[Script Info]
Title: 
[Events]
Format: Layer, Start, End, Style, Name, MarginL, MarginR, MarginV, Effect, Text
Dialogue: 0,0:00:03.03,0:00:06.44,Default,,0000,0000,0000,,Hi everyone, my name is Brad Zaknich from\NGESB, and I'd like to thank you very much
Dialogue: 0,0:00:06.49,0:00:10.18,Default,,0000,0000,0000,,for logging onto today's recorded webinar,\Nso it's not a live one today,
Dialogue: 0,0:00:10.18,0:00:14.15,Default,,0000,0000,0000,,it's recorded and it's about investing\Nin super 101. So we're gonna go through
Dialogue: 0,0:00:14.100,0:00:18.82,Default,,0000,0000,0000,,the ideas of investing through \Nsuperannuation compared to investing
Dialogue: 0,0:00:18.82,0:00:22.82,Default,,0000,0000,0000,,in other formats. So, for those who\Nhaven't used webinars before, very simple
Dialogue: 0,0:00:22.82,0:00:26.80,Default,,0000,0000,0000,,technology, sit back and relax. Some of \Nthe normal interactive opportunities we
Dialogue: 0,0:00:26.80,0:00:30.94,Default,,0000,0000,0000,,have with webinars has been turned off\Nfor today's session, obviously things like
Dialogue: 0,0:00:30.94,0:00:34.72,Default,,0000,0000,0000,,typing in questions and clicking send, \Nyou can't do that today because there's
Dialogue: 0,0:00:34.72,0:00:38.68,Default,,0000,0000,0000,,no-one to reply to them. So what we'll do \Nis get through some of the housekeeping.
Dialogue: 0,0:00:38.68,0:00:42.00,Default,,0000,0000,0000,,What we're showing you here is what you\Nalready would have received, well, in fact
Dialogue: 0,0:00:42.00,0:00:46.51,Default,,0000,0000,0000,,what you're going to be receiving, is a \Nwebinar survey follow-up email, we do
Dialogue: 0,0:00:46.51,0:00:50.28,Default,,0000,0000,0000,,still love to get feedback, even with \Nrecorded webinars, so if you wouldn't mind
Dialogue: 0,0:00:50.28,0:00:53.91,Default,,0000,0000,0000,,setting a few moments it takes to complete\Nthat, that'd be greatly appreciated.
Dialogue: 0,0:00:53.91,0:00:57.32,Default,,0000,0000,0000,,The webinar, like I said, is being \Nrecorded, and you'll be able to sit back,
Dialogue: 0,0:00:57.32,0:01:02.35,Default,,0000,0000,0000,,watch it at your own leisure. You can move\Nforward, you can go back in the slides,
Dialogue: 0,0:01:02.35,0:01:05.44,Default,,0000,0000,0000,,and you can watch it as many times as you\Nlike, and from my understanding, this
Dialogue: 0,0:01:05.44,0:01:08.92,Default,,0000,0000,0000,,webinar will be staying live on the GESB \Nwebsite, so probably around the end of
Dialogue: 0,0:01:08.92,0:01:13.58,Default,,0000,0000,0000,,the financial year, at which point we'll\Nmost likely get a new presentation up.
Dialogue: 0,0:01:13.58,0:01:16.95,Default,,0000,0000,0000,,Now, I'd first love to show my respect\Nand acknowledge the traditional custodians
Dialogue: 0,0:01:16.95,0:01:21.65,Default,,0000,0000,0000,,of this land, of Elders past, present and\Nemerging, on which this event takes place.
Dialogue: 0,0:01:21.65,0:01:25.06,Default,,0000,0000,0000,,And then you've got the all-important \Ndisclaimer. When talking about
Dialogue: 0,0:01:25.06,0:01:29.77,Default,,0000,0000,0000,,superannuation, investing, money, finance,\Nit's important that you understand that
Dialogue: 0,0:01:29.77,0:01:33.34,Default,,0000,0000,0000,,we're not giving you personalised\Nfinancial advice today. My job today is to
Dialogue: 0,0:01:33.34,0:01:36.71,Default,,0000,0000,0000,,provide you with information, explain \Nthings, explain how things work.
Dialogue: 0,0:01:36.71,0:01:40.54,Default,,0000,0000,0000,,It's not to get you to make a decision\Nbased on what I'm saying. So if you do
Dialogue: 0,0:01:40.54,0:01:43.92,Default,,0000,0000,0000,,need personalised financial advice, \Nyou'll need to go elsewhere to get that,
Dialogue: 0,0:01:43.92,0:01:49.01,Default,,0000,0000,0000,,as GESB only provides you general advice.\NNow in today's session there is a lot to
Dialogue: 0,0:01:49.01,0:01:52.06,Default,,0000,0000,0000,,get through, some of which might be\Nconcepts that you're familiar with,
Dialogue: 0,0:01:52.06,0:01:55.27,Default,,0000,0000,0000,,and some maybe not. So in this session \Nwe're gonna talk about the basics of
Dialogue: 0,0:01:55.27,0:01:58.59,Default,,0000,0000,0000,,investing, and we're gonna talk about \Nthings like income tax, and how that
Dialogue: 0,0:01:58.59,0:02:03.82,Default,,0000,0000,0000,,impacts investing, budgeting, where to use\Nyour money, borrowing, and debt.
Dialogue: 0,0:02:03.82,0:02:07.18,Default,,0000,0000,0000,,Also going to talk about with investment\Nconcepts, the idea of compounding
Dialogue: 0,0:02:07.18,0:02:12.10,Default,,0000,0000,0000,,interest, the value of superannuation, \Nunderstanding the different asset classes
Dialogue: 0,0:02:12.10,0:02:15.100,Default,,0000,0000,0000,,that exist within super, and what \Ninvestment options are available.
Dialogue: 0,0:02:15.100,0:02:19.75,Default,,0000,0000,0000,,Now hopefully you all know who GESB is,\NI work for GESB, GESB is a state
Dialogue: 0,0:02:19.75,0:02:23.04,Default,,0000,0000,0000,,government department, and it just stands\Nfor Government Employee Superannuation
Dialogue: 0,0:02:23.04,0:02:26.82,Default,,0000,0000,0000,,Board. Now we've been around for over\N85 years, we've grown over $42 billion
Dialogue: 0,0:02:26.82,0:02:31.60,Default,,0000,0000,0000,,in funds under management as of 31st \NDecember 2024, and GESB, being a
Dialogue: 0,0:02:31.60,0:02:35.10,Default,,0000,0000,0000,,government department, we're a\Nnot-for-profit organisation.
Dialogue: 0,0:02:35.10,0:02:39.66,Default,,0000,0000,0000,,So the only fees we collect from you, \Nthrough your super, through your insurances
Dialogue: 0,0:02:39.66,0:02:43.26,Default,,0000,0000,0000,,are to run the fund, we are \Nnot-for-profit. And our returns are
Dialogue: 0,0:02:43.26,0:02:45.84,Default,,0000,0000,0000,,competitive and long-term.
Dialogue: 0,0:02:45.84,0:02:48.95,Default,,0000,0000,0000,,In regards to GESB's product structure,\Npeople often get a little confused,
Dialogue: 0,0:02:48.95,0:02:52.53,Default,,0000,0000,0000,,but it's quite simple. GESB at the top\Nof the tree there stands for Government
Dialogue: 0,0:02:52.53,0:02:55.96,Default,,0000,0000,0000,,Employee Superannuation Board. Below that\Nare the different schemes that we
Dialogue: 0,0:02:55.96,0:02:59.38,Default,,0000,0000,0000,,administer. Now we're got some old \Nlegacy schemes like the Pension scheme
Dialogue: 0,0:02:59.38,0:03:02.19,Default,,0000,0000,0000,,and the Gold State Super scheme,\Nwe're not going to be talking about
Dialogue: 0,0:03:02.19,0:03:06.57,Default,,0000,0000,0000,,those at all today, okay, they don't sit\Nwithin the bounds of today's presentation.
Dialogue: 0,0:03:06.57,0:03:10.23,Default,,0000,0000,0000,,We're predominantly going to be talking\Nabout superannuation, that are in the
Dialogue: 0,0:03:10.23,0:03:15.10,Default,,0000,0000,0000,,accumulation phase, and are accumulation\Naccounts, so West State Super, GESB Super,
Dialogue: 0,0:03:15.10,0:03:20.11,Default,,0000,0000,0000,,and some of the other invest, general\Nsuper funds that work in a similar fashion.
Dialogue: 0,0:03:20.11,0:03:24.15,Default,,0000,0000,0000,,When we speak about stuff that is general,\Nsuperannuation, I'll make that very
Dialogue: 0,0:03:24.15,0:03:27.79,Default,,0000,0000,0000,,well-known. When we're talking about \Nanything that might be GESB specific,
Dialogue: 0,0:03:27.79,0:03:31.36,Default,,0000,0000,0000,,I'll also make that well-known. What we're\Nnot going to talk about in great detail
Dialogue: 0,0:03:31.36,0:03:35.100,Default,,0000,0000,0000,,today, or if at all, are the allocated \Npensions. They are the retired products
Dialogue: 0,0:03:35.100,0:03:38.60,Default,,0000,0000,0000,,that most people use to draw down their\Nretirement savings.
Dialogue: 0,0:03:38.60,0:03:41.84,Default,,0000,0000,0000,,Well let's quickly talk about West State\Nand GESB Super because there are some
Dialogue: 0,0:03:41.84,0:03:45.83,Default,,0000,0000,0000,,differences between the two of them, \Nand you need to be aware. So, West State
Dialogue: 0,0:03:45.83,0:03:51.12,Default,,0000,0000,0000,,Super was the default super fund for \NWA State Public Servants who commenced
Dialogue: 0,0:03:51.12,0:03:56.96,Default,,0000,0000,0000,,working for the government prior to \N15 April 2007. The reason that is
Dialogue: 0,0:03:56.96,0:04:01.97,Default,,0000,0000,0000,,important is that after April 2007, new\Nemployees to the public sector might have
Dialogue: 0,0:04:01.97,0:04:07.54,Default,,0000,0000,0000,,had a GESB Super account open, or perhaps\Nsome other super fund, Hesta, Australian Super,
Dialogue: 0,0:04:07.54,0:04:11.01,Default,,0000,0000,0000,,Hostplus, something like that. The reason\Nit's important to know, is that most
Dialogue: 0,0:04:11.01,0:04:15.56,Default,,0000,0000,0000,,Australian funds like GESB Super, and most\Nother funds, are considered to be taxed
Dialogue: 0,0:04:15.56,0:04:21.14,Default,,0000,0000,0000,,super schemes. Why is this important?\NThe government allows super contributions
Dialogue: 0,0:04:21.14,0:04:25.65,Default,,0000,0000,0000,,to be contributed at a lower rate of tax\Nthan your normal pay. We need to remember
Dialogue: 0,0:04:25.65,0:04:29.70,Default,,0000,0000,0000,,that super comes under the tax regime, \Nand GESB super, like most Australian funds
Dialogue: 0,0:04:29.70,0:04:33.86,Default,,0000,0000,0000,,is a tax scheme and that simply means\Nwhen your employer puts money into your
Dialogue: 0,0:04:33.86,0:04:39.20,Default,,0000,0000,0000,,super fund, through your employers' 11.5%\Nsuper guarantee, or you put extra money in
Dialogue: 0,0:04:39.20,0:04:43.32,Default,,0000,0000,0000,,through your payroll process called \Nsalary sacrifice. Those contributions are
Dialogue: 0,0:04:43.32,0:04:47.70,Default,,0000,0000,0000,,only taxed at 15%, compared to \Nyour normal tax rates through your income.
Dialogue: 0,0:04:47.70,0:04:51.19,Default,,0000,0000,0000,,But it happens on the way into your \Naccount, and while your money's still
Dialogue: 0,0:04:51.19,0:04:55.78,Default,,0000,0000,0000,,invested. If however you've got a West\NState Super account, your money's are
Dialogue: 0,0:04:55.78,0:04:59.56,Default,,0000,0000,0000,,not taxed on the way in, because it's \Ncalled an 'untaxed super scheme'.
Dialogue: 0,0:04:59.56,0:05:03.25,Default,,0000,0000,0000,,So the money's from your employers'\Ncontributions and any salary sacrifice are
Dialogue: 0,0:05:03.25,0:05:08.09,Default,,0000,0000,0000,,not taxed on the way into your account so\Nthe full contribution hits your account.
Dialogue: 0,0:05:08.09,0:05:12.89,Default,,0000,0000,0000,,Any investment earnings or growth in your\Nfund would normally be taxed at 15% in
Dialogue: 0,0:05:12.89,0:05:17.44,Default,,0000,0000,0000,,a regular fund, they are not taxed in \NWest State Super whilst the money remains
Dialogue: 0,0:05:17.44,0:05:21.07,Default,,0000,0000,0000,,in West State Super, but what happens\Nhowever is when you take your money
Dialogue: 0,0:05:21.07,0:05:24.62,Default,,0000,0000,0000,,out of the West State scheme, that is \Nwhen the 15% tax gets applied.
Dialogue: 0,0:05:24.62,0:05:27.84,Default,,0000,0000,0000,,So it's important that you understand the\Ndifference, and there are some other
Dialogue: 0,0:05:27.84,0:05:31.42,Default,,0000,0000,0000,,differences to talk about in a little\Nwhile as well.
Dialogue: 0,0:05:31.42,0:05:35.62,Default,,0000,0000,0000,,Now, when we talk about tax, you need\Nto remember as well that the way the
Dialogue: 0,0:05:35.62,0:05:39.77,Default,,0000,0000,0000,,Australian tax system works is relative to\Nyour income, is the more income that
Dialogue: 0,0:05:39.77,0:05:46.66,Default,,0000,0000,0000,,you earn, the more tax you generally pay.\NSo up to the first $18,200 you earn in
Dialogue: 0,0:05:46.66,0:05:51.51,Default,,0000,0000,0000,,earnings through your salary, through your\Nincome, there is no tax applicable to that
Dialogue: 0,0:05:51.51,0:05:58.21,Default,,0000,0000,0000,,income for most Australians. But once your\Nsalary gets above $18,201, up to $45,000,
Dialogue: 0,0:05:58.21,0:06:02.62,Default,,0000,0000,0000,,I shouldn't say salary, I should say\Nincome, in that bracket your income is
Dialogue: 0,0:06:02.62,0:06:12.09,Default,,0000,0000,0000,,taxed at 16%, okay, for every dollar over \N$18,201, up to $45,000.
Dialogue: 0,0:06:12.09,0:06:18.30,Default,,0000,0000,0000,,Then, if you're earning over $45,001 per\Nyear, the earnings between $45,001 and
Dialogue: 0,0:06:18.30,0:06:24.44,Default,,0000,0000,0000,,$135,00, that portion alone is taxed at \N30%. So people often think 'well I'm
Dialogue: 0,0:06:24.44,0:06:29.82,Default,,0000,0000,0000,,earning over $45 grand a year, I must be\Npaying 30% tax.' Yes, but only on the money
Dialogue: 0,0:06:29.82,0:06:35.26,Default,,0000,0000,0000,,you're earning, above $45,000. And as your\Nsalary goes into the new higher brackets,
Dialogue: 0,0:06:35.26,0:06:40.96,Default,,0000,0000,0000,,you pay more tax on the extra earnings. \NNow, as I said earlier, money's going into
Dialogue: 0,0:06:40.96,0:06:44.74,Default,,0000,0000,0000,,superannuation from your employer's \Ncontributions, and through the process
Dialogue: 0,0:06:44.74,0:06:50.92,Default,,0000,0000,0000,,called salary sacrifice. They are not \Ntaxed at your marginal, personal tax rate.
Dialogue: 0,0:06:50.92,0:06:56.09,Default,,0000,0000,0000,,They are instead taxed at 15%. So when you\Ntalk about that, you can see that money's
Dialogue: 0,0:06:56.09,0:07:00.98,Default,,0000,0000,0000,,being earned over 45 grand are normally \Ntaxed at 30%, money going into your super
Dialogue: 0,0:07:00.98,0:07:05.58,Default,,0000,0000,0000,,are only going to be taxed at 15% maximum. \NThat is the benefit of superannuation,
Dialogue: 0,0:07:05.58,0:07:09.99,Default,,0000,0000,0000,,so let's go through this. Let's start\Ntalking about investing money, finances,
Dialogue: 0,0:07:09.99,0:07:13.68,Default,,0000,0000,0000,,all those sort of things, and first thing\Nwhen I talk about this is the basics of
Dialogue: 0,0:07:13.68,0:07:15.87,Default,,0000,0000,0000,,investing and knowing where your money\Ncomes from.
Dialogue: 0,0:07:15.87,0:07:19.70,Default,,0000,0000,0000,,So knowing where your money goes is \Nextremely important, being able to track
Dialogue: 0,0:07:19.70,0:07:23.70,Default,,0000,0000,0000,,your spending is an extremely important\Npart of looking after your money.
Dialogue: 0,0:07:23.70,0:07:27.80,Default,,0000,0000,0000,,Planning your goals, whether they be\Nshort-term, medium-term, or long-term,
Dialogue: 0,0:07:27.80,0:07:31.38,Default,,0000,0000,0000,,basics of knowing where your money comes\Nfrom, and what you're gonna spend it on.
Dialogue: 0,0:07:31.38,0:07:35.18,Default,,0000,0000,0000,,But also being a smart borrower. There's \Nnothing wrong with borrowing money,
Dialogue: 0,0:07:35.18,0:07:39.18,Default,,0000,0000,0000,,but some would argue, borrowing money to\Npurchase something that is declining in
Dialogue: 0,0:07:39.18,0:07:43.53,Default,,0000,0000,0000,,value may not be a smart borrow, but\Nthat's up to the individual to decide how
Dialogue: 0,0:07:43.53,0:07:47.01,Default,,0000,0000,0000,,they want to do that. Also understanding\Ncompounding interest.
Dialogue: 0,0:07:47.01,0:07:51.87,Default,,0000,0000,0000,,Interest earnt, people understand that \Nmaybe I'm making, for example, a 7%
Dialogue: 0,0:07:51.87,0:07:55.34,Default,,0000,0000,0000,,return on my money, but when you \Nunderstand that compounding interest is
Dialogue: 0,0:07:55.34,0:07:59.16,Default,,0000,0000,0000,,interest on top of interest on top of \Ninterest, that's extremely powerful.
Dialogue: 0,0:07:59.16,0:08:02.71,Default,,0000,0000,0000,,Albert Einstein once said 'compound \Ninterest is the eighth wonder of the
Dialogue: 0,0:08:02.71,0:08:08.47,Default,,0000,0000,0000,,world, he who understands it, earns it. \NHe who doesn't, pays it.' Something to
Dialogue: 0,0:08:08.47,0:08:11.73,Default,,0000,0000,0000,,think about there. Well let's firstly talk\Nabout budgeting.
Dialogue: 0,0:08:11.73,0:08:15.66,Default,,0000,0000,0000,,So there is a concept called the \N'bucketing approach', cause when we talk
Dialogue: 0,0:08:15.66,0:08:18.45,Default,,0000,0000,0000,,about budgeting, people get quite \Nconcerned and they think very heavily
Dialogue: 0,0:08:18.45,0:08:22.80,Default,,0000,0000,0000,,about every cent that this, and every \Nindividual item, and that is fair enough.
Dialogue: 0,0:08:22.80,0:08:26.76,Default,,0000,0000,0000,,But if you simplify things in budgeting\Ninto a simpler approach, it might be as
Dialogue: 0,0:08:26.76,0:08:31.65,Default,,0000,0000,0000,,simple as dividing your income into three\Nbuckets, or three aspects of your income.
Dialogue: 0,0:08:31.65,0:08:36.64,Default,,0000,0000,0000,,And you might allocate, for example, 50% \Nof your income to your needs, so for
Dialogue: 0,0:08:36.64,0:08:40.45,Default,,0000,0000,0000,,example your home loan, your rent,\Ngroceries, utilities and your insurances.
Dialogue: 0,0:08:40.45,0:08:44.40,Default,,0000,0000,0000,,So 50% is just a concept, you might have\Nmore than that, you might have less,
Dialogue: 0,0:08:44.40,0:08:48.50,Default,,0000,0000,0000,,but when you identify an amount of\Nmoney, that is used for your needs, set
Dialogue: 0,0:08:48.50,0:08:51.42,Default,,0000,0000,0000,,that money aside and you know that your\Nneeds are covered.
Dialogue: 0,0:08:51.42,0:08:55.15,Default,,0000,0000,0000,,And then you might have your wants, and\Nyou might decide to allocate maybe 30%
Dialogue: 0,0:08:55.15,0:08:59.20,Default,,0000,0000,0000,,of your income to your wants. And they can\Nbe things like your, upgrading needs,
Dialogue: 0,0:08:59.20,0:09:03.60,Default,,0000,0000,0000,,money's for evenings out, hobbies, \Nsporting events, holidays, but upgrading
Dialogue: 0,0:09:03.60,0:09:07.97,Default,,0000,0000,0000,,needs we might talk about maintenance\Non your home, new cars, things like that.
Dialogue: 0,0:09:07.97,0:09:12.85,Default,,0000,0000,0000,,And then you might decide to allocate \N20% of your income towards savings.
Dialogue: 0,0:09:12.85,0:09:17.24,Default,,0000,0000,0000,,And that might be an emergency fund for\Nwhen things go wrong, or maybe long-term
Dialogue: 0,0:09:17.24,0:09:21.35,Default,,0000,0000,0000,,savings for things off in the future, \Nthat might include other investments like
Dialogue: 0,0:09:21.35,0:09:26.52,Default,,0000,0000,0000,,superannuation, shares, property, but it \Nalso might include the overpayment of your
Dialogue: 0,0:09:26.52,0:09:31.41,Default,,0000,0000,0000,,debt, so paying extra money to pay off\Nloans might be considered to be savings.
Dialogue: 0,0:09:31.41,0:09:36.47,Default,,0000,0000,0000,,And when you break it down into 50%, 30% \Nand 20%, it's a very reasonable starting
Dialogue: 0,0:09:36.47,0:09:41.07,Default,,0000,0000,0000,,point, you might decide to put more money\Ninto savings, less into wants, but by
Dialogue: 0,0:09:41.07,0:09:45.97,Default,,0000,0000,0000,,having a structure, makes it easier to \Nstick to that structure, and identify what
Dialogue: 0,0:09:45.97,0:09:48.02,Default,,0000,0000,0000,,you're going to be putting your money\Ninto.
Dialogue: 0,0:09:48.02,0:09:53.28,Default,,0000,0000,0000,,Let's now talk about being a smart \Nborrower. Borrowing money is for most
Dialogue: 0,0:09:53.28,0:09:59.45,Default,,0000,0000,0000,,people, a necessity in life, for certain\Nthings, but not all debt is equal, it will
Dialogue: 0,0:09:59.45,0:10:02.83,Default,,0000,0000,0000,,depend on the purpose of the loan, \Nit will depend on the interest rates
Dialogue: 0,0:10:02.83,0:10:06.38,Default,,0000,0000,0000,,you're paying, how often and how much\Nyour payments are going to be, and it
Dialogue: 0,0:10:06.38,0:10:10.76,Default,,0000,0000,0000,,should be consolidating different debts,\Nor different loans, into one.
Dialogue: 0,0:10:10.76,0:10:15.49,Default,,0000,0000,0000,,So for example, when they say 'not all\Ndebt is equal', if you're borrowing money
Dialogue: 0,0:10:15.49,0:10:18.98,Default,,0000,0000,0000,,from a bank or institution, as an \Nexample, and maybe you're borrowing it
Dialogue: 0,0:10:18.98,0:10:24.27,Default,,0000,0000,0000,,and you're having to pay, 5% interest\Nor 6% interest to borrow that money,
Dialogue: 0,0:10:24.27,0:10:27.79,Default,,0000,0000,0000,,but maybe you're borrowing that money\Nto purchase something that's going to
Dialogue: 0,0:10:27.79,0:10:32.06,Default,,0000,0000,0000,,increase in value by 7, 8, 9 or 10% \Nper year, that might be said as being
Dialogue: 0,0:10:32.06,0:10:36.17,Default,,0000,0000,0000,,'good debt'. Whereas 'bad debt' might be\Nbe something as simple as paying for a
Dialogue: 0,0:10:36.17,0:10:40.21,Default,,0000,0000,0000,,holiday where you don't have much to show \Nfor it at the end and you're paying extra
Dialogue: 0,0:10:40.21,0:10:44.34,Default,,0000,0000,0000,,when you get back by way of interest. \NSo understand, borrowing money is not
Dialogue: 0,0:10:44.34,0:10:49.34,Default,,0000,0000,0000,,necessarily a bad thing, but understanding\Nwhen you should, shouldn't borrow to
Dialogue: 0,0:10:49.34,0:10:51.82,Default,,0000,0000,0000,,purchase things is something\Nthat you have to decide.
Dialogue: 0,0:10:51.82,0:10:55.53,Default,,0000,0000,0000,,Now lets now talk about compounding \Ninterest, I'm gonna go through the example
Dialogue: 0,0:10:55.53,0:10:59.47,Default,,0000,0000,0000,,we quite often use. Compounding interest\Nis basically earning interest on top of
Dialogue: 0,0:10:59.47,0:11:04.24,Default,,0000,0000,0000,,previously earned interest. So let's look\Nat a case study of Jenny, who invests
Dialogue: 0,0:11:04.24,0:11:09.12,Default,,0000,0000,0000,,$10,000 over a five year period. Now she's\Ngonna, let's say in her example, she
Dialogue: 0,0:11:09.12,0:11:15.10,Default,,0000,0000,0000,,receives 5% per annum compounded interest,\Ncompounded on a monthly basis.
Dialogue: 0,0:11:15.10,0:11:21.69,Default,,0000,0000,0000,,Now, and the end of five years, her\Ninvestments actually gonna grow to $12,834.
Dialogue: 0,0:11:21.69,0:11:27.48,Default,,0000,0000,0000,,She's not just earning 5% on $10,000, \Nso let's see how this works.
Dialogue: 0,0:11:27.48,0:11:33.44,Default,,0000,0000,0000,,If she invests $10,000 at the start of \Nyear 1, by compounding interest at 5%
Dialogue: 0,0:11:33.44,0:11:38.48,Default,,0000,0000,0000,,per annum monthly, she's doesn't end up\Nwith $500, which would be if she
Dialogue: 0,0:11:38.48,0:11:43.44,Default,,0000,0000,0000,,compounded once, she ends up with $512, \Nit's actually more than 5% over the 12
Dialogue: 0,0:11:43.44,0:11:47.24,Default,,0000,0000,0000,,months because it's been compounded \Nmonthly. So at the beginning of the next
Dialogue: 0,0:11:47.24,0:11:52.36,Default,,0000,0000,0000,,year she's got $512, which she earns 5% \Ninterest compounded monthly, for the next
Dialogue: 0,0:11:52.36,0:11:58.24,Default,,0000,0000,0000,,12 months, she accumulates $538. \NEnds up with $11,049, and you can see over
Dialogue: 0,0:11:58.24,0:12:06.61,Default,,0000,0000,0000,,five years, the interests that's been \Ncompounded grows, 512, 538, 565, 594, 625.
Dialogue: 0,0:12:06.61,0:12:10.27,Default,,0000,0000,0000,,So compounding interest, when you leave \Ninvestments alone, and they compound on
Dialogue: 0,0:12:10.27,0:12:14.07,Default,,0000,0000,0000,,top of each other. It's investments' \Ninterest on top of the last lot of
Dialogue: 0,0:12:14.07,0:12:18.20,Default,,0000,0000,0000,,interest returns. That's where leaving \Nthings long term can generate greater
Dialogue: 0,0:12:18.20,0:12:22.28,Default,,0000,0000,0000,,levels of interest, because it's not \Nsimple interest, it's compound interest.
Dialogue: 0,0:12:22.28,0:12:27.71,Default,,0000,0000,0000,,And that's where these slides come in,\Nexcuse me, time is money.
Dialogue: 0,0:12:29.64,0:12:35.73,Default,,0000,0000,0000,,People often talk about 'timing the market',\Nit's often more important to spend time
Dialogue: 0,0:12:35.73,0:12:40.76,Default,,0000,0000,0000,,in the market. What do we mean by that?\NWell let's say for example, you've got
Dialogue: 0,0:12:40.76,0:12:45.01,Default,,0000,0000,0000,,a 20-year-old, a 30-year-old, a 40 and a \N50-year-old, who all of a-side,
Dialogue: 0,0:12:45.01,0:12:48.96,Default,,0000,0000,0000,,with a starting balance of nothing, \Nthey want to put an extra $50 a fortnight
Dialogue: 0,0:12:48.96,0:12:52.76,Default,,0000,0000,0000,,perhaps even less, in superannuation. \NSo let's just assume this is extra money
Dialogue: 0,0:12:52.76,0:12:56.52,Default,,0000,0000,0000,,you're putting into your super, above and \Nbeyond what you might already be getting.
Dialogue: 0,0:12:56.52,0:13:00.48,Default,,0000,0000,0000,,What difference will it make by putting\N$50 a fortnight, now let's assume an
Dialogue: 0,0:13:00.48,0:13:04.95,Default,,0000,0000,0000,,annual earning rate of roughly 7.8%,\Nso you're probably in the growth plan.
Dialogue: 0,0:13:04.95,0:13:10.80,Default,,0000,0000,0000,,Now if you start when you're 20, an extra\N$50 a fortnight, taken out of the
Dialogue: 0,0:13:10.80,0:13:15.49,Default,,0000,0000,0000,,conversation inflation and things like\Nthat, when you get to 60, so after 40
Dialogue: 0,0:13:15.49,0:13:21.39,Default,,0000,0000,0000,,years, you'll have $345,758 extra sitting \Nin your account.
Dialogue: 0,0:13:21.39,0:13:26.48,Default,,0000,0000,0000,,By only putting in $50 a fortnight. \NNow if you don't start until you're 30,
Dialogue: 0,0:13:26.48,0:13:32.30,Default,,0000,0000,0000,,now I've got $154,000, you don't start\Nuntil you're 40, about $64,000,
Dialogue: 0,0:13:32.30,0:13:36.30,Default,,0000,0000,0000,,you don't start until you're 50, it's \N$21,000. Now you can see, even though
Dialogue: 0,0:13:36.30,0:13:41.03,Default,,0000,0000,0000,,they're only 10-year periods separating\Neach starting point, the amounts of
Dialogue: 0,0:13:41.03,0:13:45.34,Default,,0000,0000,0000,,difference are massive. Because the person\Nstarting making contributions earlier,
Dialogue: 0,0:13:45.34,0:13:49.29,Default,,0000,0000,0000,,is getting compounding interest every\Nmonth on top of the contributions that
Dialogue: 0,0:13:49.29,0:13:53.17,Default,,0000,0000,0000,,have already grown. And that's why the \Nbalance can be quite large, by putting in
Dialogue: 0,0:13:53.17,0:13:56.83,Default,,0000,0000,0000,,significantly small amounts of money, \Nif you start really early.
Dialogue: 0,0:13:56.83,0:14:01.19,Default,,0000,0000,0000,,Well let's now focus on that $345,000 \Nbecause we know that starting at 20,
Dialogue: 0,0:14:01.19,0:14:04.77,Default,,0000,0000,0000,,over 40 years, should generate a figure \Nthat's similar to that.
Dialogue: 0,0:14:04.77,0:14:09.80,Default,,0000,0000,0000,,But what if, you need that amount of \Nmoney, but you don't start when you're 20.
Dialogue: 0,0:14:09.80,0:14:14.17,Default,,0000,0000,0000,,Well if you don't start 'til you're 30, \Nto meet the same objective, you'll need to
Dialogue: 0,0:14:14.17,0:14:19.18,Default,,0000,0000,0000,,put in $112 a fortnight, significantly\Nmore. If you don't start 'til you're 40,
Dialogue: 0,0:14:19.18,0:14:23.23,Default,,0000,0000,0000,,now you've gotta do $270 a fortnight, \Nfor a much shorter period of time.
Dialogue: 0,0:14:23.23,0:14:27.20,Default,,0000,0000,0000,,And if you don't start 'til you're 50, \Nnow it's $807 per fortnight.
Dialogue: 0,0:14:27.20,0:14:31.51,Default,,0000,0000,0000,,So this is where compounding interest can\Nwork against you, the longer you wait to
Dialogue: 0,0:14:31.51,0:14:35.30,Default,,0000,0000,0000,,start making investments. And because\Nsuperannuation can't be accessed,
Dialogue: 0,0:14:35.30,0:14:39.31,Default,,0000,0000,0000,,generally until the age of 60 anyway, \Nfor a lot of people making extra
Dialogue: 0,0:14:39.31,0:14:43.49,Default,,0000,0000,0000,,contributions in super, the benefits of \Ncompounding interest come along anyway,
Dialogue: 0,0:14:43.49,0:14:47.19,Default,,0000,0000,0000,,because you can't get access to it. \NBut what it does say, is if you want to
Dialogue: 0,0:14:47.19,0:14:52.48,Default,,0000,0000,0000,,start growing your super, the earlier you\Nstart, generally speaking, the less amount
Dialogue: 0,0:14:52.48,0:14:55.48,Default,,0000,0000,0000,,you've gotta make as a contribution\Na fortnight.
Dialogue: 0,0:14:55.48,0:14:59.92,Default,,0000,0000,0000,,And what is the value of superannuation\Nto you? Well the value of super is this;
Dialogue: 0,0:14:59.92,0:15:06.61,Default,,0000,0000,0000,,It's a very tax-advantaged saving scheme \Nfor retirement, often more, better tax
Dialogue: 0,0:15:06.61,0:15:09.23,Default,,0000,0000,0000,,advantages than you're gonna get through\Nyour income tax rates.
Dialogue: 0,0:15:09.23,0:15:14.49,Default,,0000,0000,0000,,Why is superannuation compulsory, and it's\Nbeen compulsory since 1992, it's so that
Dialogue: 0,0:15:14.49,0:15:18.85,Default,,0000,0000,0000,,you have an alternative to, or a \Nsupplement for, the age pension.
Dialogue: 0,0:15:18.85,0:15:23.55,Default,,0000,0000,0000,,The age pension, is not going to disappear\Nanytime soon, but it is still seen as
Dialogue: 0,0:15:23.55,0:15:27.83,Default,,0000,0000,0000,,being only a safety net for retirement.\NBecause we've been getting compulsory
Dialogue: 0,0:15:27.83,0:15:30.24,Default,,0000,0000,0000,,super now since 1992.
Dialogue: 0,0:15:30.24,0:15:34.72,Default,,0000,0000,0000,,And the value of super for you might be \Nto give you the options in retirement
Dialogue: 0,0:15:34.72,0:15:40.24,Default,,0000,0000,0000,,that you might not otherwise have, by just\Nrelying on the age pension, or even just
Dialogue: 0,0:15:40.24,0:15:45.05,Default,,0000,0000,0000,,compulsory super, maybe making extra \Ncontributions, will meet your objectives,
Dialogue: 0,0:15:45.05,0:15:48.58,Default,,0000,0000,0000,,as to what your lifestyle might look like\Nin retirement.
Dialogue: 0,0:15:48.58,0:15:52.27,Default,,0000,0000,0000,,Now there are different ways of getting\Nmoney into super, and the main way is
Dialogue: 0,0:15:52.27,0:15:55.24,Default,,0000,0000,0000,,your employers' contributions. \NNow down on the left-hand side you can
Dialogue: 0,0:15:55.24,0:15:59.11,Default,,0000,0000,0000,,see, you can put money in super through \Nyour employers' contributions, through
Dialogue: 0,0:15:59.11,0:16:03.36,Default,,0000,0000,0000,,salary sacrifice through your payroll, \Nvoluntary after-tax contributions,
Dialogue: 0,0:16:03.36,0:16:07.05,Default,,0000,0000,0000,,through cheque or B-pay or even through\Nyour payroll. There are also personal
Dialogue: 0,0:16:07.05,0:16:10.20,Default,,0000,0000,0000,,deductible contributions which we're not\Ngoing to go into great detail about today,
Dialogue: 0,0:16:10.20,0:16:14.56,Default,,0000,0000,0000,,and there's also spouse contributions. \NBut across the top, there are two main
Dialogue: 0,0:16:14.56,0:16:20.27,Default,,0000,0000,0000,,forms of contributions. One is called \Nconcessional contributions, one is called
Dialogue: 0,0:16:20.27,0:16:22.02,Default,,0000,0000,0000,,non-concessional.
Dialogue: 0,0:16:22.02,0:16:26.43,Default,,0000,0000,0000,,What is the difference? The difference \Ncomes down to the name. Concessional
Dialogue: 0,0:16:26.43,0:16:31.38,Default,,0000,0000,0000,,contributions are moneys' that go into \Nyour super before you pay your income tax.
Dialogue: 0,0:16:31.38,0:16:36.86,Default,,0000,0000,0000,,So when I showed you before that for \Nmost Australians earning over $30,000 a
Dialogue: 0,0:16:36.86,0:16:41.70,Default,,0000,0000,0000,,year, most of us are paying 30% tax on a\Nfair chunk of our income.
Dialogue: 0,0:16:41.70,0:16:46.03,Default,,0000,0000,0000,,So for when you have a non-concessional\Ncontribution, that means you've earned
Dialogue: 0,0:16:46.03,0:16:51.70,Default,,0000,0000,0000,,your money, you've generally paid your \Ntax on your income, which could be 30%.
Dialogue: 0,0:16:51.70,0:16:57.62,Default,,0000,0000,0000,,So if you earn $1000, you might lose 30%\Nbeing 300, you can get $700 into your
Dialogue: 0,0:16:57.62,0:17:01.54,Default,,0000,0000,0000,,super, that would be a non-concessional\Ncontribution. But when putting money
Dialogue: 0,0:17:01.54,0:17:05.36,Default,,0000,0000,0000,,into your super as a concessional \Ncontribution, the money comes out of your
Dialogue: 0,0:17:05.36,0:17:09.78,Default,,0000,0000,0000,,income, before it gets taxed at your \Nregular tax rate and instead goes into
Dialogue: 0,0:17:09.78,0:17:15.90,Default,,0000,0000,0000,,your super and will only be taxed at 15%. \NSo you earn $1000, only to lose 15%,
Dialogue: 0,0:17:15.90,0:17:22.10,Default,,0000,0000,0000,,you're left with $850. So superannuation\Nconcessional contributions is like earning
Dialogue: 0,0:17:22.10,0:17:26.100,Default,,0000,0000,0000,,$1000 and being able to invest $850, \Nwhereas non-concessional contributions,
Dialogue: 0,0:17:26.100,0:17:30.59,Default,,0000,0000,0000,,which you can invest in anywhere, might \Notherwise be earning $1000 and only
Dialogue: 0,0:17:30.59,0:17:34.83,Default,,0000,0000,0000,,getting $700 invested. That's the benefit \Nof superannuation.
Dialogue: 0,0:17:34.83,0:17:39.36,Default,,0000,0000,0000,,And what this slide here is showing, \Nexcuse me, is normally you earn your
Dialogue: 0,0:17:39.36,0:17:44.25,Default,,0000,0000,0000,,salary, your salary gets taxed at your \Nmarginal tax rate, think 30-odd percent or
Dialogue: 0,0:17:44.25,0:17:48.05,Default,,0000,0000,0000,,possibly more, at the top end, and money\Ngoes into your bank account.
Dialogue: 0,0:17:49.69,0:17:53.34,Default,,0000,0000,0000,,Money that you can buy and invest \Nelsewhere, the interest or earnings are
Dialogue: 0,0:17:53.34,0:17:58.72,Default,,0000,0000,0000,,also taxed at your marginal tax rate. \NBut when you put money into superannuation
Dialogue: 0,0:17:58.72,0:18:03.02,Default,,0000,0000,0000,,through your salary, through salary \Nsacrifice, it'll only be taxed at 15%,
Dialogue: 0,0:18:03.02,0:18:06.82,Default,,0000,0000,0000,,either on the way into your account with \Nmost super funds like GESB, Australian
Dialogue: 0,0:18:06.82,0:18:11.78,Default,,0000,0000,0000,,Super and Hesta, or the money on the way\Nout, with West State Super, still 15%.
Dialogue: 0,0:18:11.78,0:18:18.09,Default,,0000,0000,0000,,And not just that, not only do you pay \Nonly 15% tax on the contributions, you
Dialogue: 0,0:18:18.09,0:18:22.91,Default,,0000,0000,0000,,only pay 15% tax on the investment \Nearnings, as opposed to your marginal tax
Dialogue: 0,0:18:22.91,0:18:29.66,Default,,0000,0000,0000,,rate. Now because superannuation \Nis considered to be a tax-effective savings
Dialogue: 0,0:18:29.66,0:18:33.48,Default,,0000,0000,0000,,strategy for your retirement, that's why\Nthe government's put in place, they also
Dialogue: 0,0:18:33.48,0:18:36.62,Default,,0000,0000,0000,,understand, that by saving for your \Nretirement, the government is going to
Dialogue: 0,0:18:36.62,0:18:40.32,Default,,0000,0000,0000,,receive less tax now, than if you hadn't\Nput it through your pay.
Dialogue: 0,0:18:40.32,0:18:43.58,Default,,0000,0000,0000,,That's why they limit the amount you're\Nallowed to put into your superannuation
Dialogue: 0,0:18:43.58,0:18:47.18,Default,,0000,0000,0000,,through what are called concessional \Ncontributions. Now for most Australian
Dialogue: 0,0:18:47.18,0:18:52.36,Default,,0000,0000,0000,,funds, being taxed funds, GESB, Hesta, \NAustralian Super, that sort of fund, the
Dialogue: 0,0:18:52.36,0:18:57.90,Default,,0000,0000,0000,,limitation per year is $30,000 per year. \NAnd that includes your employers super
Dialogue: 0,0:18:57.90,0:19:02.47,Default,,0000,0000,0000,,contributions, so you could already be \Ngetting 11 and a half percent in super,
Dialogue: 0,0:19:02.47,0:19:07.32,Default,,0000,0000,0000,,you're allowed to go above and beyond \Nthat up to $30,000, per year to grow your
Dialogue: 0,0:19:07.32,0:19:12.11,Default,,0000,0000,0000,,superannuation savings. If you go above\Nthat, you're not penalised as such, but
Dialogue: 0,0:19:12.11,0:19:15.44,Default,,0000,0000,0000,,the excess contributions will be taxed \Nat your marginal tax rate.
Dialogue: 0,0:19:15.44,0:19:20.06,Default,,0000,0000,0000,,Now, for those of you who might have a\NWest State Super, or indeed a Gold State
Dialogue: 0,0:19:20.06,0:19:24.92,Default,,0000,0000,0000,,Super Account those concessional \Ncontributions of an annual $30,000 limit,
Dialogue: 0,0:19:24.92,0:19:29.73,Default,,0000,0000,0000,,do not apply to you. Instead, you've got \Nwhat's called an untaxed plan cap,
Dialogue: 0,0:19:29.73,0:19:36.04,Default,,0000,0000,0000,,and as that currently stands, that is \N$1.78 million in your lifetime.
Dialogue: 0,0:19:36.04,0:19:40.04,Default,,0000,0000,0000,,And that gets indexed every year. \NSo that means, if you've got West Side
Dialogue: 0,0:19:40.04,0:19:43.55,Default,,0000,0000,0000,,Super for example, irrespective of \Nwhat your employer's putting into your
Dialogue: 0,0:19:43.55,0:19:47.66,Default,,0000,0000,0000,,employers' contributions, you can salary \Nsacrifice above and beyond that, past the
Dialogue: 0,0:19:47.66,0:19:54.25,Default,,0000,0000,0000,,$30,000 per year, up to $1.78 million over\Nyour lifetime.
Dialogue: 0,0:19:54.25,0:19:58.94,Default,,0000,0000,0000,,So that's an important consideration of\NWest State that provides benefits that may
Dialogue: 0,0:19:58.94,0:20:00.94,Default,,0000,0000,0000,,not be applicable in other super funds.
Dialogue: 0,0:20:00.94,0:20:04.85,Default,,0000,0000,0000,,However, there is one thing you need to \Nconsider. Whilst West State Super does not
Dialogue: 0,0:20:04.85,0:20:09.47,Default,,0000,0000,0000,,have an annual limitation, like every \Nother super fund, there is a correlation
Dialogue: 0,0:20:09.47,0:20:14.93,Default,,0000,0000,0000,,between West State, and other super funds.\NSo what this example here is showing is
Dialogue: 0,0:20:14.93,0:20:19.82,Default,,0000,0000,0000,,this, let's say I've got a West State Super\Naccount, but maybe I've got another tax
Dialogue: 0,0:20:19.82,0:20:24.00,Default,,0000,0000,0000,,super fund, like Hesta, or Australian \NSuper, or maybe a self-managed super
Dialogue: 0,0:20:24.00,0:20:28.24,Default,,0000,0000,0000,,fund. What this slide here is showing is, \Nif I'm putting in $20,000 per year,
Dialogue: 0,0:20:28.24,0:20:32.40,Default,,0000,0000,0000,,of concessional contributions into West \NState, that's okay, I can still put
Dialogue: 0,0:20:32.40,0:20:36.16,Default,,0000,0000,0000,,$10,000 of concessional contributions \Ninto another fund, without breaching the
Dialogue: 0,0:20:36.16,0:20:41.42,Default,,0000,0000,0000,,$30,000 cap. Now, in example two, \Nif I put in $30,000 a year into West
Dialogue: 0,0:20:41.42,0:20:46.18,Default,,0000,0000,0000,,State, that is also okay, even though the\N$30,000 limit does not apply to West State,
Dialogue: 0,0:20:46.18,0:20:51.77,Default,,0000,0000,0000,,by putting $30,000 into West State, all of\Na sudden, whatever I'm putting into West
Dialogue: 0,0:20:51.77,0:20:56.38,Default,,0000,0000,0000,,State counts against whatever I'm putting\Ninto any other Australian super fund,
Dialogue: 0,0:20:56.38,0:21:01.46,Default,,0000,0000,0000,,tax super fund. So if I'm putting $30,000 \Ninto West State through salary sacrifice,
Dialogue: 0,0:21:01.46,0:21:07.14,Default,,0000,0000,0000,,and employer contributions, at that point,\Nif any extra moneys' are going into a tax
Dialogue: 0,0:21:07.14,0:21:11.17,Default,,0000,0000,0000,,super fund, as a concessional\Ncontribution, that amount is now in breach
Dialogue: 0,0:21:11.17,0:21:17.44,Default,,0000,0000,0000,,of the concessional contributions cap. \NAnd as per example slide three, if I'm
Dialogue: 0,0:21:17.44,0:21:21.97,Default,,0000,0000,0000,,putting $50,000 into West State, that's \Nnot a problem, but it means anything going
Dialogue: 0,0:21:21.97,0:21:25.85,Default,,0000,0000,0000,,into any other fund as a concessional\Ncontribution is in breach of the
Dialogue: 0,0:21:25.85,0:21:30.20,Default,,0000,0000,0000,,concessional cap. So please be mindful \Nof that if you've got multiple super funds.
Dialogue: 0,0:21:30.20,0:21:35.51,Default,,0000,0000,0000,,Now, irrespective of which super \Nfund you've got, the non-concessional
Dialogue: 0,0:21:35.51,0:21:40.51,Default,,0000,0000,0000,,contribution cap is, for example, money I\Nmight have in the bank, money I might have
Dialogue: 0,0:21:40.51,0:21:43.53,Default,,0000,0000,0000,,already saved, money I might be getting\Nfrom an inheritance.
Dialogue: 0,0:21:43.53,0:21:47.77,Default,,0000,0000,0000,,Moneys' that I either don't need to pay \Ntax on, or I've already paid tax on.
Dialogue: 0,0:21:47.77,0:21:51.07,Default,,0000,0000,0000,,I could put that into my West State\Naccount, or GESB account or any other
Dialogue: 0,0:21:51.07,0:21:55.98,Default,,0000,0000,0000,,super fund. And the amount that you're\Nlimited to is $120,000 per year, up to
Dialogue: 0,0:21:55.98,0:22:01.27,Default,,0000,0000,0000,,the age of 75. If I happen to go over \N$120,000 per year, it's not a major
Dialogue: 0,0:22:01.27,0:22:06.76,Default,,0000,0000,0000,,problem, provided I don't put in more \Nthan $360,000 over a three-year period.
Dialogue: 0,0:22:06.76,0:22:11.45,Default,,0000,0000,0000,,So what that's saying here is, if I put \N$120,000 in this year, 120 the following
Dialogue: 0,0:22:11.45,0:22:14.56,Default,,0000,0000,0000,,year, 120 the following year, no problem.
Dialogue: 0,0:22:14.56,0:22:19.20,Default,,0000,0000,0000,,But let's say, for example, I accidentally\Nput in $150,000 this year, I don't have a
Dialogue: 0,0:22:19.20,0:22:23.14,Default,,0000,0000,0000,,problem, but what happens is for this year\Nand the next two years, the government
Dialogue: 0,0:22:23.14,0:22:26.85,Default,,0000,0000,0000,,says the most you can put in is $360,000.
Dialogue: 0,0:22:26.85,0:22:30.91,Default,,0000,0000,0000,,Now, you do not want to breach that cap\Nbecause if you do, your excess gets taxed
Dialogue: 0,0:22:30.91,0:22:34.30,Default,,0000,0000,0000,,at 47%. Now, there is something else to\Ntake into account.
Dialogue: 0,0:22:34.30,0:22:39.20,Default,,0000,0000,0000,,Whilst there is an annual limits, at a \Nthree year limit to what you can put into
Dialogue: 0,0:22:39.20,0:22:43.93,Default,,0000,0000,0000,,your super through non-concessional \Ncontributions, you can only make these
Dialogue: 0,0:22:43.93,0:22:50.19,Default,,0000,0000,0000,,contributions if your balance in super\Nis less than $1.9 million at the end of
Dialogue: 0,0:22:50.19,0:22:54.06,Default,,0000,0000,0000,,the financial year. So what I would say is\Nthis, if you're planning on making
Dialogue: 0,0:22:54.06,0:22:57.57,Default,,0000,0000,0000,,non-concessional contributions to your\Nsuper, and you've got less than
Dialogue: 0,0:22:57.57,0:23:02.34,Default,,0000,0000,0000,,$1.9 million, and you're under 75, you can\Nstill make these contributions.
Dialogue: 0,0:23:02.34,0:23:06.81,Default,,0000,0000,0000,,But as you get closer to 75 years of age, \Nplease be aware, you need to contact your
Dialogue: 0,0:23:06.81,0:23:11.59,Default,,0000,0000,0000,,super fund, 'cos once you're within three\Nyears of getting to 75, the amount you
Dialogue: 0,0:23:11.59,0:23:15.49,Default,,0000,0000,0000,,can put in, you just need to be a little\Ncareful, when using the bring forward rule
Dialogue: 0,0:23:15.49,0:23:18.71,Default,,0000,0000,0000,,because you might exceed that cap.\NSo please contact your super fund
Dialogue: 0,0:23:18.71,0:23:20.55,Default,,0000,0000,0000,,to understand how that works.
Dialogue: 0,0:23:20.55,0:23:24.85,Default,,0000,0000,0000,,Now, let's start talk about the investment\Nside of things.
Dialogue: 0,0:23:24.85,0:23:29.01,Default,,0000,0000,0000,,Investment terms and concepts, so we're\Ngoing to talk about unit prices, share
Dialogue: 0,0:23:29.01,0:23:33.13,Default,,0000,0000,0000,,prices, dividends, and liquidity, we're\Ngonna talk about asset classes, we're
Dialogue: 0,0:23:33.13,0:23:36.54,Default,,0000,0000,0000,,gonna talk about risk profile and time \Nhorizon.
Dialogue: 0,0:23:36.54,0:23:40.30,Default,,0000,0000,0000,,So what are unit prices, \Nwell unit prices are very similar to
Dialogue: 0,0:23:40.30,0:23:44.84,Default,,0000,0000,0000,,shares, so in your super, when money \Ngoes into your superannuation fund,
Dialogue: 0,0:23:44.84,0:23:47.49,Default,,0000,0000,0000,,what happens is you don't get a set level\Nof return.
Dialogue: 0,0:23:47.49,0:23:52.14,Default,,0000,0000,0000,,What actually happens is, we purchase\Ninvestments at a certain price.
Dialogue: 0,0:23:52.14,0:23:57.26,Default,,0000,0000,0000,,So if a unit is worth $1, and you put in\N$100 into your super, we buy 100
Dialogue: 0,0:23:57.26,0:23:59.58,Default,,0000,0000,0000,,investments at a dollar per investment.
Dialogue: 0,0:23:59.58,0:24:03.81,Default,,0000,0000,0000,,As the unit price goes up in value, \Nthe investments you've already got go up
Dialogue: 0,0:24:03.81,0:24:06.38,Default,,0000,0000,0000,,in value, your balance goes up.
Dialogue: 0,0:24:06.38,0:24:10.90,Default,,0000,0000,0000,,But it also means that extra money going\Ninto your super, buys less and less for
Dialogue: 0,0:24:10.90,0:24:15.06,Default,,0000,0000,0000,,your dollar 'cos the new investments you're\Nbuying are getting more expensive.
Dialogue: 0,0:24:15.06,0:24:19.44,Default,,0000,0000,0000,,Subsequently though, if unit prices drop,\Nand you're putting money into your super,
Dialogue: 0,0:24:19.44,0:24:23.33,Default,,0000,0000,0000,,you buy more for your dollar.\NSo understanding how unit prices work is
Dialogue: 0,0:24:23.33,0:24:27.13,Default,,0000,0000,0000,,extremely important with super, because \Neven when markets go down, even though
Dialogue: 0,0:24:27.13,0:24:30.82,Default,,0000,0000,0000,,your balance might fall, you actually get\Nto buy more investments for your dollar
Dialogue: 0,0:24:30.82,0:24:35.74,Default,,0000,0000,0000,,because you're getting more purchasing\Nvalue, so please understand that.
Dialogue: 0,0:24:35.74,0:24:39.47,Default,,0000,0000,0000,,Also, unit pricing provides liquidity \Nbecause it means that when you resign
Dialogue: 0,0:24:39.47,0:24:43.61,Default,,0000,0000,0000,,or retire and you want to access your\Nsuper, you don't have to sell all your
Dialogue: 0,0:24:43.61,0:24:47.49,Default,,0000,0000,0000,,superannuation investments to take some\Nmoney out. Unit pricing provides
Dialogue: 0,0:24:47.49,0:24:51.79,Default,,0000,0000,0000,,liquidity, you might decide to sell off\N$10,000 worth of investments to get the
Dialogue: 0,0:24:51.79,0:24:55.91,Default,,0000,0000,0000,,money out. Now we're going to talk about\Nasset classes shortly, we're also going to
Dialogue: 0,0:24:55.91,0:25:01.86,Default,,0000,0000,0000,,talk about risk profile, and time horizon,\Nin fact, I'll talk about time horizon now.
Dialogue: 0,0:25:01.86,0:25:07.35,Default,,0000,0000,0000,,Time horizon is, how soon until I need my\Nactual money. Why is that important?
Dialogue: 0,0:25:07.35,0:25:12.48,Default,,0000,0000,0000,,If I need my money tomorrow, from my \Nretirement savings, you may not want to
Dialogue: 0,0:25:12.48,0:25:16.62,Default,,0000,0000,0000,,have your money invested in high growth or\Nrisky investments, because if the balance
Dialogue: 0,0:25:16.62,0:25:20.98,Default,,0000,0000,0000,,you need is about what you've got now, \Nthen all of a sudden the market falls for
Dialogue: 0,0:25:20.98,0:25:24.68,Default,,0000,0000,0000,,the next 12 months, if you're invested in\Na more volatile investment type,
Dialogue: 0,0:25:24.68,0:25:28.96,Default,,0000,0000,0000,,and the market will drop, you might lose\Nsome of the value of that investment at a
Dialogue: 0,0:25:28.96,0:25:32.45,Default,,0000,0000,0000,,time when you don't have time to recover\Nthe investment losses because you're
Dialogue: 0,0:25:32.45,0:25:36.51,Default,,0000,0000,0000,,drawing down soon. However, on the\Nflipside, if you don't need your
Dialogue: 0,0:25:36.51,0:25:41.91,Default,,0000,0000,0000,,superannuation for 20 or 30 years, your \Ntime horizon is quite far off, you might
Dialogue: 0,0:25:41.91,0:25:45.82,Default,,0000,0000,0000,,decide 'well my risk profile might be a\Nlittle bit greater, which means I can
Dialogue: 0,0:25:45.82,0:25:50.40,Default,,0000,0000,0000,,afford to take on more risk, maybe I can\Nafford to take on more volatility,' because
Dialogue: 0,0:25:50.40,0:25:54.47,Default,,0000,0000,0000,,the more volatile your investments are, \Nthe most risk they take on, the more
Dialogue: 0,0:25:54.47,0:25:58.40,Default,,0000,0000,0000,,likely it is to go up, but the more likely\Nit is to experience downturns.
Dialogue: 0,0:25:58.40,0:26:03.40,Default,,0000,0000,0000,,As we all know, over the long term, more\Nvolatile investments do go up, yes they go
Dialogue: 0,0:26:03.40,0:26:07.56,Default,,0000,0000,0000,,down, but they likely recover the losses \Nin the medium-to long-term.
Dialogue: 0,0:26:07.56,0:26:12.27,Default,,0000,0000,0000,,And that's why we talk about risk in\Nsuper, super is not without risk.
Dialogue: 0,0:26:12.27,0:26:16.32,Default,,0000,0000,0000,,There's legislative risk, the risk that\Nthe government may change the rules.
Dialogue: 0,0:26:16.32,0:26:19.37,Default,,0000,0000,0000,,It has happened in the past, will likely\Nhappen in the future.
Dialogue: 0,0:26:19.37,0:26:23.94,Default,,0000,0000,0000,,But the extent to which those risks come \Nabout with legislation, often or at the
Dialogue: 0,0:26:23.94,0:26:28.05,Default,,0000,0000,0000,,top end, to reduce the amount of tax\Neffectiveness that people can get, the
Dialogue: 0,0:26:28.05,0:26:31.06,Default,,0000,0000,0000,,rules don't change that much or that often.
Dialogue: 0,0:26:31.06,0:26:36.53,Default,,0000,0000,0000,,Then we've got investment risk, the risk \Nthat your investment may not achieve
Dialogue: 0,0:26:36.53,0:26:39.58,Default,,0000,0000,0000,,your investment outcomes, that you're\Nlooking for.
Dialogue: 0,0:26:39.58,0:26:44.53,Default,,0000,0000,0000,,So understand that even though markets\Ngo up and down, okay, that is the
Dialogue: 0,0:26:44.53,0:26:48.94,Default,,0000,0000,0000,,investment risk. But avoiding risk might \Nresult in you not getting the return that
Dialogue: 0,0:26:48.94,0:26:51.56,Default,,0000,0000,0000,,you actually want, it may not give you\Nenough return.
Dialogue: 0,0:26:51.56,0:26:55.72,Default,,0000,0000,0000,,Increasing investment risk may increase\Nvolatility, how much it goes up and down,
Dialogue: 0,0:26:55.72,0:26:58.81,Default,,0000,0000,0000,,but hopefully should increase what you\Nreturn in the end.
Dialogue: 0,0:26:58.81,0:27:03.33,Default,,0000,0000,0000,,And restricted access is also a risk. \NOnly put money into superannuation
Dialogue: 0,0:27:03.33,0:27:07.26,Default,,0000,0000,0000,,you can afford to be without generally\Nuntil the age of 60, because that's when
Dialogue: 0,0:27:07.26,0:27:09.13,Default,,0000,0000,0000,,you get access to your super.
Dialogue: 0,0:27:09.13,0:27:13.64,Default,,0000,0000,0000,,So managing your investment risk through\Nthe GESB website, we have an investment
Dialogue: 0,0:27:13.64,0:27:19.86,Default,,0000,0000,0000,,tool in the GESB calculators area, there's\None that allows you, called the
Dialogue: 0,0:27:19.86,0:27:24.91,Default,,0000,0000,0000,,Investment Tool, to choose what investment\Nprofile you might want to take on.
Dialogue: 0,0:27:24.91,0:27:28.26,Default,,0000,0000,0000,,Because in your super your money gets \Ninvested in Australian shares,
Dialogue: 0,0:27:28.26,0:27:31.66,Default,,0000,0000,0000,,international shares, private equity, \Nand other investment options.
Dialogue: 0,0:27:31.66,0:27:36.32,Default,,0000,0000,0000,,Some are less, or more defensive, less\Naggressive, some are more growth-orientated
Dialogue: 0,0:27:36.32,0:27:38.96,Default,,0000,0000,0000,,providing greater levels of return over \Nthe long-term.
Dialogue: 0,0:27:38.96,0:27:43.67,Default,,0000,0000,0000,,Now, GESB takes what's called a\Nmulti-manager approach, by doing this
Dialogue: 0,0:27:43.67,0:27:47.39,Default,,0000,0000,0000,,it means we spread your money far and \Nwide, so whether you're in GESB Super,
Dialogue: 0,0:27:47.39,0:27:51.20,Default,,0000,0000,0000,,West State or one of our retirement income\Npension options, you can choose to be
Dialogue: 0,0:27:51.20,0:27:55.75,Default,,0000,0000,0000,,invested in cash, conservative, balanced,\Nsustainable balanced, growth and a range
Dialogue: 0,0:27:55.75,0:27:59.65,Default,,0000,0000,0000,,of other options. But even below that,\Nwhen you look at the actual investment
Dialogue: 0,0:27:59.65,0:28:03.98,Default,,0000,0000,0000,,managers we use, within the Australian\Nshare portfolio, we use about seven
Dialogue: 0,0:28:03.98,0:28:07.66,Default,,0000,0000,0000,,different fund managers, within the\Nproperty portfolio we use in excess of
Dialogue: 0,0:28:07.66,0:28:12.49,Default,,0000,0000,0000,,10, we do this to spread the risk far\Nand wide, which mitigates the chances of
Dialogue: 0,0:28:12.49,0:28:15.47,Default,,0000,0000,0000,,the managers making mistakes and impacting\Nyou.
Dialogue: 0,0:28:15.47,0:28:18.96,Default,,0000,0000,0000,,Because as you can see, different\Ninvestments perform differently, so what
Dialogue: 0,0:28:18.96,0:28:22.74,Default,,0000,0000,0000,,we like to do is take the risk away,\Nso you don't have to choose one investment
Dialogue: 0,0:28:22.74,0:28:27.21,Default,,0000,0000,0000,,or the other, and by taking the balanced\Napproached for a lot of people, whether
Dialogue: 0,0:28:27.21,0:28:31.38,Default,,0000,0000,0000,,it be in the growth plan, sustainable or\Nmy West State plan, what this graph is
Dialogue: 0,0:28:31.38,0:28:35.98,Default,,0000,0000,0000,,showing is how the West State Super plan\Nhas performed since 2001.
Dialogue: 0,0:28:35.98,0:28:39.74,Default,,0000,0000,0000,,Now even though a lot of you aren't in\NWest State, maybe you're in GESB Super,
Dialogue: 0,0:28:39.74,0:28:44.40,Default,,0000,0000,0000,,the reason we show West State first is \Nbecause it goes back the furthest, which
Dialogue: 0,0:28:44.40,0:28:48.64,Default,,0000,0000,0000,,allows you to see the impact of volatility\Ngrowth has had on the investment markets.
Dialogue: 0,0:28:48.64,0:28:54.35,Default,,0000,0000,0000,,And you can see, even though growth and\Nthe West State plan are the most important
Dialogue: 0,0:28:54.35,0:28:59.15,Default,,0000,0000,0000,,aggressive of the plans, that also \Nreturned the greatest investment growth.
Dialogue: 0,0:28:59.15,0:29:04.16,Default,,0000,0000,0000,,Whereas the cash plan, nice, slow and \Nsteady, doesn't perform overly well,
Dialogue: 0,0:29:04.16,0:29:06.62,Default,,0000,0000,0000,,but it also doesn't achieve negatives.
Dialogue: 0,0:29:06.62,0:29:10.44,Default,,0000,0000,0000,,Now you'll see over the last couple of \Nyears, or year or so, there's some orange
Dialogue: 0,0:29:10.44,0:29:14.30,Default,,0000,0000,0000,,line, the sustainable balanced plan, \Nit only shows a short-term because
Dialogue: 0,0:29:14.30,0:29:16.100,Default,,0000,0000,0000,,we've only had it available for about\N12 months.
Dialogue: 0,0:29:16.100,0:29:20.83,Default,,0000,0000,0000,,Now in West State Super there are five\Nready made plans to choose from,
Dialogue: 0,0:29:20.83,0:29:25.18,Default,,0000,0000,0000,,and you get to choose from cash, \Nconservative, the default plan if you've
Dialogue: 0,0:29:25.18,0:29:29.01,Default,,0000,0000,0000,,not made an option, which used to be\Ncalled the balanced plan, there's also
Dialogue: 0,0:29:29.01,0:29:32.64,Default,,0000,0000,0000,,the sustainable balanced plan as well as\Ngrowth. The growth plan is the most
Dialogue: 0,0:29:32.64,0:29:35.79,Default,,0000,0000,0000,,aggressive, the cash plan is the least\Naggressive.
Dialogue: 0,0:29:35.79,0:29:39.28,Default,,0000,0000,0000,,But you can also take the option to do\Na mix your plan.
Dialogue: 0,0:29:39.28,0:29:43.61,Default,,0000,0000,0000,,This is where you can choose the exact \Nallocation of investment types, from the
Dialogue: 0,0:29:43.61,0:29:47.16,Default,,0000,0000,0000,,five asset classes that exist, you can \Nchange it as often as you want.
Dialogue: 0,0:29:47.16,0:29:53.18,Default,,0000,0000,0000,,Now, the GESB Super. GESB Super only goes\Nback to 2007 and as you can see when it
Dialogue: 0,0:29:53.18,0:29:56.08,Default,,0000,0000,0000,,first started, that's when the global \Nfinancial crisis hit.
Dialogue: 0,0:29:56.08,0:30:00.44,Default,,0000,0000,0000,,But it still shows, that even though cash\Nhas been very steady along the middle,
Dialogue: 0,0:30:00.44,0:30:04.46,Default,,0000,0000,0000,,the other investment plans have been more\Nvolatile, but have provided greater levels
Dialogue: 0,0:30:04.46,0:30:08.41,Default,,0000,0000,0000,,of return. And you can actually plot these\Ngraphs on the GESB website through the
Dialogue: 0,0:30:08.41,0:30:12.54,Default,,0000,0000,0000,,investment centre, and you can plot the\Ncash, conservative, balanced, the default
Dialogue: 0,0:30:12.54,0:30:14.59,Default,,0000,0000,0000,,plan, sustainable and the growth.
Dialogue: 0,0:30:14.59,0:30:18.79,Default,,0000,0000,0000,,And as I said before, you can change your\Ninvestment options as often as you want.
Dialogue: 0,0:30:18.79,0:30:23.58,Default,,0000,0000,0000,,The benefit of investing through super is\Nthat firstly, it's a long-term investment
Dialogue: 0,0:30:23.58,0:30:27.24,Default,,0000,0000,0000,,for most people. It means you pick and\Nchoose, you pick a fund or a plan that
Dialogue: 0,0:30:27.24,0:30:30.96,Default,,0000,0000,0000,,suits your personality trait, you make \Nthose contributions, you can make extra
Dialogue: 0,0:30:30.96,0:30:34.58,Default,,0000,0000,0000,,contributions, and because you can't \Naccess the money generally until you're
Dialogue: 0,0:30:34.58,0:30:39.15,Default,,0000,0000,0000,,60, you get the benefit of compounding\Ninterest, without disturbing those
Dialogue: 0,0:30:39.15,0:30:41.82,Default,,0000,0000,0000,,investments. So the next steps for you.
Dialogue: 0,0:30:41.82,0:30:45.70,Default,,0000,0000,0000,,Try out investment planning tool to help\Ndetermine what investment vehicle you
Dialogue: 0,0:30:45.70,0:30:49.40,Default,,0000,0000,0000,,should be in. You might be a conservative \Nperson, that might just mean simply,
Dialogue: 0,0:30:49.40,0:30:52.09,Default,,0000,0000,0000,,you need to take a less aggressive option\Nwith your investment.
Dialogue: 0,0:30:52.09,0:30:55.68,Default,,0000,0000,0000,,However, if you understand that over the\Nlong-term, and you understand that the
Dialogue: 0,0:30:55.68,0:30:59.08,Default,,0000,0000,0000,,ups and downs with investments might\Nprovide you with greater outcomes,
Dialogue: 0,0:30:59.08,0:31:01.95,Default,,0000,0000,0000,,you might decide to go with more growth\Norientated options.
Dialogue: 0,0:31:01.95,0:31:07.78,Default,,0000,0000,0000,,You can change as your personality changes,\Nas your timeframes change for retirement.
Dialogue: 0,0:31:07.78,0:31:11.66,Default,,0000,0000,0000,,You can review your investment choice \Nthrough the member online facility,
Dialogue: 0,0:31:11.66,0:31:15.64,Default,,0000,0000,0000,,go to the GESB website, top right-hand \Ncorner you can log-on to member online,
Dialogue: 0,0:31:15.64,0:31:17.56,Default,,0000,0000,0000,,you can do it as often as you want.
Dialogue: 0,0:31:17.56,0:31:21.81,Default,,0000,0000,0000,,Also read the quarterly investment updates\Non our website, so that you get a better
Dialogue: 0,0:31:21.81,0:31:25.68,Default,,0000,0000,0000,,understanding of how investments actually\Nwork, rather than just listening to the
Dialogue: 0,0:31:25.68,0:31:30.14,Default,,0000,0000,0000,,news, rather than your sister-in-law,\Nor indeed your friends because without
Dialogue: 0,0:31:30.14,0:31:35.05,Default,,0000,0000,0000,,any disrespect intended, most of us aren't\Ninvestment gurus, we hear things through
Dialogue: 0,0:31:35.05,0:31:37.18,Default,,0000,0000,0000,,the news, we hear things through friends.
Dialogue: 0,0:31:37.18,0:31:41.35,Default,,0000,0000,0000,,Get it from the horse's mouth, read the\Nupdates, we want you to be as informed
Dialogue: 0,0:31:41.35,0:31:44.95,Default,,0000,0000,0000,,as you can and you make those key\Ndecisions. You can also try our
Dialogue: 0,0:31:44.95,0:31:49.02,Default,,0000,0000,0000,,contributions calculator, so on the GESB \Nwebsite, right-hand side roughly half-way
Dialogue: 0,0:31:49.02,0:31:52.49,Default,,0000,0000,0000,,down, there's a section called\N'calculators', within that there
Dialogue: 0,0:31:52.49,0:31:56.47,Default,,0000,0000,0000,,is the investments tool, but there are\Nalso tools about showing you how much
Dialogue: 0,0:31:56.47,0:32:00.39,Default,,0000,0000,0000,,your contributions could be into your\Nsuper, there are also calculators about
Dialogue: 0,0:32:00.39,0:32:04.55,Default,,0000,0000,0000,,the time and planning. How much difference\Nwill contributions make into your super
Dialogue: 0,0:32:04.55,0:32:05.99,Default,,0000,0000,0000,,over the long-term.
Dialogue: 0,0:32:05.99,0:32:08.31,Default,,0000,0000,0000,,Have a look at them, they're very \Nworthwhile.
Dialogue: 0,0:32:08.31,0:32:12.17,Default,,0000,0000,0000,,What should you be being next?\NWell maybe contact at GESB if you need to.
Dialogue: 0,0:32:12.17,0:32:16.20,Default,,0000,0000,0000,,Now this is a recorded session so I won't\Nbe taking any questions, but please feel
Dialogue: 0,0:32:16.20,0:32:22.77,Default,,0000,0000,0000,,free to contact at GESB on working days\NMonday to Friday between 7:30am and 5:30pm
Dialogue: 0,0:32:22.77,0:32:31.06,Default,,0000,0000,0000,,by calling 13 43 72, which just happens to\Nbe 13 GESB. So 13 43 72. You can also use
Dialogue: 0,0:32:31.06,0:32:36.92,Default,,0000,0000,0000,,the live chat on the GESB website between \Nthe hours of 7:30am and 5:15pm, or you
Dialogue: 0,0:32:36.92,0:32:42.45,Default,,0000,0000,0000,,can contact us through the website. If you\Nfound this somewhat useful, you can go
Dialogue: 0,0:32:42.45,0:32:45.97,Default,,0000,0000,0000,,back and watch this webinar at your\Nleisure, it is being recorded, and if
Dialogue: 0,0:32:45.97,0:32:50.05,Default,,0000,0000,0000,,you've got any questions, contact GESB \Ndirectly. We'll be updating this webinar
Dialogue: 0,0:32:50.05,0:32:53.86,Default,,0000,0000,0000,,probably at the beginning of the next \Nfinancial year, and there are many other
Dialogue: 0,0:32:53.86,0:32:58.06,Default,,0000,0000,0000,,webinars available on the GESB website. \NIn the meantime, my name is Brad Zaknich,
Dialogue: 0,0:32:58.06,0:33:01.78,Default,,0000,0000,0000,,thank you very much for logging in, \Nwe hope you enjoyed this recorded webinar.