(03) 9020 2905Amazing, isn’t it? Governments force Australians to put large wads of their salaries into super. And then refuse to help them understand why. Or how. Or what.
(And then they change the rules every fortnight, so no-one knows what’s going on. But that’s a bitch session for another day.)
There’s never been a public education campaign about what to do with your super. If the new super minister would care to give me a call, I’ve got a few ideas …
So let’s boil this down simply.
There are four asset classes – cash and fixed interest (income assets), versus property and shares (growth assets). That’s also their order of inherent risk. Cash at the boring end. Shares at the risky end.
Given time, growth assets should outperform income assets. But you don’t have to go “all or nothing”. It comes down to your personal willingness to take a risk.
For an average dude, about 60 per cent should go into growth assets, about 40 per cent into income assets. Ta-dah! That’s the omnipresent “balanced fund”, baby!
For thrill-seekers, perhaps 80 per cent into growth and 20 per cent into income. A little more cautious? Maybe just 40 per cent growth and 60 per cent income.
Those seeking an extreme (high or low) risk can have up to 100 per cent in growth or income assets.
Us young’uns, Gen Xers, should take as high a risk as we can stand. Do a risk profile (you’ll find one at www.castellanfinancial.com.au) and go one risk profile higher. At least for the next decade or two.
Bruce Brammall is the author of Debt Man Walking (www.debtman.com.au) and principal adviser with Castellan Financial Consulting.