05 Jul 2021

Usually our first experience with super is we get given a form on our first proper job, we sign up to whatever they give us, and then we leave it alone for about 10 years. You might even have a few super accounts floating around out there, especially if you’ve changed jobs a bunch of times early on.

What you might not know is that you can actually affect where and how your money is invested, which could affect how much you have when you’re ready to hang your boots up. With just a click of a button, you could be setting yourself up for that amazing round-the-world trip, a life of leisure, or a greener future!

But before we get into the options, here’s a quick explainer of what your super investment mix actually is.

Different financial products have different amounts of risk or volatility. Some investments, like term deposits or bonds have a set interest rate, so you know exactly what you’re getting back once your investment matures. These are considered ‘safer’, but you’re not going to be making big gains either. Other stuff like individual stocks can be riskier, because the value can go way up, or you can lose heaps of money.

Your super fund usually invests in a bunch of different stuff, so that your balance doesn’t get too knocked off course if a single company or market takes a turn for the worse. This is called diversification. 

What you can change is how aggressive or conservative you want that mix to be, and this usually has to do with your life stage. If you’re looking to retire soon (if you’re on this site and looking to retire soon, please email us and I’ll send you my Venmo), you might not want an aggressive investment mix, because if the economy crashes you might find your super fund is smaller right when you need it. 

When you’re younger, you could opt for something more aggressive because you can wait out a recession while you’re living off your wages.

If your super has an online portal, you can change your investment mix or balance there!

The three options you’ll generally see are:

  • Growth: this one is around 85% shares or property, 15% fixed interest or cash. It aims for higher average returns over the long term. Like any investment, the higher the reward, the higher the risk, so you stand to lose more in bad years than with lower risk options

  • Balanced: pretty much what it says on the tin. Around 70% shares/property, 30% in fixed interest and cash. This one looks to get moderate returns, with less risk than aggressive.

  • Conservative: this one’s about 70% in fixed interest and cash, 30% in shares and property. Compared to aggressive which is about maximising opportunity for gains, this one is all about minimising your losses, so that your funds are there when you need them.

There might also be a fourth option, usually called something like ‘ethical’ - this one is a mix customised to avoid making investments in controversial industries like fossil fuels, weapons, tobacco, gambling or companies that have been associated with human rights abuses / harmful products. 

This one doesn’t really have the same risk/reward idea behind it, but it’s definitely something to think about if you don’t want your money supporting stuff you don’t believe in.

Sure this advice won’t make you the Wolf of Wall Street overnight, but the very fact you’re thinking about this stuff puts your head and shoulders above most people when it comes to super. If you’re feeling charged and ready to see how super really works and what you can get from it, why not give our Academies a look?