Albo takes a swipe at our super

Holy Hector!

Can’t a man leave the country for a fortnight without the entire financial system melting down?

I’m barely off the plane and I find out the Prime Minister’s been running the skewer up our super. My inbox is jammed with Barefooters like Brad:

“I’m sure you've picked up on Albo calling our super a ‘national asset’. He’s scaring the hell out of people, including me! I know you lean left and tend to defend Labor, but are you not alarmed by this? By following your steps I've got over $650k in my Hostplus super, yet the thought of him raiding it for his pet projects makes me sick."

(Brad reckons I lean left. My wife reckons I'm to the right of Genghis Khan. Truth is I've attacked every party viciously over the years. Just not all at once.)

So I spent the morning reading what Albo actually said, rather than what journos said he said.

Here it is:

“There is a real potential to see these funds as a national asset that can be used more appropriately and get better returns as well, not just for individuals and for retirees, but for the nation.”

Ah joy mray! as they say in Cambodia (kids, please don’t translate this).

Look, I get it. Australia has a productivity problem. Our living standards have suffered one of the sharpest falls on record. Albo wants to kickstart things, and he’s eyeing off the $4.5 trillion sitting in super to help.

He's seen what happens when governments with big money pick winners. Just look at China. Back in 2001 they decided EVs were the future. They bankrolled the whole lot. Today they make nearly 75% of the world's electric cars. The best of them charge in five minutes, drive themselves while simultaneously massaging your butt, and leave you with change from $50,000.

Now, I reckon Albo and the comrades would love to run Australia like Communist China. (Big plan, big cheque, no pesky questions).

There’s just a few problems with this idea:

Neither side can dig a bloody hole. I don't mean that as a metaphor. Remember Snowy Hydro 2.0? The Liberals sold it to us at $2 billion. Labor's now spent ten times that, years late, and they still haven't finished digging the hole.

Look, after twenty-odd years watching ‘can't miss’ ideas turn to dust, I don’t trust governments with our money. Come to think of it, I don’t trust the industry super funds either, who jet round the globe buying airports and toll roads and glass towers nobody can put an honest price on. (Yes, Brad. That includes Hostplus.)

Super funds have a legal obligation to act in the best financial interests of their members, so I find it hard to believe that they’ll play ball. That said, politicians can be very generous when it comes to spending our money.

For me?

That’s why I’m happy to be boring. My super is invested in a slice of the biggest companies in the world through a low-cost index funds. No private jets. No mystery airports. No grand government plans. Just my money, priced every single day on the share market where I can see it.

It’s our bloody money, Albo. Keep your hands off it.

Tread Your Own Path!

P.S.

We raised tens of thousands of dollars for baby-in-the-bag Sok and Sunrise orphanage in Cambodia.

To those of you who answered the call, thank you.

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Your Questions & Answers

• Revolution in Banking is Here?

• How to Get Rich With Property Investing

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A Revolution in Banking is Here?

Hi Scott,

I’ve been with ING for years and I’ve got no real complaints. But I read this week that Revolut has launched as an actual bank here in Australia, and it’s now covered by the government's deposit guarantee. Low fees, over 5% interest, and it says it’s a “financial superapp”, one app for all things money. It also does cheap currency exchange, which would be handy when we travel. Should I be taking a look, or am I better off leaving well enough alone?

Sonya

Sonya,

Revolut is very un-Australian, in a good way.

No minimum monthly deposit. No minimum balance. No penalty for touching your own cash. That’s a nice change from the bonus-interest obstacle course most banks make you run every month.

Now, about that 5% you read about.

You only get it on their top-shelf ‘Ultra’ plan … and that’ll be a hundred bucks a month, thanks.

Meanwhile Macquarie offers 5% on balances up to $2 million. No hoops. No monthly fee. No dance moves required.

Ah, but look at all the Ultra benefits!

Airport lounges, travel insurance, mobile data, and a ‘platinum-plated’ card, purrs their marketing.

Lounges?

Look, maybe. If cafeteria bain-marie food and getting loaded before you squeeze into your economy seat is your thing, then happy travels.

Free share trades?

Half a dozen apps already charge next to nothing. That stopped being a selling point years ago.

The fancy card?

Their $29-a-month Metal card is made of 18 grams of reinforced steel. I haven’t touched my debit card in years. I pay with my watch, or my phone, or it’s already saved on my computer. Though it may be a handy accessory for cocaine snorters, I guess.

Here’s the kicker, though. ING already dropped its international transaction fees, so your card works overseas without the usual slug. You’re better off than you thought. And if you’re sending money overseas, check out Wise.

My Barefoot verdict?

You’d want to be on drugs to pay a hundred bucks a month for a bank account.

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How to Get Rich With Property Investing

Scott

I want to change the off-the-plan apartment industry for the better. Over 9,000 Australian investors a year buy through groups charging $44,000 to $100,000 in hidden commissions. These groups run their own accountant, broker, researcher and financial planner in-house. Property isn’t regulated, and most clients end up with negative equity. We’re building a transparent alternative. We’re remunerated by the developer, but we are bringing in independent advisers to help people. I’d love to talk about bringing more awareness to it.

Paul from …. (name of business given, but not printed)

Hi Paul,

As a rule I bin the pitches I get. I made an exception for yours, and you’ll see why in a minute.

You’re right about the industry. We’ve all seen the property investment gurus on social media and podcasts promising to show you how to get you out of debt (by taking on more debt), save tax, and get rich ‘like they did’.

As you’ve pointed out, they’re really running a sausage factory, loading apartments with up to $100,000 in commissions … which is how they actually get rich. They rely on novice investors and ‘churn and burn’ them.

(And if one of these outfits set up a self-managed super fund for you, understand what happened: they got you to borrow inside your super to buy their overpriced apartment, locked away where you can’t easily sell it, and clipped you on the way in. That is the single most expensive mistake in this space, and thousands of Aussies have made it.)

There’s only one problem with your plan to clean up the industry:

You’re one of them.

Read your own sentence again: “We’re remunerated by the build itself.” Translation? The developer pays you. So when you sit across the table from some young couple, they’re not your client – they’re your product. The bloke building the apartment is your client, and he’s paying you to move his stock.

And now that the market is softening, developers are getting desperate. Desperate developers pay fatter commissions. Your pay rise arrives at the exact moment your buyers should be walking away.

I’m also calling bulldust on your claim of getting independent financial planners and accountants. If they really were independent, they wouldn’t recommend your properties. They’d say what I’d say:

Don’t you dare buy this overinflated piece of crap.

So why did I publish you (but not your business name?)

Because your pitch is the best warning I’ve read all year. Every reader now knows exactly what the sales script sounds like.

I want nothing to do with you.

Thank you for reading!

Scott