
Speaker 2: I cannot do those things.
13:53
Speaker 3: But some people were taking it out and putting it
13:55
Speaker 3: towards their home deposits, right And I've spoken to mortgage
13:58
Speaker 3: brokers and some of them have said that these people
14:01
Speaker 3: that are doing that, the banks aren't approving mortgages because
14:04
Speaker 3: they're saying, really, you know, how can you serve us alone?
14:07
Speaker 3: Because on your credit history it comes up that they've
14:09
Speaker 3: nominated themselves as experiencing financial hardship. Why would a bank
14:13
Speaker 3: want a loan to you? And by doing so, they're
14:16
Speaker 3: not actually able to shut themselves on the foot exactly
14:18
Speaker 3: because due to responsible lending laws that exist here in Australia,
14:22
Speaker 3: like that would actually not be a viable thing for
14:24
Speaker 3: someone to lend you. Right.
14:26
Speaker 2: Well, of course, if you're saying I can't afford to
14:28
Speaker 2: pay my rent, I need this money from my superannuation, yeah,
14:31
Speaker 2: they're probably going to say, well, you can't afford to
14:32
Speaker 2: pay for a house deposit.
14:33
Speaker 3: If you've just literally put your hand up to the
14:35
Speaker 3: government and said you're experiencing significant financial hardship, so much
14:39
Speaker 3: so that you need to withdraw on your superannuation. That
14:41
Speaker 3: being said, yes, I actually have heard from the community
14:44
Speaker 3: that a number of people have successfully withdrawn from superannuation
14:48
Speaker 3: put it towards a house deposit and they haven't not
14:51
Speaker 3: been able to get alone. They have got alone. But
14:54
Speaker 3: I think it's very touch and go. There's skinna stretched
14:57
Speaker 3: play exactly. And as someone who literally owns mortgage breaking
15:00
Speaker 3: business and I have a licensed business in this area,
15:03
Speaker 3: I would not want any of my team to ever
15:07
Speaker 3: write a loan to somebody going through that because it
15:09
Speaker 3: is not in line with the responsible lending laws and
15:11
Speaker 3: I wouldn't feel comfortable with it. I'm just going to
15:13
Speaker 3: be brutal and say I wouldn't allow it to happen.
15:15
Speaker 3: Even if the bank was willing to do it, I
15:17
Speaker 3: wouldn't let out him write that loan.
15:19
Speaker 2: Well, obviously quite a bit to think about there, and
15:21
Speaker 2: we're going to touch back after this break to check
15:24
Speaker 2: in with the Aussie economy, see where the housing market
15:26
Speaker 2: is at, and address the way that you suggest rebuilding Super.
15:29
Speaker 2: If you were one of those almost three million people
15:31
Speaker 2: who dipped into super last year, so do not go anywhere,
15:40
Speaker 2: all right, be let's not mess about tell me how
15:43
Speaker 2: do we fix things if we have taken money out
15:45
Speaker 2: of superannuation.
15:46
Speaker 3: Okay, so earlier in the episode, I literally said that
15:49
Speaker 3: ten thousand dollars with drawn out of superannuation for a
15:52
Speaker 3: twenty five year old would cost them about two hundred
15:54
Speaker 3: thousand dollars in retirement, which is wild and terrifying because
15:58
Speaker 3: of how much imagine working and being like, Jess, you
16:01
Speaker 3: need to save two hundred thousand dollars, I can't fathom it,
16:04
Speaker 3: Like it's money, so much money, right, So what we
16:08
Speaker 3: want to do is actually recover this, and it is
16:10
Speaker 3: so simple. The answer is actually salary sacrificing, which we
16:13
Speaker 3: did an episode on recently, Jess.
16:15
Speaker 2: If you haven't heard it, go back and listen. It's
16:17
Speaker 2: a really good episode.
16:18
Speaker 3: Yes, which means go and have a chat to your
16:20
Speaker 3: employer about replenishing that. If you're not currently employed. Please
16:24
Speaker 3: don't stress just yet, because I know a lot of
16:27
Speaker 3: people are still experiencing significant financial hardship from COVID nineteen.
16:31
Speaker 3: So please don't feel like I'm like, ah, do it now,
16:33
Speaker 3: you have to, But this is just something to think
16:35
Speaker 3: about once you do have stable employment and stable cash
16:38
Speaker 3: flow and you're out of personal debt. That is a
16:41
Speaker 3: very big caveat on it. If you have a credit card,
16:43
Speaker 3: if you have a person alone, please prioritize those before
16:46
Speaker 3: you prioritize investing for yourself, because you're shooting yourselves in
16:50
Speaker 3: the foot if you're not prioritizing that over investment. Just
16:54
Speaker 3: because you're putting money away and it's potentially making seven
16:56
Speaker 3: and a half percent each year, that doesn't mean that
16:58
Speaker 3: it is a better option than paying off your nineteen
17:01
Speaker 3: percent interest rate on your credit card or your personal loan,
17:04
Speaker 3: which is usually more than seven and a half percent,
17:06
Speaker 3: which is a guaranteed thing, right, So pay off your
17:09
Speaker 3: personal debt and your personal loans first. That doesn't include
17:12
Speaker 3: okay debt like home loans or hex debt or any
17:15
Speaker 3: of that. We are talking bad debt, which is personal debt.
17:19
Speaker 3: So do that and then make a plan to contribute
17:22
Speaker 3: more to superannuation.
17:24
Speaker 2: And we did do a really helpful video on your
17:26
Speaker 2: YouTube channel to go all about the different ways that
17:30
Speaker 2: you can make additional contributions. I know that there's a
17:32
Speaker 2: lot to cover in that realm. It's almost a whole
17:34
Speaker 2: episode on its own, So if you do want a
17:36
Speaker 2: bit more information on that will puppet in the show notes,
17:38
Speaker 2: definitely check it out wether Watch absolutely So.
17:41
Speaker 3: There are a number of ways we can do this right.
17:43
Speaker 3: You can approach your employer if you've got one currently,
17:45
Speaker 3: and ask them to start salary sacrificing. For me, it
17:49
Speaker 3: would be about working backwards. If you've just taken ten
17:51
Speaker 3: thousand dollars out, okay, no problems. How quickly do you
17:55
Speaker 3: want to replenish that amount of money? Do you want
17:57
Speaker 3: it replenished in a year? Can you afford to salary
18:00
Speaker 3: sacrifice eight hundred and thirty ish dollars a month? If
18:04
Speaker 3: the answer is no, change your time frame. If you
18:06
Speaker 3: change your time frame by two years, that obviously becomes
18:09
Speaker 3: about four hundred and fifteen dollars that you need to
18:11
Speaker 3: salary sacrifice each month to get that ten thousand dollars
18:15
Speaker 3: back in there, above and beyond what your current superannuation
18:18
Speaker 3: guarantee is or what you're currently contributing to Super. So
18:22
Speaker 3: it does sound like a lot, but you could break
18:24
Speaker 3: it up over a little while, or potentially even make
18:27
Speaker 3: that goal a bit bigger to make up for the
18:29
Speaker 3: lost interest and the compounding interest that you would have
18:31
Speaker 3: lost during that time. Completely up to you. But it's
18:35
Speaker 3: all about creating a plan and saying, Okay, I'm going
18:38
Speaker 3: to do this. How much can I afford. If it's
18:40
Speaker 3: just two hundred dollars a month or one hundred dollars
18:42
Speaker 3: a month, that is fine, but start recontributing. And this
18:46
Speaker 3: is obviously not financial advice, it is an idea. It
18:49
Speaker 3: is if you want to replenish your super this is
18:52
Speaker 3: how you would facilitate that. And for me, it's about
18:55
Speaker 3: going all right, salary sacrificing, very easy way to do it,
18:58
Speaker 3: because it then becomes a part of your employer's obligations
19:02
Speaker 3: to you, so you don't even see the money coming
19:04
Speaker 3: into your account, like I said, and forget exactly if
19:06
Speaker 3: you want to be more hands on and actually see
19:09
Speaker 3: it come into your account, make that decision every month.
19:11
Speaker 3: Because I know a lot of people in our community
19:13
Speaker 3: had variable income. Some months they'll have an invoice coming
19:16
Speaker 3: and they make one hundred dollars and some months they
19:18
Speaker 3: might make, you know, ten thousand dollars, and that's really
19:21
Speaker 3: fair for you to want to control that, in which
19:23
Speaker 3: case you could make voluntary contributions to supranuation, which means
19:27
Speaker 3: you just get your supbranuation funds bank details and transfer
19:30
Speaker 3: money in and it goes into your fund and it's
19:32
Speaker 3: all automated, which is really easy. You can just essentially
19:35
Speaker 3: use bpay if you want, and that is a really
19:37
Speaker 3: good option. But please make sure to keep track of
19:40
Speaker 3: it because you can claim it on tax so that
19:41
Speaker 3: you make the difference between the taxable rate inside of
19:44
Speaker 3: supranuation and the tax rate that you're currently being charged
19:47
Speaker 3: for your income. So definitely keep that in mind and
19:50
Speaker 3: don't forget to tell your accountants when June thirty comes.
19:53
Speaker 3: But then also you could invest outside of supranuation. So say, like, look, Victoria,
19:58
Speaker 3: I've listened to all the podcasts, like I know I
20:01
Speaker 3: should be investing again, and I don't really want to
20:03
Speaker 3: put it back in super because that's not the right
20:05
Speaker 3: decision for me personally. That's not something I can decide
20:08
Speaker 3: for you. But you could use like our friends at
20:10
Speaker 3: Superhero for example, and start investing regularly with them and
20:14
Speaker 3: set up a plan so that you can actually, you know,
20:16
Speaker 3: invest and plan for future you without having the commitment
20:20
Speaker 3: of saying, okay, well, if I've put it back, it's
20:22
Speaker 3: there until I'm sixty five and I have no access
20:24
Speaker 3: or control over it. Maybe you want more control over it,
20:28
Speaker 3: But what I want is you to be educated in
20:29
Speaker 3: those decisions that you can make, as opposed to saying, Okay,
20:33
Speaker 3: well I just I don't know what I'm doing, Because
20:35
Speaker 3: you do. You are smart, you are empowered, like you
20:37
Speaker 3: have all the knowledge, skills and resources that you absolutely
20:41
Speaker 3: need to do this. You just need to make a
20:43
Speaker 3: plan and get it done.
20:45
Speaker 2: Speaking of investing, and our friends at Superhero, as we
20:48
Speaker 2: mentioned earlier in the show, they asked one through today's episode,
20:50
Speaker 2: and in partnership with them, we did actually put together
20:53
Speaker 2: a little beginner's guide to investing.
20:55
Speaker 3: Yeah, it's like kind of like a cheat sheet, right,
20:57
Speaker 3: That's what we ended up calling. It was like the
20:59
Speaker 3: cheat sheet investing.
21:00
Speaker 1: Yep.
21:01
Speaker 3: So that full.
21:01
Speaker 2: Downloadable ebook is available on our website. It's completely free.
21:05
Speaker 2: Head to She's on the Money dot com dot da.
21:07
Speaker 2: You click the freebies tab and it will be under
21:10
Speaker 2: that heading.
21:10
Speaker 3: There, which was actually really fun to put together because
21:13
Speaker 3: it was like a cheat sheet of what do you
21:14
Speaker 3: really need to know if you're going to deep dive
21:16
Speaker 3: into investing, Like what is the thing that you might
21:18
Speaker 3: want to print out have beside you when you're investing
21:21
Speaker 3: on the computer and actually going through that journey. Obviously
21:24
Speaker 3: it's not like super comprehensive, but it's more of the
21:27
Speaker 3: high level. Here's what we think you need to know
21:29
Speaker 3: as a really great start point.
21:31
Speaker 2: All right, So to pivot a little bit here via
21:34
Speaker 2: I thought, given a nature of this chat, it might
21:36
Speaker 2: be worth checking in with you to see how the economy's.
21:39
Speaker 1: Performing at the moment.
21:40
Speaker 3: Oh, you thought that would be a good idea.
21:41
Speaker 1: I know, like, how high level is that?
21:43
Speaker 3: I think it's very high level, And I actually think
21:45
Speaker 3: it's really funny that you now ask me questions like
21:47
Speaker 3: this on a regular basis. In starting it, she's on
21:49
Speaker 3: the money. I feel like you're like, hey, what's the
21:52
Speaker 3: economy mean? And then now it's like, hey, how's it performing?
21:54
Speaker 1: What's up? Like we love that personal grow.
21:57
Speaker 3: It's actually really really fun to see. But if you
22:00
Speaker 3: want an answer to that, I do. I can also
22:02
Speaker 3: provide that please. So in December we saw three point
22:05
Speaker 3: one percent growth, which is actually really impressive. So I
22:09
Speaker 3: think it's important to understand that that is genuinely impressive
22:13
Speaker 3: given we were coming out of COVID, which is really
22:15
Speaker 3: cool because we thought that everything would be really bad.
22:18
Speaker 3: The economy has actually recovered eighty five percent of its
22:21
Speaker 3: COVID induced fall, which was twice as fast as expected.
22:24
Speaker 3: So everyone was expecting that we wouldn't bounce back as
22:27
Speaker 3: quickly as we have. And I think that this is
22:29
Speaker 3: also really reflective in the property market. So do you remember, like,
22:33
Speaker 3: and I know you didn't work with me, you didn't
22:35
Speaker 3: even know me personally at that point, you would have
22:37
Speaker 3: seen it, like the start of COVID, and you know,
22:39
Speaker 3: when job Keeper and Seeker came in, everyone started talking about, Okay, well,
22:43
Speaker 3: you know, the property market's going to be down in
22:44
Speaker 3: the pits when job Keeper and Seeker and everybody's going
22:47
Speaker 3: to be selling their houses. It's going to be desperate. Yeah,
22:50
Speaker 3: everyone will be able to ash that they were cheap. Yeah.
22:52
Speaker 2: Yeah.
22:53
Speaker 3: But they were all saying, you know, that's when you're
22:55
Speaker 3: going to be able to pick up cheap property. You're
22:57
Speaker 3: going to you know, find bargains. Sellers aren't going to
22:59
Speaker 3: be able to get rid of their homes.
23:01
Speaker 1: And the complete opposite.
23:02
Speaker 3: Yeah, And it was all through the media, right like
23:05
Speaker 3: it was the front cover of so many papers and
23:07
Speaker 3: all of these people predicting that the property market would
23:10
Speaker 3: just be the pits and it'd be the worst. And
23:12
Speaker 3: now they're kind of like, oh, by the way, let's
23:14
Speaker 3: pretend we never said that. There's no coverage on the
23:16
Speaker 3: fact that the property market is now booming across Australia.
23:19
Speaker 3: And obviously we're in Melbourne so we see it more.
23:22
Speaker 3: There was an auction across the road from me the
23:24
Speaker 3: other day. Yes, four hundred thousand dollars over the reserve price,
23:29
Speaker 3: like four hundred grand, so much money, a lot of
23:32
Speaker 3: surprise money.
23:33
Speaker 1: Yeah, like, who has an extra thought.
23:35
Speaker 3: That's another house that's not me, that's an entire house
23:38
Speaker 3: that someone's like, oh, actually I'll pay for an entire
23:40
Speaker 3: other house on top of this house that I'm already
23:42
Speaker 3: trying to bid for. And there were about sixty people
23:45
Speaker 3: at this auction. So like, the property market is definitely
23:48
Speaker 3: very hot at the moment, but when it comes to
23:51
Speaker 3: actual starts again instead of Victoria's anecdotal evidence of walking
23:54
Speaker 3: past an auction on the weekend. According to the International
23:57
Speaker 3: Monetary Fund, we're on the path to becoming the world's
24:00
Speaker 3: twelfth largest economy this year, which is up two places
24:03
Speaker 3: from twenty nineteen. Kind of cool, given we've gone through
24:06
Speaker 3: an unprecedented global pandemic, but also Australia's GDP. So we
24:12
Speaker 3: talk about GDP in the finance world and you've probably
24:15
Speaker 3: heard it on the TV a lot of times, and
24:17
Speaker 3: if you don't know what that is, it is Australia's
24:19
Speaker 3: gross domestic product, which sounds complicated, but it essentially just
24:23
Speaker 3: means it's the total value of the goods and services
24:25
Speaker 3: produced and provided in one country over one year. So
24:28
Speaker 3: like how much stuff did we make? Can do? That's
24:30
Speaker 3: GDP essentially, and that's a more simple way of putting it.
24:34
Speaker 3: But we're actually going to come in at around two
24:37
Speaker 3: trillion whoa dollars worth of GDP this year?
24:40
Speaker 1: Trillion billion.
24:42
Speaker 2: One of those numbers that I cannot comprehend, Like my brain,
24:46
Speaker 2: I think that number and it just goes do not compute.
24:48
Speaker 3: I see it written down and it looks like a
24:50
Speaker 3: pretend number. One It is absolutely not a pretend number.
24:53
Speaker 3: But it is a million millions. That's a lot a
24:56
Speaker 3: million millions. It's a very large number.
24:58
Speaker 1: Anyway, scient.
25:01
Speaker 2: Continuing on the strats train and kind of jumping back
25:03
Speaker 2: just a second to the housing, Yes that scal I know,
25:07
Speaker 2: did you know the value of Australia's residential property jumped
25:10
Speaker 2: by roughly two hundred and fifty billion in the last
25:14
Speaker 2: three months of twenty twenty, which means COVID was still
25:18
Speaker 2: a thing. Yes, we were kind of getting a little
25:20
Speaker 2: bit more hopeful, but like it was definitely still around.
25:23
Speaker 2: I'm pretty sure Melbourne was still in lockdown for at
25:26
Speaker 2: least a good portion of that. And two hundred and
25:29
Speaker 2: fifty billion dollars is a lot of dollars.
25:31
Speaker 3: Yeah, And do you know how much a billion dollars is?
25:32
Speaker 3: We're talking about trillions and billions. A billion is one
25:36
Speaker 3: thousand millions.
25:37
Speaker 1: Yeah, that's still a lot of millions. And it's a
25:39
Speaker 1: lot of millions.
25:40
Speaker 3: But like, I don't think people comprehend the volume of
25:43
Speaker 3: what that actually means there. Oh yeah, billion, it's more
25:45
Speaker 3: than a million. It's like, no, that's a thousand millions.
25:48
Speaker 3: Imagine having a thousand million dollars.
25:50
Speaker 1: I'd take just one, one lonely million.
25:53
Speaker 3: Imagine being a legitimate financial advisor and calling a billion
25:56
Speaker 3: one thousand million dollars. Wow, I life really dropped here.
26:00
Speaker 3: But I'm not surprised to hear that at all. Again,
26:04
Speaker 3: as I was saying, like I'm seeing it anecdotally. I'm
26:07
Speaker 3: talking to friends about it. Amylenardi, who is obviously a
26:10
Speaker 3: really good friend of the show and also the co
26:12
Speaker 3: host of the upcoming The Property Playbook podcast, which we're
26:15
Speaker 3: launching very soon, which is fun. She's crazy busy at
26:18
Speaker 3: the moment, and it's so busy. It's also one of
26:20
Speaker 3: the reasons we haven't launched yet, guys, because she is
26:22
Speaker 3: crazy busy, and I want her to be crazy busy
26:24
Speaker 3: because that's good for her business. But also seeing the
26:28
Speaker 3: hunger for people in the market trying to buy at
26:31
Speaker 3: the moment, it makes me feel incredibly grateful to not
26:34
Speaker 3: have been buying a house during a time when there's
26:36
Speaker 3: so much demand. Because I'm just I'm a stressy person.
26:40
Speaker 3: I'm very type A. I don't think i'd do well
26:42
Speaker 3: in an auction. One I don't like losing haha, that
26:45
Speaker 3: would suck. I'd be the girl at the auction crying.
26:48
Speaker 3: But two, I would just feel really overwhelmed by the
26:50
Speaker 3: whole process. I don't like being in big groups of people.
26:53
Speaker 3: I don't like not knowing the outcome. I don't like
26:55
Speaker 3: not having certainty, and I feel like that's just really
26:59
Speaker 3: stressful going through that process right now, my friend, I
27:02
Speaker 3: feel you.
27:02
Speaker 2: Oh my gosh.
27:03
Speaker 1: Yes.
27:04
Speaker 2: So obviously people probably will still be reeling a little
27:07
Speaker 2: bit from the financial repercussions of the pandemic just as
27:10
Speaker 2: a whole.
27:11
Speaker 3: Absolutely, But you also have a start that you were
27:13
Speaker 3: talking about before from the ABS, which is about what
27:17
Speaker 3: was it total household wealth?
27:18
Speaker 2: What was that?
27:19
Speaker 3: Because I actually want that on the pod because it
27:21
Speaker 3: was impressive.
27:22
Speaker 2: Well, according to the ABS or the Australian Bureau of Statistics,
27:26
Speaker 2: total household wealth grew by five one hundred and one
27:30
Speaker 2: billion dollars in the December quarter, which is actually the
27:33
Speaker 2: largest quarterly growth in the last ten years.
27:36
Speaker 3: Which is epic and really really cool. And I know
27:40
Speaker 3: that a lot of people have experienced very very significant
27:43
Speaker 3: financial hardship. People have lost their entire businesses, their wealth,
27:47
Speaker 3: their lives, like this is awful. But if anything has
27:51
Speaker 3: come out of COVID, people are actually saving better because
27:54
Speaker 3: they've kind of been forced into saving and then they've
27:57
Speaker 3: realized that they actually have the capacity to save. And
28:00
Speaker 3: I think that this is a really good reflection of
28:02
Speaker 3: that because our literal household wealth has grown by five
28:06
Speaker 3: hundred whatever it was, five hundred billion dollars and one
28:10
Speaker 3: billion dollars, and that's crazy. If that's not cool, I
28:12
Speaker 3: don't know.
28:13
Speaker 1: What is all.
28:14
Speaker 2: Right, back to the people who are potentially still struggling
28:17
Speaker 2: or suffering a little bit and are having a hard
28:20
Speaker 2: time saving, which is completely understandable. Are there any resources
28:24
Speaker 2: that we can share with them that might be able
28:26
Speaker 2: to help.
28:27
Speaker 3: Absolutely have a chat to a financial counselor, which you
28:29
Speaker 3: can actually do for free. These guys don't sponsor us.
28:32
Speaker 3: I have never even spoken to them because I just
28:35
Speaker 3: know what they do is amazing. I have literally spoken
28:38
Speaker 3: to people in our community that have spoken with these
28:41
Speaker 3: guys multiple times and had great experiences. And that is
28:44
Speaker 3: the National Debt Help Line. So these guys are literally
28:48
Speaker 3: free financial counselors. So if you're in a bit of
28:50
Speaker 3: a pickle, it doesn't matter how big or small, like
28:53
Speaker 3: they are there to one hear you out, like help
28:55
Speaker 3: you through, but also give you some strategies because paying
28:58
Speaker 3: a financial advisor if you're a financial pickle is a
29:00
Speaker 3: really bad idea. And you can call one eight hundred
29:03
Speaker 3: double O seven, double O seven. They're like, I kind
29:05
Speaker 3: of like the double James Bond I reckon because they're
29:08
Speaker 3: that call and they will help you out and I
29:10
Speaker 3: really really respect what they do, but will also put
29:12
Speaker 3: that information into the show notes for you. And if
29:15
Speaker 3: you're struggling to meet things like repayments, like let's just
29:19
Speaker 3: remember that you are so powerful, Like you have a
29:22
Speaker 3: voice and we want you to use it. Like people
29:25
Speaker 3: are not going to think any less of you. They're
29:28
Speaker 3: not going to think of you differently if you put
29:29
Speaker 3: your hand up and say, look, I just need a
29:31
Speaker 3: bit of a hand in a bit of a pickle
29:32
Speaker 3: at the moment. I'm struggling, And I think that so
29:35
Speaker 3: many people who are struggling financially aren't willing to just
29:38
Speaker 3: go gin know what I do need a hand. This
29:40
Speaker 3: is overwhelming. So pick up the phone. If you aren't
29:43
Speaker 3: able to meet repayments for your energy provider, for your rent,
29:47
Speaker 3: for your personal debt, for your mortgage, pick up the
29:50
Speaker 3: phone and talk to those providers. Be really honest with
29:52
Speaker 3: them because they are usually going to be able to
29:55
Speaker 3: bend over backwards to help you through that, because they'd
29:57
Speaker 3: prefer you to be open and honest and upfront about
30:00
Speaker 3: your situation so that they can help. Instead of burying
30:03
Speaker 3: your head in the sand and then going cool, this
30:05
Speaker 3: person hasn't been meeting their repayments at all. We kind
30:07
Speaker 3: of need to repossess whatever asset we've funded with them,
30:10
Speaker 3: So put your hand up, call the bank. They're very
30:13
Speaker 3: likely to help you and put you on a plan
30:14
Speaker 3: that makes it actually possible. And when it comes to
30:17
Speaker 3: other resources like your phone or your energy, lots of
30:20
Speaker 3: companies at the moment have COVID plans in place that
30:23
Speaker 3: are still available to you.
30:24
Speaker 2: And it's not just you if you are feeling that way,
30:27
Speaker 2: there are literally hundreds of thousands of people in the
30:30
Speaker 2: same boat. So we just want to say, like, please,
30:32
Speaker 2: do not feel bad. Please do not feel like you're
30:35
Speaker 2: not good enough or you're lesser than if you because
30:37
Speaker 2: you're not at all. If you can't put that money
30:39
Speaker 2: back into super yet, as we said earlier, you're doing
30:42
Speaker 2: your best, and that's we just want to provide you
30:44
Speaker 2: that information so that when you are able to take
30:47
Speaker 2: that next step, you can. But if all you can
30:49
Speaker 2: do right now is survive and pay the bare minimum
30:52
Speaker 2: just to put food on the table for your.
30:53
Speaker 3: Family, like, we're proud of you for doing it, one
30:55
Speaker 3: hundred percent, And I think it is so important, especially
30:58
Speaker 3: from a money podcast, to let you know that you're
31:00
Speaker 3: current financial situation does not define you as a person
31:03
Speaker 3: at all. It does not define who you are, what
31:06
Speaker 3: you're capable of, or how smart you are, or you
31:08
Speaker 3: know any of those things. It is literally just what
31:12
Speaker 3: you're experiencing right now. And people are not their experiences,
31:15
Speaker 3: they are the tenacity that they take to them. And
31:17
Speaker 3: you can be so tenacious and so strong, and that
31:20
Speaker 3: is literally what we are here for. I don't care
31:23
Speaker 3: what you're going through, it is how you're handling that situation. Okay,
31:26
Speaker 3: enough of that sappy stuff, Jessica. I know that I
31:29
Speaker 3: love my community and I'm genuinely so proud of you all,
31:31
Speaker 3: whether you are going through that positively or you're having
31:34
Speaker 3: a bit of a hard time like we are here
31:36
Speaker 3: for that. We are in our dms talking to you
31:38
Speaker 3: guys literally every single day about it. But that is
31:41
Speaker 3: all we have time for today. But before jess does
31:43
Speaker 3: the rap which I'm so excited to here, we would
31:46
Speaker 3: like to acknowledge and pay respect to Australia's Aboriginal and
31:49
Speaker 3: torrest Right islander people's. They're the traditional custodians of the lands,
31:53
Speaker 3: the waterways and the skies all across Australia. We thank
31:57
Speaker 3: you for sharing and for caring for the land which
31:59
Speaker 3: we are able to learn on. We pay our respects
32:01
Speaker 3: to elders past and present, and we share our friendship
32:04
Speaker 3: and our kindness.
32:05
Speaker 2: Now, the advice shared on She's on the Money is
32:07
Speaker 2: general in nature and does not consider your individual circumstances,
32:11
Speaker 2: not at all. She's on the Money exists purely for
32:13
Speaker 2: educational purposes and should not be relied upon to make
32:16
Speaker 2: an investment or a financial decision. And we promise Victoria
32:20
Speaker 2: Devine is an authorized representative of Australian Pacific Funds Management
32:24
Speaker 2: Proprietary Limited ABN three four one three two four six
32:28
Speaker 2: three two five seven AFSL double three nine to one
32:31
Speaker 2: five one. And of course thank you to our dream
32:35
Speaker 2: team of audio engineers and producers for putting it all together.
32:38
Speaker 3: Now, it wouldn't be if She's on the Money podcast
32:39
Speaker 3: if we didn't shreamelessly plug ourselves. So if you want
32:42
Speaker 3: to join our Facebook group, we're over one hundred and
32:44
Speaker 3: fifty thousand people share money tips and tricks every single
32:47
Speaker 3: day free of judgment. So She's on the Money on
32:49
Speaker 3: Facebook and join us. And if Facebook's at you think
32:52
Speaker 3: that is okay. We're also on Instagram, We're on TikTok.
32:54
Speaker 3: We are pretty much on every social media platform. So
32:57
Speaker 3: find us, follow us, and habit chat. See you next week.
33:00
Speaker 2: I sigh
33:11
Speaker 3: H