To avoid getting involved in the usual garbage that newspapers preoccupy themselves with, occasionally I check out the best deals for anyone who prefers to be rich rather than poor.
This comes as a former Reserve Bank director and chief economist of a number of banks, John Edwards, suggested we could see eight interest rate rises in two years. I’ll interview John this week on my TV show and hope it was a case of newspaper selective reporting!
Anyway, I’ve always been surprised when I ask people about what interest they pay on their credit card or home loan and what they get on any cash they have in the bank.
Most people don’t know. And they don’t know what their super fund charges them, which could cost them over a hundred thousand dollars, or even more, over 45 years of work!
Our ignorance of the costs we endure means that we prefer a poorer life driven by that very ignorance. Under some circumstances, many of us don’t deserve much compassion when times get tough because we’ve made things tougher by being lazy, silly, indifferent, too busy or plainly not educated on the subject.
So here comes some education, in a nutshell:
Experts warn that past performance isn’t a reliable indicator of future performance but many of these funds have done well for over a decade (e.g. Australian Super, Catholic Super, Sunsuper and Hostplus).
When it comes to super, you need a fund where returns are consistent and good and where the fees are less than 1%. That’s the right combination, which could potentially give you, or save you, hundreds of thousands of dollars over a lifetime of super, provided the Government doesn’t spoil your party.
Of course, there are many other things you can do to ensure you end up richer rather than poorer over time, but, if you at least do some homework on the areas above, you might live the life of Reilly in retirement and even have a good time along the way to your last day at work! But you have to have the desire to make money things happen.