Dear Aunt Sue
I am hearing loads of stories about superannuation being a terrible investment. And yet everyone says I should put more money into it. Who should I believe.
Torn and Twisted, Berwick
Dear Torn and Twisted,
Firstly, you should not believe everything you hear. Sometimes people lead you down the wrong path and before you know it you have missed out on great opportunities. Secondly superannuation is not an investment – it is an investment vehicle. Just like a bank is an investment vehicle – a place to put your money, where it will hopefully grow. We can invest in 4 basic types of investments – Cash, Fixed interest, Property and shares. Now you, torn and twisted can invest in any of these investments and sometimes you will get good returns and sometimes very bad or negative returns – it is all based on what you have invested in at the time and what that investment is doing. Torn and twisted you can also invest in exactly the same way within a superannuation fund. For example, you can instruct your super fund to put all of your money in the share market if you wish and if that market is falling then your funds will fall too. But if the share market is gaining then your super balance will rise accordingly.
So the “terrible investment” is not because it is in a super fund – it is because the money in that fund is invested in an investment that is not doing very well. The moral of this story dear torn and twisted is; you need to take control of where your money is invested both inside and outside of super. I can pretty well guarantee that if you had your super balance available to you now you would take interest in where it was invested and how it was performing. But because many people cannot access their super funds for a while they tend to just forget about it – out of sight and out of mind. Don’t you be one of those people torn and twisted – take control and reap the benefits. So until next time boys and girls – keep those questions coming in by visiting our website https://www.moneynatters.com.au and using the contact us tab.
And finally “Too many people spend money they haven’t earned, to buy things they don’t want, to impress people they don’t like.”
Have fun and keep smiling – Aunt Sue
