Super – can a fragile misfit expedite the process?
I feel cagey.
Superannuation has been an odd venture for me.
I’ve charted several courses, without satisfaction.
Now I’m taking a violently different tack.
Will time and tide vanquish or vindicate?
Rolled gold
My first corporate employer had a ‘defined benefit’ fund.
From the instant I joined, I was worth $160K dead or retired. This grew around $10K a year – intoxicating stuff for a recent graduate.
When I decided to ditch my HR career, I was nearing $250K (a pretty penny in the 80s).
My boss begged me not to kill this goose by yanking my deposits, but I did.
How else was I going to fund my hand-drawn T-shirt and speculative fiction future?
Nothing like it
My $22K payout kept me warm for a year. Then I was zeroed by all accounts.
I had to get a ‘real’ job, fast.
Back in Corporate Land (this time with an ad agency) I joined a much-less-generous ‘accumulation’ fund.
My egg grew slowly as the years flew.
Flowing with the go
When I left to run The Feisty Empire, I was back up to $20K.
I put this in an industry-leading super scheme, which went on to triple my stake.
Alas, I’ve lately found this fund fond of female ornaments AND mines.
And I’m just not into those any more.
Greener pastures
So I’m tipping my fortune into a whack-job greenie offering.
We’re talking small, unproven, eco-friendly firms who must run an ethical gauntlet that’d make Bob Geldorf wince.
The risk is high, the volatility higher. It could all end in tears.
My financial advisor is bemused by my desire to ‘sleep straight in bed’.
He firmly believes Earth will still be habitable when I retire.
Yet, as the Gulf of Mexico burns, I’m happy with my choice.
How about you?
Super duper?
I believe super is very different for self-employed people (vs full-time staff).
I’m keen to hear your journeys, stories and decisions on this oft-neglected matter.
Or, given the state of world affairs, do you agree this issue may be academic?
Contributions taxed at 15%.
Paul Hassing, Founder & Senior Writer, The Feisty Empire
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and withdrawals taxed at 30% – property is looking more and more relevant and realistic, even with CGT.
The onus of compliance of self-managed funds is another issue that is time-consuming. I don’t like funds – never had, not after the big changes in the early 90’s, when super became compulsory, anyone that had super as an option, suddenly found the rules had changed and money was untouchable, even if you HAD contributed 90% of the funds.
The Government will continue to change the rules as they see fit, because you are not allowed to touch that money until you are 65 (and climbing) they really don;t care too much, as long as you don’t draw the pension
Great to see you again, Heather. Your new banner pic looks beautiful. How are book sales going, BTW?
Super sure is a messy affair. Everyone I speak to tells me to pay my home loan down rather than top up my super – even with the tax benefits of doing the latter.
As for a self-managed fund, I’d be too dumb and terrified to make a move. I can’t even do my BAS without weeping!
I think I’d rather work than draw the pension. And part-time work seems a good way to enjoy a healthy retirement anyway.
Thank you, as always, for adding value to our space.
Book sales are going as well as can be expected – considering financial constraints (look at the topic!)
As for paying down the home loan – I am in 100% agreeance with everyone.
self-managed funds are too messy and time-consuming and many that are working full-time don’t have the time to actually comply – so it’s easier to rely on the commercial funds – like you are doing – but you are at the whim of their fees and charges and profit and loss, with little control.
Like you I see working part-time as an option – not just a monetary option – but also as a way to stay young and thinking and not get moldy sitting in the corner in Gods Waiting Room.
You have raised some relevant points in regards to investment styles and choices. I tend to be more conservative and thus property and cash tends to be my funds choice of investment. it saves the dilemma of wondering if they are investing in companies involved in child labour or environmental damage
Keep up the thought provoking posts
Thank you, Heather; will do!
Folks, if you’d like to help a strife-torn community while scoring the perfect pressie for a foodie, check out Heather’s link. Causes don’t come much gooderer.
THIS would be a firm I’d like to invest in:
http://www.theage.com.au/news/business/money/investment/profile–monique-conheady/2010/05/11/1273343328374.html?page=fullpage#contentSwap1
Super is great for people who don’t talk about money and think there is magic and genius behind investing in things that give a return. For those of us willing to back ourselves, property and business is a far more reliable wealth creation strategy than trusting your money to what the SMH recently termed the “fee collectors from Mosman”.
In a nutshell if you cant handle the heat, invest in super.
Thanks, Brendan. It’s great to be getting your take on these matters more often. Please keep it coming!
G’day mate,
Super topic?
‘Annuation’ would do me mate…you know things like policies, practices, ethics and laws lasting longer than a year?…that kinda thing…I think Heather covers that aspect of it exceedingly well.
Oh and I checked out your website too Heather…what a mighty fine idea
As you may have gathered by now, I don’t have a lot of faith in ‘the system’ (to coin ‘THE PHRASE’
).
I think James Cameron adequately addressed that point in his recent testament to the irony of Twentieth Century Economics (Avatar), when the ‘Tsahik’ (The lady who was one of ‘Na Vi’ Clan Leader), said “Learn well Jake Sully, and we’ll see if your insanity can be cured”. Well we sure saw how that turned out ey? The cure didn’t look exactly like real-estate investing did it…or did it?
We’ve covered a lot of topics in our immensely enjoyable and heady days since Paul graced these pages and encouraged a bevvy of fine contributors to vent both their wares and their spleens…and unless I’m mistaken we have coloured quite a few of those hallowed pages with discussions about good ol’ ‘Values’.
I think the ‘circle of life’ may just about be completed here mate. How we value or don’t value a human life…how we value or don’t value the contributions of a human during their life.
As far as I’m concerned while ever there is one homeless human, or one human without enough to eat, or one human that dies alone and without, then someone else is living at their expense. It doesn’t require complex mathematics to figure that out…but to make it not happen requires ‘actual’ care, ‘actual’ sharing and ‘actual’ honoring of agreements. Not being seen to be caring, and not throwing billions of dollars into legal-commercial labyrinths, or constant and never-ending justifications.
I suppose there are quite a few folks out there by now who just love the counter-point of having bleeding-heart me chiming in here and being naive and idealist. Perhaps they believe that I don’t like money? Not true…I like money…I just don’t like how we make it.
And I don’t like how we convince ourselves that we’re all doing the right thing and the best we can…has anyone watched the news lately.
So who’s insane? The people in the news, the people making the news, or the people ignoring it?
And I’m sorry Heather but I couldn’t help but say something about this – “…thus property and cash tends to be my funds choice of investment. it saves the dilemma of wondering if they are investing in companies involved in child labour or environmental damage.”
I’m glad that investing in property and cash, saves you worrying about child labour and environmental damage. I hope one day your good self and others will take a plane trip and look out the window when you’re flying over Sydney. And perhaps whilst looking out that window you might wonder where the stuff that we use to build our houses and put in them and run them comes from…ethical investment?
It never ceases to amaze me that we are the only creature on earth that actually breeds themselves into homelessness. Oh! Now I get it! It’s called superannuation.
And now where drowning in it…
Cheers
Stephen G
Dear Stephen, thank you for weighing in. You tipped the scales at 24 carats.
I love how your argot fades as your passion fires. It’s like a Cred Meter right in your forehead.
Bach had a thing for counterpoint and it didn’t do him any harm. So I’m VERY happy for you to puntal your contra by us.
Many thanks indeed.
Interesting dilemma you have. Love the expression “sleeping straight in your bed” too!
There is a local (Traverse City, Michigan) investment firm whose policy is to invest only in green / environmentally correct companies. The owner of the firm has done quite well for himself and his clients over the past twenty years or so. I know the owner, Paul Sutherland, personally and can vouch for his “walking what he talks” and all that. He’s also spent considerable time with the Dali Lama.
The name of the company is FIMG (Finanacial Investment Management Group) and I believe their website is http://www.fimg.net [Just corrected it. PH.]
No big shakeout. Don’t know if this type of information is what you were after, but coming from the state side I thought I’d share it with you!
Keep us apprised of your direction.
Cheryl
http://www.known.org
Thank you, Cheryl! We value all suggestions, especially from bright sparks like yourself. I’ll have a look at that site for sure.
You reminded me of a good point, too. ‘Green’ and ‘lucrative’ don’t have to be mutually exclusive.
Indeed, when my advisor checked over my preferred choice, he made noises to suggest it had actually done better than some of the ‘good old big boys’.
I will certainly keep you posted.
That link is actually http://www.fimg.net/
And since we’re naming names, here’s my ka-raaaazy tree-hugging crowd:
http://www.australianethical.com.au/strategy/equities-strategy
I do hope they don’t mind being called that. At least it shows I’m not on commission!
Just emailed Australian Ethical Investment (keeping it real in the house).
Dear Team,
I just mentioned you in today’s Small Business Owner blog post.
It would add great depth to our discussion if you were to leave a comment and link to your site.
As this blog is promoted to 3000+ SMEs, you may also gain some new fans (of which I am one).
The post is at:
http://mybrc.myobnet.com/2010/05/13/super-%e2%80%93-can-a-fragile-misfit-expedite-the-process/
Hope to see you there!
Best regards,
Paul.
BTW, Cheryl, do you reckon you could get Paul to tap a few words for us? Just a line or two to cover his take on the topic.
I am just a dumb cartoon writer (I am dumb; my cartoons not so much) but what I can’t fathom with super is that it’s a compulsory government savings scheme … which is then gambled by super funds on the stock market. I find the logical contradiction astonishing. Perhaps it’s just me.
On another note, that’s one of the all-time cleverest headlines.
Hi Ad! Your cartoons are most undumb, as any visitor to your fine site will see.
You sure raise a fantastic point about the duality (nonentity?) of our super ’scheme’ (another unfortunate word choice?). I’ve watched the whole thing get more volatile year by year until … well it just doesn’t seem a good place to park your loot any more.
Another level of chaos is the new level of choice. While 95% of people don’t think of their super until it’s time to retire, the other 5% can now shift the lot into the fund that did best last year (but was a dog for the previous five). There sure seems a disconnect between the macro and the micro.
I’m very glad you liked the headline. I think it could be my finest work. Thanks a lot for your thoughts and support!
Paul,
Thanks for coming on board our super fund and spruiking us in your blog.
Ethical investment has a reputation among some as being solely the domain of greenies. While we certainly appeal to this group, it overlooks that ethical investment makes good financial sense. We think that companies who are most effective at managing their environmental, social and governance issues are those who are most likely to do better financially. This is reflected in our returns. For over twenty years our ethical investment options have managed to match (and sometimes surpass) conventional investment options.
We also believe that we invest in the industries of the future. As we move to a low carbon future it is those companies involved in renewable energy, smart grids, recycling, public transport etc that are going to help lead us there.
As we all know, money plays a huge role in determining what sort of world we live in. With superannuation being most people’s biggest asset, it is also one of the biggest ways we can make a positive difference on a range of environmental, social and ethical issues. And you can generate a competitive return at the same time.
Many thanks,
Adam from Australian Ethical
Dear Adam from AE, thank you very much for your comprehensive reply. I reckon your swift participation in this discussion is another measure of how switched on you guys are.
You raise several great points that entirely escaped my attention and I’m very pleased to have your views.
Best regards indeed! P.