Innholdsfortegnelse for August 2018 i Money Magazine

Depending on when you get a chance to read this month’s cover story, I suspect the royal commission inquiry into superannuation may have already kicked off. The hearings are set for August 6 and while no details of who is listed to appear were available at the time of going to the printers it was believed that fund executives and directors (among many other players) were to be grilled on their expenses and how those expenditures benefited members. Why should we care about how much a chief executive spends on cab fares or how much a super fund spends on brand development to win new members? Well, superannuation is a $2.6 trillion honey pot and annual fees have surpassed $30 billion a year. Essentially there are two sets of fees.…

SUSAN HELY Susan has been a senior writer at Money for more than 10 years. Susan says: “I wanted to teach my 15-year-old daughter about shares. We went halves in $500 worth of shares in a mineral sands company. She was excited when the price went up. But it started to go down and didn’t stop. She lost her money but did learn how shares can go down as well as up.” PETER DOCKRILL Peter is a science and technology journalist and a senior writer at ScienceAlert. Peter says: “I used to save by putting money aside at the end of each pay period. Big mistake. If you proactively deposit your savings on payday instead, your spending habits adapt to the tighter cash flow, and it makes a huge difference.” GRAHAM…

Now that Virgin Mobile’s parent company, Optus, has called time on its subsidiary, what does this mean if you’re a Virgin Mobile customer? First of all, don’t panic. You can stay on your existing plan, though as the shutdown takes place you may start noticing communications and support coming from Optus rather than Virgin Mobile. But you do have a choice to make: either move over to Optus or find a new telco. While Optus might be the easy choice (since you don’t need to do anything for the time being), the forced change is perhaps the perfect stimulus for you to take stock of your phone plan needs and check the market for what’s available. Changing telcos (and keeping your number) is actually an easy process, so review your…

If a stock doubles in price in any period it’s known as a “two-bagger” and if it trebles it’s a “three-bagger”. The authors have selected a total of 140 global baggers over the past 10 years including 20 from Australia and New Zealand. They provide some key financial information as well as any bullish or bearish signals identified. The book is described as an aid in a process to help investors “set up and maintain a portfolio of stocks comprising those designed to seize opportunities, those more of a defensive nature and others that just keep ploughing ahead despite the ups and downs of the markets.” Five readers can win a copy. In 25 words or less, tell us your top tip for finding the next big “bagger” investment. Enter…

Telstra is Australia’s biggest telco provider with arguably the best mobile network. However, Telstra customers often pay a premium for the privilege. But there are a number of smaller telcos that resell services on the Telstra network, often at considerably lower prices. Unlike Telstra, Optus and Vodafone, these mobile virtual network operators (MVNOs) don’t have the overheads involved with maintaining big networks, so they can charge lower rates. There is a good range of Telstrapowered MVNOs available so if you already have a handset and just need a good plan competition is strong. And while they don’t access the fastest 4GX portion of Telstra’s network, this doesn’t make much difference for day-to-day use. The table highlights some great value options you can get on the Telstra network right now. 5GB…

Many thousands of Australian women seeking to give their careers a boost are attracted to Emma Isaacs’s can-do style. From office juniors to university graduates, mid-tier executives and company owners, networking events are an increasingly popular solution to provide job and business aspirations with a bit of zip. This style of girl power shines a beacon to those who want to succeed in what is still a male-dominated world. A lack of meaningful careers for women in business and public service persists, despite positive government discrimination and the imposition of gender quotas on big company boards. More is needed to shatter the glass ceiling. A recent KPMG report on workplace discrimination found women earn on average $26,000 less each year than men and their superannuation payout is 50% lower. Halving the gap would…

Almost all Australians have had the legal right to choose their superannuation fund since 2005, when the relevant law was passed. The only people who can’t choose are: • Those employed under the terms of an enterprise agreement that specifies which super fund their money will be paid into. • Federal or state public sector employees excluded from choice by law or regulations. • Those in a particular type of defined benefit fund, or those who have already reached a maximum benefit in that defined benefit scheme.…

Madeleine, 20 Super balance: $5000 Salary: $40,000 Insurance: default cover of $200,000 If Madeleine picks the best fund for her age group, which SuperRatings rates as Hostplus, she will have a balance of $62,704 by the time she turns 30. However, if she is in the worst fund she will have only $43,191, or be almost $19,513 worse off. SuperRatings analysed the top five providers for a 20-year-old, taking into account investment earnings, fees, tax, percentage-based administration fees, as well as default insurance costs for a cover of $200,000.…

• Set a financial goal to reach by retirement. • Estimate your retirement income. • Calculate how much you actually need to save. • Salary sacrifice to take advantage of the tax benefits. • Draw up a savings budget. • Examine your insurance costs and work out whether you should switch to a top super fund with lower-cost insurance with similar benefits. • Consider boosting your partner’s super fund if they have a low balance. • Seek advice from your superannuation fund or an independent planner.…

If you could save more than $37,000 over the life of your mortgage by opting for a non-packaged version, why then are over half of all new mortgages written by the major banks supersized to packages? Is it the discounted loan or the lender’s strategy of locking us in with lots of “goodies” that drives the popularity of these products? A package home loan combines your mortgage with a number of additional products. Generally these include a fee-free credit card, fee-free transaction account, bonus rates on term deposits and/or insurance products at discounted prices. All these perks come at a single cost of around $400 a year. The whole marketing spiel behind packages is that you want more than just a home loan. You’re after the complete banking experience and for…

‘You need to see a planner” is one of the mantras of the financial services industry. We are led to believe that planners can help us reach our financial goals and make us money. Some 2.3 million Australians visited a financial planner in 2016. They sought advice about retirement (about 35%), loans and investments (25%), a self-managed super fund (20%), tax (10%) and estate planning (10%). But rather than building wealth, too many Australians have had their wealth gouged by poor financial planner practices. The Hayne royal commission into misconduct in financial services uncovered jaw-dropping evidence that going to a financial planner hasn’t helped people; instead it has been to the detriment of hundreds of thousands of Australians. It revealed that people were overcharged, received poor advice, paid for advice…

If you want simple, single-issue advice, particularly about retirement savings or insurance, your super fund may be able to help. Many funds provide free financial advice that can be delivered over the phone or online, covering such things as the level of insurance cover or the best way to make personal contributions. The cost for this is absorbed into the fund’s general administration expenses. Often super funds employ financial planners who do not receive a commission. They offer face-to-face comprehensive financial advice, such as helping you set up financial goals and organise saving, investing and insurance. They typically charge from $1200 to $3000, which is built into your superannuation. Funds also run seminars for members on certain issues.…

• Unreasonable delays in a payment. • Miscalculation of a benefit, payment or commutation. • Refusal to approve a claim for a disability benefit. • A belief that a death benefit was paid or may be paid to the wrong person. • Misrepresentation about the terms and conditions of a life or annuity policy. • Errors in annual statements. • Errors in information provided to the ATO for the purposes of the super surcharge, member contribution statements or increased contribution tax on high income earners. • A fund’s conduct in administering the splitting of a superannuation payment between spouses in accordance with a binding agreement or Family Court order.…

It takes a fair bit to make me really cranky but our credit card lenders have managed to do exactly that. For many years I have been trying to get to the bottom of the true cost of credit cards and the impact on their victims. In particular I have been pushing the point that balance transfer cards are a debt trap. The debt trap was my major theme at a mid-2015 senate hearing but I just could not get the numbers to back up my case. The argument is easy to make. While we all need a profitable and secure financial system, meaning we want lenders to make money, there are fair ways and means to do so. Credit card balance transfers are not fair for the unwary or those…

What’s really exciting about artificial intelligence (AI) in banks is not cutting costs – it’s the fact that banks will finally be able to provide us with the service we have always wanted! For example, just take a mortgage application.AI will allow banks to prefill those annoying forms, provide an immediate answer to your queries, give you a real-time response on your application and accept your digital signature, and will never miss a settlement date. So, literally, you could turn up to a house inspection, apply for a mortgage by talking to (yes, talking to) your bank’s AI via your mobile phone and bid for the property 20 minutes later. In other words, AI will allow banks to properly use, for our benefit, the information they store on us. For those…

Money and mates aren’t always a good mix. From rounds at the pub to sharing a taxi, 68% of Australians have lent money to a friend and never been repaid. Those small IOUs add up to $6.2 billion nationally, according to research by Beem It, a joint venture between the Commonwealth Bank, NAB and Westpac. It can be awkward chasing down mates for money but the Beem It app offers a solution. It doesn’t rely on BSB and account numbers. Instead, you just need your Australian Mastercard or Visa debit card, a mobile phone number and a user handle. Then, you send friends a payment request, at which point they (hopefully) swipe and pay, potentially making it easy for everyone to square up. As a sweetener all new users will…

Australian growth fund managers continue to benefit from a run of outperformance that has persisted over the past decade, despite the possibility of a comeback by value investors in 2017. Over the 12 months to June, growth managers extended their lead, with an average return of 15.8% versus 10.2% for value fund managers. Value investors look for well-run businesses with solid fundamentals that may be undervalued due to industry headwinds or temporary negative events; growth investors look for businesses with high growth potential or earnings momentum. The behaviour of value and growth shares over different periods, and the tendency for one or the other to outperform, underlines the importance of diversification, not just across markets and sectors but also across investment styles. Despite the relatively lacklustre performance of Australian shares in…

Fleetwood has just announced the sale of its loss-making caravan business, instantly restoring profitability for the group by closing a segment losing more than $10 million a year. ASX-listed Apollo Leisure will acquire the Windsor and Coromal brands as well as inventory for the grand sum of $1 million and, in return, Fleetwood turns from a business making about $7 million a year in net profit to one making about $20 million a year. Apart from caravans Fleetwood operates two core businesses: it leases out accommodation at its mining villages in Western Australia and it manufactures accommodation for the education and retirement sector. The mining bust had left Fleetwood with the loss-making caravan business. Aggregate profits crumbled to almost nothing and by 2016 it was recording EBIT losses. Last year,…

NAME: Prue Armstrong STATUS: Married with two daughters but recently lost her husband to brain cancer. QUESTIONS: Where do I refresh my skills about saving, budgeting and investing so I don’t make financial mistakes? How do I become a strong role model for my daughters to help them with their finances? How will part-time work affect the part pension that I receive from my husband’s super fund? ANSWERS: Focus on getting on top of your mortgage. Ask your husband’s super fund about how your work will impact on his pension payments. Don’t commute your defined benefit fund – it is too valuable. Follow a simple financial management plan that is sustainable over time. There is a piece of advice that Prue Armstrong wished someone had given her when her husband, Peter,…

Paul’s verdict: Such a solid asset base should give you $60,000pa A part-time job would allow super to build, creating a useful buffer I am 56 and my wife is 48. We have a son, 18, and daughter, 22. I work in the mining industry earning $125,000. I have $660,000 in super and my wife has $70,000; we own our home valued at $500,000 and have no debts. We have $240,000 in an online savings account and $275,000 in an MLC wrap account in balanced funds; these assets are in my wife’s name as she is not in the paid workforce. We also have $70,000 in shares. I plan to retire or find part-time employment at the end of this year. Our daughter has severe autism and needs 24-hour support;…

ASSUMPTIONS Public offer funds only. Analysis is over 10 years to June 30, 2017 for ages 20, 30, 40 & 50 and over 5 years for age 60, as 65 is retirement age.Net benefit reflects the actual dollar outcome received by a member based on investment earnings, fees, tax and implicit asset-based administration fees. The analysis is based on balanced options which have exposure to growth style assets of between 60% and 76%. About 60% to 70% of Australians are invested in their fund’s default investment option, which in most cases is the balanced investment option. Insurance is based on median default cover for each age and the average associated premium for that level of cover across genders and occupational ratings.…

• Research funds to make sure you are still in the right one, with good performance and reasonable fees. • Consolidate your super into one account and track down any lost super. • Make sure you have adequate life, TPD and income protection insurance for your needs. • Understand the investment options. Higher returns can mean a higher level of risk but you have time on your side. • If you are a low to middle income earner, make an after-tax contribution and get the federal government’s co-contribution. • Plan ahead and work out what income you want in retirement. • Estimate whether your contributions will be enough or whether you should salary sacrifice to top up your savings.…

David, 50 Super balance: $135,000 Salary: $100,000 Insurance: default cover of $100,000 In the countdown to retirement, the race is on to have as much in superannuation as you can. Being in the right fund is crucial for David. If he has made the wrong choice he will only have $261,031 after 10 years. But if he chooses the best fund he will have $377,437, an additional $116,406. SuperRatings has analysed the funds and CareSuper, with more attractively priced insurance of $3113 for $100,000 cover, comes out on top with a 10-year net benefit of $150,751 less insurance. Rest Super is in second place overall with insurance costs of $5101 and Hostplus, in third place, charges $7058.…

When shopping around for a rewards credit card there are a number of factors to consider to ensure you get the right one for you. First, think about what type of rewards you want. The main options include frequent flyer points, merchandise, gift cards and cashback. Of course, it’s not as easy as saying you want a free flight to London every year so you’ll go for a frequent flyer program; you need to consider your spending patterns. And this still comes with the caveat that you pay off your card every month. “If your spending is light it’s probably not flights as it will take too long to earn a flight,” says Canstar’s Mickenbecker. “Shopping vouchers are probably a better option.” If you want to earn frequent flyer points,…

NAME: Carren O’Brien BUSINESS: Pulse Fitness & Lifestyle, Avoca Beach, NSW QUESTION: What insurance do I need for my business? After taking time out to be a stay-at-home mum for the past five years, I’m relaunching my personal training business, Pulse Fitness & Lifestyle on the NSW Central Coast. I conduct group training in local parks, one-on-one coaching, as well as sessions in a small studio in my garage. I want some advice about what insurance cover I need to protect myself, my clients and my business. 1 Inspired by TV’s Ninja Warrior Let me start by letting you all know that Carren is my wife and I think it’s great she is back in business. I thought her question and the expert responses might be useful for other readers.…

DON’T LOOK NOW, BUT ... The changes are already happening. Commonwealth Bank made news in June when it announced it would spin off its financial advice and mortgage broking businesses into a separate company. NAB said it would sell its wealth arm, MLC, earlier in the year and ANZ sold its OnePath wealth management business to IOOF late last year. After rushing to get into the wealth management business more than a decade ago, banks are now questioning whether ownership of distribution channels such as financial planners and brokers is worth it. BAD BEHAVIOUR Increasing regulation isn’t new. For financial advice, in particular, the government has been tightening the rules for years. But the royal commission has put the spotlight on just how conflicted banks are by owning advice or,…

Q How do I know whether I’m eligible for the First Home Super Saver (FHSS) scheme? Eligibility for the FHSS is assessed on an individual basis. That means a couple purchasing a joint property can access their own eligible FHSS contributions. One person’s ineligibility will not affect the other party’s eligibility. You can start to make contributions from any age. However, to access the funds you need to be over the age of 18. To be eligible for the FHSS you must: • Have never previously owned property in Australia, including an investment property, or commercial property, or vacant land, a lease of land or a company title interest in land (unless the Australian Taxation Office deems that you have suffered a financial hardship, although it would be best to determine…

1 Takes no commissions, referral fees or kickbacks. This ensures that they won’t make any money from their recommendations about property, shares and super. 2 Offers fixed fees. Make sure they do not charge a percentage fee on investments as this creates a conflict. Independent advisers should charge a fixed monthly, quarterly or annual fee or an hourly rate. 3 Has nothing to sell you. The planner’s business should not make any money from selling investments. This includes its own managed funds. Some planners have business relationships with property developers and receive commissions from recommending properties to their clients. Even recommending a buyer’s agent can be problematic. 4 Is privately owned with an AFS licence with no links to banks or investment providers. 5 Demonstrates deep knowledge of all asset classes,…

‘When does a bust in the market normally happen?” I quietly asked a group of mates a week or so ago. The chorus came back: “After a boom.” So if this is so commonly understood, why are we all so shocked when a market bust arrives? And if we also know the conditions of a boom (buyers dictate price, not sellers) then why are so many of us so poor at taking action during these periods? Think Melbourne and Sydney property, global government bonds, Bitcoin or today’s stockmarket. Each of them boomed, giving plenty of signals for people to sell. Some did, no doubt, but plenty stayed the course to their ultimate misfortune. There can be many reasons: my money is tied up, I don’t have the time, I’m worried…

• Complaints about self-managed super funds. • Complaints that haven’t first been made to the fund’s internal complaints arrangement. • Complaints about a fund’s management such as investment performance or the level of fees. • Complaints about death benefits or disability benefits lodged outside prescribed time limits. • Complaints about actions or decisions made before the fund became regulated (July 1994). • Complaints about an annuity policy acquired before December 12, 1995 unless it was varied after that date and the complaint is about the variation of that annuity policy. • Complaints about decisions of some state or commonwealth government super funds. For more information see sct.gov.au.…

‘Falling house prices need to be put into perspective given the very strong gains since early 2012’ The financial year has just concluded and Aussie sharemarket investors have plenty to smile about. Total returns on the ASX All Ordinaries accumulation index, which includes dividends, surged by 13.7% over 2017-18, just short of record highs. The performance of Aussie equities was the strongest in four years, outperforming both residential property (up 2.7%) and government bonds (up 3.1%). An investor who employed a diversified strategy across asset classes would be well pleased with the performance over the past year. But will it continue? Certainly, Aussie economic and financial metrics remain encouraging. Australia has underlying inflation below the Reserve Bank’s 2%-3% target band at 1.9%. Economic growth is lifting (at 3.1%) with quarterly…

‘As reliability advances electric cars may not need any repairs’ Electric and autonomous vehicles capture the imagination and the headlines. Like many earlier technologies, such as the internal combustion engine and commercial aircraft, electric vehicles (EVs) promise to change the course of human history. But it is easy to mistake excitement about the technology for a free ride to investing success. History shows that new technology, even technology that has changed the world, has not necessarily made for good returns. In auto manufacturing the wave of change will disrupt everything from petrol stations and fuel tankers to coalmines and mechanical car maintenance. On the supply side, as component makers scale manufacturing and the production costs fall, cheaper products will open new markets and demand. It may come as a surprise…

For an article supposedly about “safety”, I’ve deliberately spent a long time talking about returns because there’s nothing “safe” about letting inflation eat away at your cash. The biggest risk many people face is, frankly, not taking enough risk. There’s little doubt that Australian government bonds are far more likely to protect your capital than a speculative punt on shares, just as quality shares have a far lower risk than a random junk bond. More useful, though, is the comparison of the average return from each asset class. If you add in the benefit of franking credits, coupled with my suspicion that bonds are likely to be overvalued (in absolute terms, as well as by comparison with shares), I think we should turn the orthodoxy on its head: the riskiest…

Rank Super funds have been ranked by five-year returns. Returns are net of maximum fees. High balances may qualify for lower fees and thus better returns. Rankings for one-, three- and seven-year returns show the performance of the particular fund compared with peers. NP means membership of the fund is restricted. Pr means performance results are preliminary. Returns are as at May 31, 2018. SuperRatings rating Platinum are best value for money funds; Gold are good value for money; Silver, reasonable value; Bronze are below average in performance and features; and Blue are bottom of the ladder.…

APIR is the identification number of the fund. ICR: Investment cost ratio, which includes the annual management fee paid to the fund manager as well as indirect costs such as the performance fee. Returns are as at June 30, 2018. Morningstar Rating very good performer good performer average performer poor performer very poor performer NAp Not applicable NAv Not available The bar chart shows the five-year growth of $10,000 invested in different asset classes at the end of June 2013 until the end of June 2018.…

Daniel co-founded Thankyou with his best mate Jarryd Burns and then girlfriend, now wife, Justine Flynn in 2008 when they were 19 and 20. Thankyou is a social enterprise that commits 100% of profit from its water, baby and personal care ranges to help end global poverty. To date, it has given over $5.8 million to people in need in 20 countries. Daniel is also author of Chapter One, a book sold at a “pay what you want” price that tells the startup story of Thankyou. The book has so far raised over $2.5 million to fund the future business goals of Thankyou.…

What an inspiring interview with Luke Pearson (June issue)! He has found such a good way to connect and empower Aboriginal people all around the country with his IndigenousX rotating Twitter account. If more and more Aboriginal people can express their views and be heard, we can become a more inclusive nation. The interviewer, Alan Deans, is both respectful and non-judgemental throughout, which makes the interview such a pleasure to read. As a migrant from the Netherlands, I enjoy living in a multicultural country. However, I do feel that we can all do more to combat racism and discrimination, especially when these are directed towards Aboriginal people. More mutual respect, more understanding and more listening to each other will benefit all the different people living in Australia, and make us a…

The 1970s saw the introduction of the modern credit card. Back then, the entire balance had to be repaid every month and limits were small. But today’s cards are a whole lot more dangerous than their ’70s counterparts. This little piece of plastic lives in the wallets of 12.3 million Australians. It does appear that banks have become addicted to selling us expensive credit. The result? Australians are now struggling with over $45 billion in credit card debt. ASIC has just released a report on credit cards that shows some financial institutions continue to impose tricky repayment structures that have been banned since 2012. It found that four credit providers – American Express, Citi, Latitude and Macquarie – are charging their customers “more interest than they should, and their conduct…

A new program, Incent Loyalty, rewards customers with the Incent cryptocurrency, INCNT. The digital currency can be shared, saved or exchanged and will never expire. Customers are not only rewarded for shopping online but for browsing the internet using a special toolbar. Mortgage Choice has introduced a new broker remuneration structure in response to backlash from its franchisees. The new opt-in model will increase the average commission payout rate on residential lending from 65% to 74% and use a hybrid trail commission structure which pays the best monthly outcome on either a flow or book basis. Susan Mitchell, CEO of Mortgage Choice, says all of the broker franchisees are likely to opt in to the new model, as they will be better off financially. AustSafe Super and Sunsuper have announced…

Everybody dreams of making money out of the thing they really enjoy doing. But what if your dream comes true? What are the tax consequences? If you bake a few cakes and sell them at a local market on a Saturday morning, or knit quilts that you sell to friends, you might think it can’t possibly be taxable. Sadly, you’d probably be wrong. Every year, the ATO pursues thousands of taxpayers who thought they had a hobby but it considered they had a business and taxed them accordingly. So if you answer yes to any of these questions, your hobby might well have tipped over into being a small business: • Is your activity being undertaken for commercial reasons? • Do you undertake it to make a profit? • Do…

The price of property has made the dream of owning a home inaccessible for many people. But a new study has found that 31% of Australians would consider co-buying property with a friend or relative. Although co-ownership is an extremely viable option, and makes purchasing property more accessible to a significantly higher number of people, like any investment strategy it’s crucial to understand all the factors involved. Here are ways to ensure the safety of both parties and avoid the ultimate co-ownership break-up: 1 Due diligence You must always know where you stand. Be involved in all bank and loan meetings, and in legal agreements throughout the co-ownership process. 2 Compromise Doing anything with another person means that you may need to be flexible at times. This may be on…

Australian residential property outperformed all asset classes for the 10 and 20 years to December 31, 2017, according to the Russell Investments/ASX long-term investing report. Although at face value residential property is the clear winner, Russell says that a closer look behind the headline numbers shows there’s a lot more variation year on year. For example, while Australian residential property took the top spot in 2001 and 2002, it also came last (below cash and Australian bonds) in 2004 and 2005. Other asset classes including global shares (hedged and unhedged), Australian shares and Australian listed property found themselves in the top spot one year and bottom the next. This really highlights the mantra that past returns are no guarantee of future performance. Russell Investments’ analysis shows investors generally tend to…

Australian dividends are highly concentrated, with six big companies paying half of all dividends on the ASX in 2017. They are the big four banks – Commonwealth, NAB, Westpac and ANZ – as well as Telstra and BHP Billiton, according to Don Hamson, Plato Investment Management’s managing director. He says that while there are good dividend opportunities still on the Australian sharemarket, investors should look to global shares where there are good dividends but no franking credits. While the average dividend yield of the MSCI world index (ex-Australia) is only 2%pa over 10 years, there are certain countries with higher yields. For example, the average dividend yield of Spanish companies is 5.5%, in Finland and Portugal it is 4.8% while in the UK it is 4.2%.…

Joe wants to make smart decisions in the ... Countdown to retirement Q I am almost 63, self-employed and work full time; my wife is almost 60 and works part time. We have two grown-up daughters, aged 25 and 29, who are working full time. We are trying to plan for our retirement years and to also help our daughters with a house deposit, etc. I plan to work until about 67 to pay off all debts relating to our investment properties, after which I plan to work part time; my wife plans to work part-time until about 65. My queries are: 1. We have until September this year to decide if we should sell our previous family home to avoid paying CGT. I have done the sums and feel…

I know plenty of people who are in an awful superannuation fund. I ask them: “Why did you choose it?” The answers vary. Often an employer picked a fund run by a life company or a big bank. Or a financial planner or bank rep recommended a retail fund. Or they went into a default industry super fund that consistently underperformed. In some cases, people moved from a really good fund to one of the worst. It is not uncommon to be in a bad super fund. In fact, 4.6 million Australians with $197 billion in a MySuper account are in a poorly performing fund, according to the Productivity Commission’s review of superannuation. Around 9.8 million Australians are in MySuper funds that perform above a benchmark designed by the commission.…

• Retirement is a long way off but become involved now. • Look at different funds to work out the best one for you. • Check the fees you are paying and see how they compare (see page 39). • If you don’t earn much, you could qualify for the low income tax offset. • If you make an after-tax contribution, you could get a government co-contribution. • Consider whether you should opt out of your life and TPD insurance if you have no dependants and financial obligations. • Make sure your investments suit this stage in your life.…

Alecia, 40 Super balance: $80,000 Salary: $85,000 Insurance: default cover of $200,000 If she picks the best fund, which Super-Ratings has assessed to be CareSuper, mother-of-two Alecia will have a balance of $258,101 by the time she turns 50. However, if she is in the worst fund she will have only $184,785 and be $73,316 worse off. Insurance coverage of $200,000 gets more expensive for 40-year-olds. This influences the order of the top five funds but the line-up remains the same when you take into account investment earnings, fees, tax, percentage-based administration fees, as well as default insurance costs.…

Anna, 60 Super balance: $215,000 Salary: $90,000 Insurance: default cover of $50,000 Anna aims to retire in five years. If she picks the best fund, which SuperRatings has analysed to be Host-plus, she will have a balance of $418,701 by the time she turns 65. However, if she is in the worst fund she will have only $336,338 and be $82,363 worse off. Insurance coverage of $50,000 is too expensive for most 60-year-olds. This influences the order of the top five super funds with the inclusion of Cbus and Intrust. Intrust, the Queensland-based fund that was originally set up to cover hospitality workers and is now open to the public, has reduced its premiums for income protection by up to 12% and for group life and TPD by 7%, without changing…

When I went back to work after having my first baby, I soon found out that my chosen child care centre was pretty awful. It wasn’t easy to find another one with a vacancy. And when I eventually did the new one wasn’t so good either. Finally I found a carer called Dianne who ran a wonderful family day care centre. My daughter was happy and loved going there. I was less stressed and didn’t feel as guilty going to work. Around 44.5% of parents returning to work feel stressed while 42% feel guilty, according to a survey by Real Insurance. But it isn’t just the emotional roller-coaster of returning to work that is hard on parents – 88% say the financial burden of high child care costs takes a…

So you’ve sold an overseas property or received an inheritance from someone overseas and you want to transfer the money to Australia – how do you do it? It’s a question Money gets a lot, particularly from UK expats, which is why we will use that as our example. Start by comparing providers’ costs. Consider both the transfer fee and the exchange rate as providers often add a mark-up into the exchange rate, says Mozo’s Kirsty Lamont. “When you are dealing with a large sum of money, even a difference of a few cents in the exchange rate can make a huge impact on your final amount,” she says. “While most banks offer a money transfer service, it is usually more cost-effective to opt for an international money specialist if you’re…

Higher rental yields and considerably lower prices ... what’s not to like about investing in regional real estate? And with the statistics showing that regional housing markets are now outperforming the capital cities it’s a good time to consider investing in a country town or even upping sticks and moving to a suitable regional area. It goes without saying that those looking to invest in regional areas need to do some extensive research. So here are six rules for successful regional investing: 1 Places within a two-hour commute of major cities are most in demand from both tenants and owner-occupiers. The trick is to find areas where prices are still reasonable. Take Geelong, Victoria’s major regional city, where house prices rose 9.8% in the 12 months to April 2018, according…

US Alphabet: As the number of online users and usage increases, so will digital ad spending. Android’s dominant global market share of smartphones leaves Alphabet’s Google well positioned to continue generating top-line growth as search traffic shifts from desktop to mobile. Walt Disney: The parks and resorts segment has rebounded strongly from the recession, and the opening of Disneyland Shanghai should provide additional momentum. The Star Wars franchise broadens the demographics for the company. Disney’s large library of content with popular franchises and characters reduces the volatility of movie-making over time. BlackRock: The world’s largest asset manager had $6.316 trillion in total assets at the end of March 2018 and clients in more than 100 countries. Product diversity and a heavier concentration in the institutional channel have traditionally provided BlackRock…

The industry would have us believe that people need comprehensive personalised advice but many do just as well with low-cost, diversified default options. Just as default industry superannuation funds are often much better for investors because of the low fees and quality investments, robo advice models such as Stock-spot and Six Park, where clients are put into low-cost, diversified exchange traded funds, can be much more effective than a personalised advice model with a spread of products that are tied to the parent company.…

In an ideal world everything runs smoothly and pans out just as you expect it to. But in the real world things can and do go wrong. What, then, do you do if your super fund has miscalculated a benefit, dragged its heels making a payment or refused a disability benefit? If you are a member of a regulated super fund you can lodge a complaint with the industry’s external dispute resolution scheme, the Superannuation Complaints Tribunal (SCT). Its service is free and its determinations are binding. But before you go down that route, you need to give your fund the opportunity to fix the problem. That means calling or writing to its internal complaints division outlining the complaint. The fund has 90 days to respond. If the outcome is…

My first mode of transport was a Honda C70 step-through motorcycle. The 70 stood for 70 cubic inches of raw power. That bike got me through my first year at university in the UK. I once rode home 55 miles through sleet and thick snow and didn’t think twice about it. My first car was a Citroën 2CV6. The 6 stood for 600cc, which is how big its pitiful engine was. It still goes down as one of the best cars I’ve ever owned. It did about a thousand miles to one tank of gas and you could source most spare parts by visiting an ordinary hardware store. To buy this symbol of my manhood I had to save £600 working in water at a cress farm eight hours a…

There’s nothing safer than cash in the bank, right? Well, that depends on quite a few things, really. Yes, No. 1 is the safety of the banking system (and the willingness of the government to step in). But there are other, more hidden risks. Let’s say the Australian dollar – for one reason or another – falls meaningfully against world currencies. Your $100 used to buy a decent pair of jeans but those jeans are now going for $140, thanks to the impact of that devaluation. Yes, you still have your money but how much does it buy? The same is true of a more insidious thief: inflation. Oh, it’s only small, right? Yet compounded over a lifetime it’ll likely take more than half of your money away (measured by…

What was your first job? My first official job was at McDonald’s but throughout my childhood I ran a series of little businesses, from selling gobstoppers and pet yabbies to a car wash. What’s the best money advice you’ve ever received? Don’t let money make your decisions. It’s easy to let a good “money” opportunity help you make a decision but if you can disconnect money from making decisions and instead make decisions out of principle, values and your strategy you’ll live a much freer life. What’s the best investment decision you’ve made? Over the past 10 years the best investment I’ve made is to focus my time (the most valuable resource any of us hold) into growing Thankyou. Sure, it hasn’t equalled personal wealth as it’s a social enterprise that commits 100%…