(03) 9020 2905I have a rule with Mrs DebtMan. Well, I have a few. So does she. And hers includes no mobile phones at the dinner table.
She goes all Cujo-like – frothy at the mouth – if I receive 100 texts over dinner from the school-dad, punting-club “Turkeys”. Which is often.
But one of my rules is simple: “If it’s not in my diary, it doesn’t exist.”
That means … if she wants me to accompany her to do something or go somewhere, then it needs to go in my diary. She needs to “invite” me to a “meeting”, via Outlook.
She’s not allowed to tell me, when I walk in the door on a Friday night, that I need to be ready in 15 minutes to attend an un-diarised event.
Is that not fair? If I look in my diary and see nothing on a Friday night, I mentally prepare myself to get home, plonk my butt on the couch and watch footy with my little DebtKids gently collapsing asleep in my arms, while texting those blasted Turkeys about various critically important football matters. Ideally, on those nights, the fridge would be full of frothies.
If an event is in my diary, I mentally prepare myself to lift to party. Easy.
I just want to see into the future a little bit.
There are other things, however, I like to see a long way into the future.
Like getting old and wrinkly.
I’m a Gen Xer. I’ve got decades to “retirement age”. But I want a rough idea of what my retirement looks like. Specifically, what it doesn’t look like.
I want to know that when I’m grey and wobbly, that me and “the poverty line” will be operating in different social circles. We won’t know each other.
I realise I won’t be rich-wrinkly and classy like, say, Harrison Ford and Sean Connery. But when I want to travel, or spoil the grandkids, or eat out at a TV chef’s restaurant so I can yell at them when I see them on the tube, then I want to know that I’ll be able to afford that.
Not possible on the government age pension. It might, for some, be possible on whatever minimum payments have been made into your super account.
But, for most of us, it’s going to require something more than just a bit in super and owning our own homes. It will require investment. Investment require sacrifices. Investing now means not spending now.
To keep it simple, there are two ways to invest. Outside super, or inside super.
If you’re Gen X, you’re roughly aged somewhere between 35 and your early 50s.
And if you’re not taking super seriously by now, you’re screwed up.
Super should be a crucial part of your investment strategy. Why? Because it’s a tax dodge. You pay stuff-all tax on the way in, stuff-all tax while it’s in there and stuff-all tax (possibly none at all) on the way out.
Understand this, Gen X. For all of the stuffing around that has been done to super … for all the stuffing around that will be done to super in years to come … it will always be a tax haven for your retirement.
Beach Boys. “Kokomo”. “Off the Florida Keys …”
Super will always receive more favourable tax treatment than investments you hold in your personal name.
The more money you have in super the less tax it is likely you will pay, overall, in your life.
I wouldn’t entrust everything to super. But you’re bonkers if you ignore it.
So how do you take good advantage of whatever the rules will be for super in the future?
Contribute more: Salary sacrifice something. Depending on your income, a few thousand dollars a year. Maybe $10,000 a year. The closer to 50 you are – bless those Xers who are on the other side – the more you should do.
And invest as aggressively as you can bear. For as long as you can. Sure, we’ve had a three-year bull-run. And the pullback of recent months has probably been an important breather. But we’ve got plenty of time till we can access super, so go hard, X-Gen!
These two measures will allow us to take advantage of the other strategies on this page … when our time comes.
Bruce Brammall is the author of Mortgages Made Easy and managing director of Bruce Brammall Financial. E: bruce@brucebrammallfinancial.com.au.