8M E8 MONEYJULY 2017
FROM THE EDITOR
Feedback
W
e had some great feedback on last
month’s cover story, “Why you only
need $275k in super to retire”. The sweet spot
to retirement is certainly a soft spot for a lot of
ourreaders.Somefeedbackwasgood,such
as that from Kerry on Twitter who described
it as “a practical approach to retirement”. Oth-
ers,likeMartinonemail,werenotsopositive:
“AsahardworkinggenYtaxpayerIamaghast
atthethoughtofallmyannualtaxesgoing
towards older generations who have failed to
adequately provide for themselves.” You can
read more reader comments below.
Good or bad, last month’s issue got us
talking about super and with the federal gov-ernment’s new super rules formally kicking
in this month, what better time. Even though
concessional contributions have dropped
from $30,000 or $35,000 to $25,000 (this
includes your employer’s contributions), super
isstilloneofthemosttax-effectivestrategies.
I’malsopleasedtoannouncethatSuper
BoosterDay,ajointinitiativebetweenMoney
magazineandtheAssociationofSuperannu-
ationFunds(ASFA),isbackforasecondyear.
The campaign is encouraging Aussies to make
a pledge by September 15 to boost their super.
Seepage31formoredetails.
Thismonthwecalledonseveralexperts
to put together smart strategies for growingSuper hits a soft spot
Asarecentlyarrivedmigrant(threeyears
now)andaqualifiedaccountant,Iamper-
plexed to see the Australian obsession with
real estate (notwithstanding the irony that
despite being a continent with so much
land, there exists a housing crisis), and
virtually no discussion on equity/managed
funds on prime-time television or from the
government. Time and again, it has been
proven that the best asset class over a long
period is equities. The Buffetts and
Vanguards of the world became rich
investing in businesses.
Even in developing countries such as
India, the government encourages invest-
ment through mutual funds that yield high
double-digit returns. These investments in
managed funds (equity linked) with a lock-inperiod of three years lower tax liability in the
yearofinvestment,andthegainsaretax
free when sold.
No other asset class gives you the return
ofequitiesoverthelongterm.Stocksarenot
everyone’s cup of tea and are perceived as
risky but if one looks at super funds (which
essentially make equity investments), the
returns are not bad. In a well-regulated mar-
ket such as Australia, where corporate gov-
ernance and reporting standards are decent
(tryChina!),theapparentrisksarelow.
Perhapsit’stimewechangedthenarra-
tive and encouraged ordinary people to
investinthemarkets,ratherthankeepchas-
ing real estate. And the government should
encourage this!
Adi, NSWUnhealthy obsession with real estate
Letter of the month
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APR Lwww moneymag com 2017 $7.95ISSUE^199 au@MoneyMagAUSKIDS & MONEYPAUL CLITHEROE’S SAYSUPERHOW TO HOLSTRATEGIESD $3.2M TAX FREE
REAL ESTATE AFFORDABLEWAYSTOBUY SHARING
ECONOMYSPECWITH REACASE STUDIESIALLLIFE
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YEAREARN AN EXTR
EXTRAODD JOBS$700PWRENTEXTRASTO$
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wwwMAY^2017 moneymag com$7 95 ISSUE (^200) au@MoneyMagAUS
CHOOSINGINVESTMENT PLATFORMSTHEBEST ONEWEALTH GUIDEHOW GENYCANGETAHEADHOW TOPROPERTYSUBDIVIDEDEVELOPMENT
OVERPWNEXT
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WHERE TO INVEST
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NFRASTRUCTUREHARESO SELL FOR BUFFETTSUSANHELYTHEGOODINVESTMENTENOUGH
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JUNE 2017 $7 95 ISSUE 201www moneymag com au@MoneyMagAUS
SELLINGREALESTATEFIXED FEES V COMM SSIONSELF MANAGED FUNDS10 MOST ASKED QUEST ONSPORTFOLIO SOFTWARE7 OPTIONS REVIEWED
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GOVERNMENTSPENDS
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INVESTING FOR INCOME:SHARES, A-REITs, ETFs & TRUSTSINSH
WARNING:THE RISK WITH BUYING A SHIPPING CONTAINER
PENSION+SUPER
5k
WHY YOU ONLY NEED
IN SUP
GLUDNTGNEREGOMERY
ELARECOS
THE SWEET SPOT
RATING THE BANKS★★AWARDSISSUE
TO RETIRE
Burden for gen Y
I understand the intent behind the story, but
asahardworkinggenYIamaghastatthe
thought of all my annual taxes going towards
oldergenerationswhohavefailedtoade-
quatelyprovideforthemselves,orgamedthe
systemtothepointwhereitisunsustainable.
It is beyond comprehension that given five
working decades to plan for retirement, 80%
ofthepopulationwillstillqualifyforthefull
age pension. Worse still, those who do plan
HowtogetMoney
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Make super a priority
Asasuperjunkie,Ireallyenjoyedlastmonth’s
coverfeature,“Whyyouonlyneed$275kin
supertoretire,”takingusthroughthemathsof
whatamodestsuperbalancecanfundin
retirement.Evenifyoufeelyouarebehind,or
havenothadachancetobuildasubstantial
balance, there is a great case for prioritising
super and increasing contributions, no matter
your age or work situation.
Susan, Vic