Barefoot Investor: Time to do a financial deep dive on your super

In 2017 a third of Aussies were ripped off to the tune of almost $6 billion in unpaid super, according to Industry Super Australia. So don’t trust your pay slip. Instead, trust your super statement, writes the Barefoot Investor.

In 15 years of answering readers’ questions, I have never, ever received one like this:

Subject: ‘YOUR ADVICE GOT US FIRED!’

TOM WRITES: “My girlfriend Jackie and I are both diving instructors, and after reading your book we decided to set up a salary-sacrifice contribution arrangement with our employer.

Six months down the line I realised we had not been paid any of our contributions or, in fact, any of our super for two years!

I hate confrontation, so I wrote our boss a very professional letter asking for payment of super in full for both of us.

The next day I came to work and found all our gear sitting out on the road and a furious shop owner yelling and spitting in my face telling me to get out!

Months of going in circles — being told by Fair Work to call the Ombudsman and then to call the Australian Taxation Office — have resulted in nothing. It has now been a year.

Yet it’s not all bad. After reading your book, we saved and bought our first home, and then set up our own snorkelling business on the side — where we earn as much from one trip as we did in a week at that shop.

Your book has changed our lives and we are happier than ever.

So maybe it was the best thing that could have happened?’’

The Barefoot Investor’s book changed the lives of a couple of scuba diving instructors.

BAREFOOT REPLIES: Hi guys, congrats on getting your act together.

Yet as far as it being “the best thing that ever happened”, well, I think you’ve got happy gas in your scuba tank.

For the rest of us playing along at home, here’s how the world really works: You steal out of the till, your boss immediately calls the cops, and you’re charged with a criminal offence. Your boss steals money from you, and they can repay it without so much as a slap on the wrist.

No, seriously.

Next month the government is set to introduce a one-off amnesty for bosses who have unpaid super, without penalty.

Now, given that in 2017 a third of Aussies (some 2.85 million people) were ripped off to the tune of almost $6 billion in unpaid super, according to Industry Super Australia, it’s time to do a financial deep dive.

Here’s you: “But I work for a big company — they’ll protect me.”

Here’s me: “Woolworths”.

Let me tell you a couple of things.

First, I’m betting that 2,849,990 of those ripped-off Aussies had absolutely no idea they’d been robbed (the 10 blokes who worked for Clive Palmer had a decent hunch).

Second, almost every one of them got a pay slip saying they had been paid their super.

Here’s the thing: don’t trust your pay slip.

Instead, trust your super statement.

So this week I want you to do me a favour: Call your super fund and check that the money has actually hit your super account.

You may be surprised, and if you are, please write to me.

Tread Your Own Path!

The Barefoot Investor says young people should be in high-growth super offerings.

Q&AS

ALL MY EGGS IN ONE BASKET

EMMA WRITES: Following your recent post about expensive super funds, I had an appointment with a financial adviser at First State Super, where my fund is held.

After doing a “risk report” on me, the adviser suggested I essentially “put  all  my eggs in one basket” by investing 100 per cent in high growth.

I am in my mid-thirties with a hubby and three kids under five.

My question to you is: Would you put all your eggs in one basket?

BAREFOOT REPLIES: I actually think this is good advice.

I’ve said the same thing in my book: young people should be in high-growth super offerings.

I took a look at First State’s High Growth Option, and it has: 30 per cent invested in Aussie shares (think CommBank, CSL, Woolies and a couple of hundred other companies), 37 per cent invested in international shares (think Facebook, Apple, Nike and over a thousand other companies), 30 per cent invested in unlisted assets (like the Sydney Convention Centre and various hospitals and other large projects), and 3 per cent in cash.

So, while it’s true that you’re investing in growth assets, it’s not like you’re putting all your eggs in one investment.

Emma, you have at least 30 years before you can access your super — that’s more than enough time to ride out the temporary dips of the share market.

In fact, the biggest risk you face is not having your money in high-growth investments at all.

The questions in the school banking survey were set by the corporate cops, ASIC.

HARD QUESTIONS BUT ANSWER IS CLEAR

MARY WRITES: I just wanted to say that I completed your survey about school banking. I found the questions really longwinded and complex! It almost felt like my year 12 English exam (back in ’79).

It’s strange, as your book is so lovely and easy to read.

BAREFOOT REPLIES: Thanks for the backhander! The questions were actually set by the corporate cops, ASIC.

Look, they’re bureaucrats, not Ernest Hemingway.

However, they do have an important aim with their questions — to work out what the community thinks about banks buying their way into classrooms.

And that’s why my submission was about giving people like you a voice. In fact, 14,195 people contributed to my submission.

And, not surprisingly, 91 per cent of them want to see ASIC get banks out of schools. Over to you, ASIC.

MORE BAREFOOT INVESTOR

MY LEGACY TO HONOUR A DEAR FRIEND

RACHEL WRITES: I recently lost a dear friend due to a sudden cardiac arrest at the age of just 29.

She was financially independent and had learnt to be smart with her money.
I remember seeing her two orange ING cards and asking her about it.

She put me on to your book, and since reading it I have been financially better off and have started saving for a 20 per cent house deposit with my partner.

I wanted to say thanks to you, and also I wanted to say I am so proud of my friend.

Keep on educating, Scott!

BAREFOOT REPLIES:
I am sorry for your loss.

But what a great gift your friend left you with: a more confident financial life.

When I went to Brazil recently to look at financial education in poor areas, they spoke about it as being a multiplier — you learn it, then you share it, and it quickly has a cascading effect across the entire community.

So, honour your friend by passing on the lessons you’ve learnt to someone else you love.

That’s a legacy I’m sure she would have been proud of.

If you have a burning money question, go to barefootinvestor.com and #askbarefoot

The Barefoot Investor holds an Australian Financial Services Licence (302081). This is general advice only. It should not replace individual, independent, personal financial advice.

The Barefoot Investor for Families: The Only Kids’ Money Guide You’ll Ever Need (HarperCollins)RRP $29.99

Originally published as Barefoot Investor: Time to do a financial deep dive on your super