Real lost super: could 93% of your superannuation disappear?

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When we hear ‘lost super’, we imagine lots of funds that we don’t know about. This story is about another kind of lost super. It’s the money you had in your super account, but it’s disappeared.
 
So, could 93% of your superannuation disappear?
 
Very short answer: yes.
 
Longer answer: if you stop contributing, and you’re paying fees and premiums, it can happen. Do that for over a decade, and you could have next-to-nothing left.
 
My statements come from a real-life example, not a hypothetical one.

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Extra superannuation contributions |%%sitename%%

Are Extra Superannuation Contributions the Best Decision?

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I recently had an interesting (and somewhat frustrating) discussion with a financial planner about making extra superannuation contributions. In general, she thought it was a good idea. In general, I was against it. We both agreed that specific situations warranted different approaches, but in my specific case – a mid 30’s woman – she thought extra contributions were wise. I disagreed.

I believe most financial advisors would recommend extra superannuation contributions to minimise tax and boost retirement income. So, what else should you be aware of when making this decision?

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Wading into the ethical banking quagmire

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Ethical banking started in response to educated consumers wanting assurance that their money is not being used to cause damage. Like recycling, taking shorter showers and buying your food from the local farmers market, it’s another way you can personally contribute to a sustainable future.

Inevitably, the devil is in the detail:

  • Who decides what’s ethical?
  • How do we ensure those with the ‘ethical’ badge are really doing the right thing?
  • What’s the cost to the consumer?
  • And the bottom line: which institutions could you bank with if you want to bank ethically?

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Money Matters – Fran’s Perspective

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By Fran White

There’s Death and Taxes and then there’s Money – another certainty of life is that money will have an impact on it.

We Baby Boomers will have to manage money for more years than any prior generation as we outlive old life expectancies, and this includes a lot of years still to come (hopefully!)

As a fairly typical Baby Boomer, the blueprint I had was a hard-working dad whose aim was to pay off the family home and live out his retirement, with mum, comfortably on his company pension. My dad succeeded, he worked for a company with a great pension scheme, retired early and lived comfortably to his standards for more than 25 years till he departed this world. Read more

Book Review: Money Master the Game by Tony Robbins

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When asked what books about finance I recommend, my response ten years ago was:

They’re still my go-to books for self-education on finance and I haven’t seen anyone do better on those topics yet. Reading those books has been pivotal in my investing life.

In recent years I’ve added to my list:

Then, in late 2014, Tony Robbins released ‘Money: Master the Game’. I immediately preordered the book, wondering if it would become another financial ‘Bible’. Read more

Money Mindset: Ask the right question

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By Lacey Filipich BEng(Hons) MAICD Cert Gov (NFP)

When talking to people about their financial goals, a common question they seem to ask themselves (and me, and I assume their financial planner) is:

How much money do I need to retire?

It’s an interesting question, but it’s not the right question. Read more

Five steps to getting the most from your tax return

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By Lacey Filipich BEng(Hons) MAICD Cert Gov (NFP)

Next year I’ll be clocking up my 20th as a submitter of tax returns. That’s twice as long as my relationship with the father of my children – a looooong time in my book.

Over nearly two decades, I’ve seen the methods of submission change: when I first started, you had to lodge via a form that you posted to the Australian Tax Office (ATO). FY15 will be my seventh online submission via eTax, which has evolved and improved significantly since my first experience with it in FY08. I’ve also seen the rules change over time: health care levies have been introduced, medical claim limits have dwindled away and superannuation limits and levies have changed considerably to name but a few.

You can take this lesson from my experiences: tax is not static.

Every year there are new advances in how we submit, and changes (sometimes subtle, sometimes not-so-subtle) in what we can and should claim. It doesn’t do to be complacent about your tax return because you could be missing key opportunities to maximize how much you get back… or minimize how much you pay, whichever way you prefer to look at it. It’s also not mandatory to get an accountant to do it for you. Most people can handle their own tax returns if they want to, especially with the increased efficiency of the online system these days.

Through all this, one thing remains certain: you’ll be submitting a tax return. Why not make the most of the experience? Read more

Credit cards: friend or foe?

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By Lacey Filipich BEng(Hons) MAICD Cert Gov (NFP)

Ah, those little pieces of plastic. I dimly remember a time in my childhood when there was a paper system for credit cards that involved taking an imprint with what looked and sounded like a machine designed to take off the fingers of unsuspecting shop assistants. Now you just wave them nonchalantly and walk out the door. In fact, you don’t even have to bother taking them out of your wallet – you can just use the virtual wallet on your phone if you so choose.

So easy. So tempting. So dangerous.

Now don’t get me wrong. The credit card is not, in itself, dangerous. It won’t leap out of your wallet and bite you. It cannot bankrupt you without your instruction.

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The Road to Struggle Street

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By Lacey Filipich BEng(Hons) MAICD

Like nearly one million other Australians, I sat transfixed in front of the television on Wednesday 6 May watching the first episode of the three-part SBS documentary ‘Struggle Street’. Leaving aside claims that it was not a fair representation of life in Mt Druitt and was simply headline-grabbing ‘poverty porn’, it was a glimpse into the lives of some people doing it tough. Very tough.

Despite all the press to the contrary, this documentary can do good. It is very tangible reminder of the one in seven Australians living below the poverty line. Looking at the ACOSS report, they’re easy to write off as numbers. After watching this documentary, they have faces and stories. Are there really millions of Australians so consumed with the daily battle of survival? I wish it weren’t so, but perhaps it is.

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The Potential Perils of Paid Financial Advice

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By Lacey Filipich BEng(Hons) MAICD

In my professional past, I spent a lot of time flying into mining sites for a substantial fee to tell management teams two things:

  • Your only targets should be Safety, Volume and Cost. The rest is window dressing.
  • Stop doing most of what you’re doing. Just do a few things, do them properly, and be relentless in your de-prioritisation of the distracting crap.

The KPI targets and the contents of the not-to-do lists vary, but the concept is essentially the same everywhere. We have too many targets and too much to do, so we lose sight of the important stuff. It’s part of the human condition.

In my advice to their bosses, I add a third point: the management team bonuses should be delayed by two years. Why? Because they should not reap the rewards of meeting their targets until it can be shown that those results are sustainable and they did not cause long term damage by making poor decisions. Paying them in the same quarter or year as they achieve the targets means they have an incentive to rape and pillage with little thought to the future. It may not be the most significant incentive and it raises uncomfortable issues of trust and integrity, but it’s there.

So what the hell has that got to do with the Senate inquiry into the poor financial advice some of our biggest banks have been giving their clients? Read more

Australia’s financial future and what it means for you

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By Lacey Filipich BEng(Hons) MAICD

The 2015 Intergenerational Report (‘The Report’) was published on 5 March 2015. It’s a predictive exercise: based on today, where will we (Australia) be in 40 years? Assumptions abound and of course you can spend a lot of time on whether those assumptions are reasonable or not, but it’s far more interesting to consider the implications for those of us who still plan to be around in 2055. So what did The Report find?

Findings of interest for those interested in money

The following figures are based on Commonwealth of Australia data, taken from the 2015 Intergenerational Report.

1. We will live longer, healthier lives

A child born in 2015 can expect to live to their early 90’s whereas a child born 40 years later may expect to live to their mid 90’s. Read more

Working out your financial goals

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By Lacey Filipich, BEng(Hons), MAICD

Setting financial goals can be exciting for some, nauseating for others and downright offensive for a few amongst us. As with most things in life, setting goals is an important first step in getting what you want. The goal is only the first step – you then have to go out and make that goal a reality through work – but without the goal you’re at risk of waking up one day and finding you’re not happy with your circumstances. Regardless of how you feel about money it’s worth having a goal in mind… even if that goal is to never think about money.

How you manage your money is heavily values-based. If you prefer to avoid risk and you value your independence, you’ll have a completely different approach from a person who’s happy to take a lot of risk with someone else’s money if the potential rewards are great enough. There are no hard and fast rules… actually I lie. There’s one rule: don’t spend more than you earn. Everything else is negotiable. So, where to start?

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Going Bankrupt | %%sitename%%

What’s it like to go bankrupt? Three personal stories

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Author’s note: This article on what it’s like to going bankrupt is one of our most widely read and shared. Probably because most commentary on bankruptcy is about the maths rather than the aspect this article covers – the emotional impact. At over 2,500 words it’s a detailed blog, so, here’s a quick introductory video explaining what you’ll read about so you can decide if it’s for you or not: Read more

Love and Money: Four tips to reduce financial conflict at home

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By Lacey Filipich, BEng(Hons), MAICD

My parents fought about money. It’s the main reason they divorced. I can’t conceive of them sharing a household budget so in retrospect it’s not surprising. To put it bluntly: Dad spends, Mum saves. You’d think they’d balance each other out but it doesn’t work that way apparently. The issue was not the actions of saving or spending themselves but what they saved for and what they spent on.

My father has expensive taste: be it a pair of jeans, a bottle of champagne or a car, he only wants the best. He arrived on my doorstep one Christmas, effectively homeless, in his (reasonably new) Mercedes ML350. My mother, on the other hand, is an accountant. She budgets, she plans, she minimises tax. She would prefer to have a $2,000 car and a healthy investment portfolio than a $100,000 car and no investments. Of course, she’d have the expensive car AND the investments, but if forced to choose she’ll pick the ‘smart’ option every time (that’s the investments, in case you hadn’t worked that out…)

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Poverty in Australia? You betcha.

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By Lacey Filipich, BEng(Hons), MAICD

‘He had heard people speak contemptuously of money:
he wondered if they had ever tried to do without it.’
 – W. Somerset Maugham (1874 – 1965)

In 2005, I watched an Australian film called Three Dollars and was traumatised by it. It’s not a horror film – I just found it confronting, depressing and very plausible. The main character, Eddie, is a successful chemical engineer living in a beautiful home in Melbourne with his lovely wife and daughter… until Eddie gets the chop from his job. In a matter of weeks his life unravels, as he cannot find a job but cannot bring himself to tell the family. He can’t afford his car or the mortgage. Eventually even affording food becomes a challenge. I think I found it so traumatic because it brings into focus that we tend to live life blissfully unaware of how close we probably are to financial ruin should something terrible – like a debilitating illness or job loss – happen. Read more

To ‘B’ or not to ‘B’: Budgeting

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The people who do not cringe at the phrase ‘let’s do a budget’ are few and far between, and more often than not they hold accounting degrees.

That particular ‘b’ word (budgeting) has the power to strike fear into the hearts of men and women alike for a number of reasons:

  • It’s overwhelming – who has the time to build a spreadsheet with ALL their costs in it? And how on earth can we know what everything will cost in the future?
  • It’s boring – nothing is more likely to send you into a catatonic state than sifting through credit card statements and that pile of crumpled-up receipts hiding in the bottom drawer. And try watching the announcements about the Federal budget – positively snore-worthy.
  • It can be depressing – realising you spend $760 a year on take-away coffee is not likely to make you feel good.

All these pale in comparison to the One Unassailable Fear associated with budgeting:

If you set a budget,
you just might have to stick to it.

That’s why it’s called a budget – you set it then you don’t budge (I know. I’m hilarious).

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