Archive for September, 2011

Sep27

Superannuation is not an investment – it is a structure.  It is simply a trust.  If you follow the rules, the trust structure gets amazing tax concessions.

People who rattle off that they ‘don’t like super’, will generally pay lots more tax throughout life, and live off less in retirement.  That’s silly – don’t listen to them.

The same people usually complain that Governments change the rules too much, and will do so again.  That’s true.  But have you ever stopped to think how often they change rules outside of super?  Heaps more.  So what’s the big deal?

I have heard lots of people complain when they don’t have enough super – but I’ve never heard a complaint from someone telling me they have too much.

I have heard people complain about ‘preservation’; how they can’t get their hands on super until they’re old; and how that’s a horrible thing.

In reality it’s the only reason why super is ranked the largest asset in retirement outside the family home. Preservation is most people’s saving grace, and ensures there’s plenty of cookies left in the cookie jar when it’s time to eat.

Your family home isn’t going to give you an income to live off.  So although super may rank as the largest asset in retirement behind the family home, it’s the most important one to help you maintain your desired lifestyle when you stop working.

Get smart on the super-sized benefits of super.

Sep20

Does it really make sense to spend everything today in case you die tomorrow?

Because you probably won’t.

So don’t try and justify stupidity with this quote.

In fact the stats are stacked in your favour that you will be alive tomorrow.  They say that you will live a lot longer.

That’s why the average life expectancy for males and females is increasing.

By all means ‘live in the now’, and enjoy every day to its fullest.

But before you do, make sure you first invest 10% of what you earn (in addition to the 9% your employer contributes to super).

You can still have heaps of fun spending the rest, and feel a lot smarter in the knowledge you have a plan for the future.

Build a portfolio that is designed to create a growing income for life.

Sep13

It’s not what you don’t know that gets you into trouble – it’s what you do know that then turns out to be wrong.

High conviction bets are made when you think you’re on an absolute winner – a financial certainty.

Sure the rewards can be spectacular if what ‘you know’ turns out to be right.

But life can be very uncertain.

Fortunes are only lost when diversification is thrown out the window.

Sep6

If a market keeps going up and up – don’t expect it to last.

If a market keeps going down and down – don’t expect it to last.

If something can’t go on forever, it won’t.

That uncovers one of the greatest dilemmas for every investor – who knows exactly when a market’s going to change direction?

Many people claim that they know.  Every day via the Internet, TV, radio and emails, we are inundated with predictions from economists, brokers, fund managers, researchers and media commentators telling us that they know.  The ‘noise’ is relentless.

Despite their claims, unfortunately we haven’t discovered anyone who can consistently or accurately time markets, or predict the future.

You can decide to listen to the ‘noise’.  As a result you will waste a lot of time reading about things that never actually happen, and increase your levels of confusion and stress.

The alternative is to adopt an investment philosophy that can ensure you will receive your fair share of returns, without the need to try and do the impossible – time when to get in and out of markets.

That sounds a lot more relaxing – and one that can last.