- Money Morning Australia

Super Fund Results: Whoopdeedoo


Written on 05 November 2012 by Nick Hubble

Numbers don’t lie. Until an economist gets their hands on them. Then they sing any story you want them to. Here’s the latest story they’ll have you believe, from the Age:

‘Far from being squeezed, working Australians are better off than ever, the latest figures show, with lower costs from interest rates counteracting the higher costs imposed by the carbon tax.’

We’d wager that your latest figures matter more to you than economists‘. And you know whether you’re being squeezed or not better than they do. The sad thing is, it’s the people who can’t fight back that are paying for ‘working Australians’ being better off…

The Age article continues:

‘The stunningly low cost-of-living increase – half the official inflation rate – is because the Bureau of Statistics’ cost-of-living measure incorporates household mortgage interest costs, which have slid 6.7 per cent over the year to September and 2.5 per cent in the past three months. It also gives a high weight to motoring costs, which have slid 0.8 per cent in the past three months as a result of lower petrol prices.

‘[...] households for which mortgage charges and petrol prices are less important were harder hit. The Bureau of Statistics says the living costs faced by pensioners and households relying on Newstart climbed 2 per cent. The costs faced by self-funded retirees climbed 1.5 per cent.’

If you’ve given up work and rely on savings, falling interest rates are a big problem. It’s probably not the best idea to go into debt or buy a gas guzzler so that you can be in the ‘far from being squeezed’ group.

What about the retirement investments that these people made to provision for their future? How are they faring?

Nothing to Get Super Excited About

The Age reported that ‘finally, [super fund] contributors are back to the balances they held before the financial crisis.’ Whoopdeedoo.

If you’ve been reading Money Morning for a while, you’ll know we blame the central bankers for the boom and bust of the stock market. Not only are central bankers reducing income for savers, they’re playing yoyo with your shares.

By the way, the same Age article also helpfully points out that you would have been better off with a term deposit than a balanced super fund over the last 10 years. Well, it doesn’t admit that directly, but a 6.3% a year average return for the median super fund is about what you could have gotten from term deposits. Minus the worry.

If all this seems like pointless number fiddling, you’re onto something. After tax and inflation, are you really achieving much with any of these investments?

Just like anything in life, you don’t get paid for doing nothing. It just doesn’t make sense. There is one exception though. You can get paid for doing nothing if you own something that does the work for you. And pays you the income it earns.

We’ll be releasing a report on how you can build up a sizeable income for your retirement soon. In the meantime, there is another way you can go about this. One that allows you to stop caring about reports like the two from the Age we just told you about. One that puts you outside their system of measurement.

In what might be our favourite Daily Reckoning article yet, Bill Bonner outlines how to live a life that gives economists nightmares and yourself a good night’s sleep…

Nick Hubble
Editor, Money Morning

From the Port Phillip Publishing Library

Special Report: After the Bust

Daily Reckoning:
A Deflationary Conclusion to China’s Bubble

Money Morning:
How the Aussie Dollar is Caught in a Worldwide Game of Currency Chess

Pursuit of Happiness:
Political Parasites Never Die

Already a subscriber to Money Morning... or simply, just like what you're reading? Then show your support and spread the word...

Leave a Comment

Letters will be edited for clarity, punctuation, spelling and length. Abusive or off-topic comments will not be posted. We will not post all comments.

If you would prefer to email the editor, you can do so by sending an email to moneymorning@moneymorning.com.au


Comments are closed.

Categories | Investments, Market News

TESTIMONIALS

"I think you're fantastic! I love to read what you write...you're so interesting and amusing and I've learned so much" -
Money Morning reader, Chris Gadd

"You guys are brilliant. I feel more relaxed about the future than ever simply because I know what is going on rather than floundering around with smoke screens and mirrors from the government and mainstream" -
Money Morning reader, Helen Carter

"Wow what can I say? I was an economically confused moron until I read your newsletter and even though I've been a subscriber for a short period I can now see how easy it is to understand, if you use common sense and can have the spin translated into everyday language. Thanks for an entertaining read." -
Money Morning reader, John

"Keep up the good independent and well thought out articles offering a view that often debunks mainstream myths." -
Money Morning reader, Craig

"I do admire your straight talking and simple analysis of the situation, I think of you as the Jeremy Clarkson of finance." -
Money Morning reader, Jeffery

How Money Morning Can Help You Become a Smarter, Better, Investor
Diggers and Drillers – oil rush
Blue Chips
Latest Stock Market Updates
  • ^NDX4090.553-16.072 - -0.39%
  • ^FTSE6453.87+51.70 - +0.81%
  • ^AORD5431.100-2.900 - -0.05%
  • ^AXJO5447.700-4.900 - -0.09%
  • AUDUSD=X0.8799
  • USDJPY=X108.805
Resource sector leadgen
ASI – intercept banner 220
Gold Stock leadgen
NFI Megatrends – birthed stock gains
The last investment megatrend birthed stock gains of 11,095%, 20,621% and 50,760% over 20 to 40 years.

If Kris Sayce is right, gains from this next megatrend won’t just reach those heights...

They’ll SURPASS them..
To see why, click here.
Investing Success leadgen
WWD dvd

World War D was billed as ‘the biggest investment summit of the decade’

It didn’t disappoint…


Absolutely mind-blowing beyond my expectations

– D.A.C. Hall


The BEST INFORMATION available,
contrary to mainstream economic reporting.

– L. Sceresini


Exciting, dynamic, passionate, informative, challenging, so professional... Brain-stretching.

– D Finlay


Click here to watch
the brand new Highlights Reel.

Iron ore leadgen