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Let me make you rich!

Peter Switzer
26 September 2016

By Peter Switzer

With apologies to Paul McCartney for a slight variation on his theme, but the world is filled with silly stories. What’s wrong with that? You need to know? Well here I go again…

I want to fill the world with sensible stories that make you better off and, hopefully, happier.

I know money is not a precondition for happiness, but happiness can be damn hard to achieve when you’re scrimping day to day and always in debt.

As Sophie Tucker once proclaimed: “I’ve been rich. I’ve been poor. Rich is better!”

I was fascinated by the silly stories that capture our imagination over a weekend, though I can’t accept that epic sporting games, such as the AFL and NRL preliminary final games, fell into this category. Though Pippa Middleton losing nude shots of her fiancé to a hacker is definitely in this class of classic silly stories.

Anything with the Kardashians in it potentially is silly and distracting, though I have to acknowledge that Kim is a genius at business and marketing. We all could learn from what she does but not what she dishes up as content. She knows her audience and she delivers to them in spades!

But her stories are silly.

My story today was prompted by an ad for a bank home loan at 3.89% but the comparison rate was around 5%! I’ve been talking about the comparison rate for years and I’m staggered at how many of my media colleagues, to whom I talk (and I presume their audiences) just don’t get it — when it comes to a home loan offer, you always need to check the comparison rate.

Why? Well the comparison rate adds in the fees and charges that go with the loan. So a lender could offer you a great sounding rate of interest and then quickly say what the comparison rate is because so many Aussies simply don’t know what it means.

They’re potentially going to be ripped off, that’s what it means!

When we started Switzer Home Loans, I told my colleagues I wanted the headline rate on our variable rate to be the same as the comparison rate, so I could never be accused of being deceptive to customers.

Right now, our variable rate loan is 3.89% and so is the comparison rate. With fixed loans, there can be a little variance, so our two-year fixed rate is 3.97% while our comparison rate is 3.99%, which is so close,

I think we can call it ‘virtually’ the same.

The point I want to make is we know so much about unimportant things like The Bachelorette (whatever that is?) but so little about what affects our wallets, for example:

  • We don’t know about the difference between the headline rate and the comparison rate.
  • We don’t know how our home loan rate of interest compares to the best rates in the market.
  • We don’t know the rate of interest we’re paying on our credit card.
  • And we don’t know what the best rate in the market is for credit cards. Try the ME Frank Credit Card, which is 11.99% and the same rate for cash advances, while the Coles Low Rate Mastercard is at 9.99% for purchases but 19.99% for cash advances!
  • Most of us don’t know what our super fund is charging or how they compare to the best in the market. So have a look here:

Here are the best 3-year performing funds and their average returns.

1. UniSuper Accum (1) – Balanced 10.3%

2. BUSSQ Premium Choice - Balanced Growth  9.7%

3. MTAA Super - My AutoSuper 9.69%

4. HOSTPLUS – Balanced 9.69%

5. Cbus - Growth (Cbus MySuper) 9.59%

6. AustralianSuper – Balanced 9.57%

7. Intrust Core Super – Balanced 9.4%

8. Catholic Super – Balanced 9.21%

9. CareSuper – Balanced 9.10%

10. Energy Super - Balanced Option 9.07%

Source: Superratings.com.au for 31/7/2016

Building wealth is a success story and not doing so is a failure story. I hate to make it so blunt. It’s an attitude issue.

You have to ask: “What does success look like for me?”

Define it. Visualise it. Desire it and put numbers on it, such as $1 million in retirement and house paid off, etc.

Live it and believe it can happen, like great sportspeople and make it happen.

I learnt on the weekend that the great guitarist Tommy Emmanuel practiced 16 hours a day until he was exceptional.

Making your wealth success goal a part of your life and believing it will help make it happen.

My favourite Muhammad Ali quote goes like this: “It’s the repetition of affirmations that leads to self-belief and when that self-belief becomes a deep conviction, things begin to happen.”

When people ask for help to grow their wealth or their business, I start with this simple line they have to understand: “If nothing changes, nothing changes.”

So what kind of change could you make? Well, try to stop reading silly stories and at least read me each morning on Switzer Daily as my website has been created to make people richer, money smarter and business savvy.

If that appeals to you, then I’ll expect to see you there each morning!

If you liked this article you'll love the Switzer Report, our newsletter and website for trustees of self-managed super funds. Click here for a FREE trial and to hear more of Peter’s expert commentary and advice.

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