Hi, everyone, Welcome back to another episode of Sugar Mama's Fireplay, where we dive into everything that you need to know about for financial independence and early retirement and of course, building a strong financial future for yourself and your loved ones. I am your host financial planner, Cannah Campbell. Today we're tackling a topic that directly impacts your long term wealth goals. That is superinnuation and why you should be investing in shares for your super Now. As always, please remember that all of my content is general in nature and educationally based only, so please always bear that in mind. And if you have any questions about what you should be doing for your unique situation, that is when you go and speak to a financial planner and ask them for personal advice. All right, so let's get started now. I know that the share mark can seem incredibly intimidating, and understandably so, because headlines often screen things like Australians share market loses one hundred billion dollars in blood bath today and that's enough to make anyone, including myself, feel nervous. Right, But today I actually want to explain why despite the short term market volatility having a bias towards shares and other high growth asset classes for your superannuation is essential for long term financial security and independence. So today we're going to touch on the seven reasons why you need to be thinking about including shares in your superannuation account. So let's get started. Number one, the long term nature of super superannuation isn't a savings account. It is a long term investment portfolio designed to fund your retirement. For most Australians, retirement doesn't happen until your mid sixties, and life expectancy now stretches into the mid eighties, if not longer, and we all have the medical industry to thank for that. So that means you've got at least twenty years of retirement that you need to fund with your superannuation money, and quite possibly, looking at medical technology, probably a lot more than twenty years. So when we're talking about superannuation, we're talking about a long term game plan, long term game plan of wealth creation and ensuring financial independence where we never rely on a person or a government. And that is why shares, which have historically provided superior long term returns compared to something like cash and bonds, have got to play a key role in your superannuation investment strategy. Number two. Understanding the importance of the power of comp All right, let's break this down together. Growth assets such as shares and property are known for providing higher returns over longer periods of time. This is where the magic of compounding interests kicks in. The longer you are invested, the more your money grows, and it grows on itself. What I like to say, organically, the return you get from your shares over the decades far outweighser returns you will see from the safer, lower growth assets, or lower risk assets, or even lower volatility assets like shares, like cash or bonds. For example, ten thousand dollars invested in Australian shares in nineteen ninety four, if left alone and with all that those dividends reinvested, would be worth approximately one hundred and thirty five thousand dollars today, which has significantly performed cash and bonds even through periods of short term market volatility. The riskier nature of shares is balanced out by their long term potential, especially when dividends are reinvested, and this is the beauty of superannuation because those dividends are often reinvested because they can't be paid to you and they can't be spent until you meet a condition of release. So superranuation is a very powerful place to hold assets and allow compounding interests to work for you. Number three Managing risk with knowledge not fear. I understand shares come with risk, and it's important that you understand too that shares come with risk. We've all seen markets suddenly drop, and it's easy when this happens to quickly want to jump ship with a knee jerk reaction and sell everything and then just move into cash, which feels safe and secure for the short term. And this is a it's pretty natural reaction for some people when they're not informed, when they see things getting tough and scary. But when you understand your risk profile, you can see that this type of decision or reaction becomes one that comes with regret. This is why it is so important, because you understand risk with knowledge, not fear. Now, this is why I always talk about risk profiles. A risk profile can help you understand and identify your comfort levels when it comes to investment market volatility, and it is critical that you do a risk profile with an informed mindset. If someone who never invested before did a risk profile, they're going to come out as a very conservative investor. However, if you spend a bit of time educating yourself and understanding what shares are, what the opportunities present themselves, the importance of diversification, and then did a risk profile, I would pretty much put one hundred dollars on it that you will end up having a more aggressive risk profile, perhaps going from conservative to balance, or from balance to maybe growth or even high growth. It is essential that letting go of fear when it comes to your decisions is essential. You've got to focus and actually see that the long term opportunities come with some risk, and yes, some of that risk is actually manageable to certain degree. Shares are going to have ups and downs, but over time the returns that they generate will far outweigh those temporary setbacks. So think about it this way. If you look at your superannuation every single day, it's a coin toss as to whether you'll see good news or bad news because the market is always moving up and down every second of the day. But if you take a moment to gain perspective and say, let's just zoom out and look at your returns like I do every year or every six months, even you're going to far likely see positive growth. And that is why it is so crucial to focus on the long term horizon other than getting caught up in those daily market fluctuations. That is the white noise that can sometimes be toxic if you allow it to infiltrate into your decision making process. Number four, why should never try and time the market? It is so tempting to think that you can time the market, that you can jump out when things get bad and then perfectly time jumping back in when the market rebounds. But here is the harsh truth. It is nearly impossible to get the timing right unless you have a crystal ball. Of course, most investors who try and time the market end up missing out on the best recovery days and actually lock in their losses. Do you know someone who has, for example, sold property and sold your thinking and saying, you know, the property market is so valid, I'm selling now and I'm just going to bank this great growth in and then with a market the property market crash, She's able to buy back again. Sounds great if that happens, but has that happened. No, And sadly, some of those people who try to tie the market with property has come back to burnt them because that market pullback hasn't actually happened, and that money that they banked is actually eroding in value. They don't have the same buying power that they used to and in the meantime the property market is still growing. It is exactly the same risk with shares. And of course when you go and sell an investment, whether it be shares or property, you've got to pay capital gains tax, so you could be taking a dangerous step backwards in having to pay tax, and of course a dangerous step back in your wealth creation journey. In fact, if you were fully invested in Australian shares since nineteen ninety five, your return would have been about nine point five percent per annum. But if you missed the best ten days in the market, your return would have actually dropped to seven point five percent. You would have missed the best forty days, and that impact is a loss of three point five percent. That is the difference a few key days can make in your investment portfolio. So don't try and time the market. The best strategy is to stay invested, to ride out the downturns, and to avoid rash decisions. Overalling twenty year periods, shares have almost always outperformed cash and bonds. Even over shorter periods of like ten years, shares have done much better than the majority of the time. This makes them the ideal long term asset for superannuation when it comes to your long term goals. Number five, superannuation is a long term play. Don't try and cut it short. Finally, let's talk about when you interrupt the compounding process in your superannuation early on. If you pull out twenty thousand dollars out of your super at the age of thirty, say for an emergency expense under say financial hardship, it could reduce your superbalance by around seventy four thousand dollars by the time you reach age sixty seven. That is the power of compounding, and that is why it's so important to stay invested and not dip into your superannuation prematurely. Trust me on this. Number six. Tailor your superannuation to your life and to your risk profile. Now, I really want to emphasize that every investor is different. Everyone has different deadlines, different risk profiles and also different strategy is going on behind the scenes that a lot of people aren't preyby to unless you are their financial planer. Your superannuation strategy should reflect your unique situation, which is why I always say go and see a financial planner. And this also includes your aid, your income, your wealth, and of course your risk tolerance. But even if you have a lower risk tolerance you're a conservative investor or a balanced investor, it is still essential to have some exposure to shares and growth assets are as. These are what drive your wealth over the long run. As I explained at the beginning of this episode, superannuation is a long term investment and with that long term outlook, shares are your best investment friend when it comes to building a retirement that actually lasts and gives you that required longevity. So do not let short term volatility or scary sensationalized headlines push you into making decisions that could undermine your financial future. Number seven the value of franking credits for your superannuation investment portfolio. This would have to be I think the most important and most valuable reasons as to why you should have Australian shares in your superannuation investment portfolio. You see most Australian industrial shares pay franking credits. These franking credits are attached to the dividends. Is the passive income that your superannuation investment portfolio pays your fund and then ultimately for you for your retirement. And these franking credits can actually help you reduce your taxable income through the tax credits that have already been paid by the companies. Now what this does is, in turn, it helps reduce the amount of tax that you pay when you go to retire because under current legislation, if you are over a certain age and you're drawing an allocated pension that is your retirement income through Super, there is no tax paid, which can may mean you get a massive tax refund or you pay a lot less in tax when you go to ret time. But on top of this, there is an additional benefit of having Australian shares that pay these franking credits in your superannuation because under current legislation, the maximum income tax payable within superannuation whilst in accumulation phase is fifteen percent. And when a company pays a fully franked dividend, that means thirty percent tax has already been paid, so in fact, you're able to potentially access a refund within your superannuation, which means your superannuation investment portfolio is incredibly tax efficient in helping you build wealth and build that long term, growing passive income stream. So in turn, the tax effective value of Australian shares is incredibly efficient when it comes to you wanting to achieve a certain goal by a certain deadline. This is why I always talk about the value of Australian shares and why I love Australian shares over a property, and why I think superannuation is so incredibly sexy. So as we wrap up today's episode, I really hope that this episode has given you some valuable insights into why having a bias towards shares, in particular Australian shares for your superannuation is crucial. Remember, superannuation is a long term game plan and shares are one of the best ways to take advantage of that timeline. So what I would absolutely love for you to do right now is to jump online, have a look at your superannuation, see how much you've got, and look at the underlying investments of your superannuation. Take note as to how much of your portfolio, that is, how much, what percentage or what dollar amount you have in Australian shares. Do a risk profile see if it matches correctly and if you need to make changes, pick up the phone and call a financial planner and book in an appointment to talk about this with them. I promise you you will not regret doing this, and it is one massive step in helping make sure that you are more educated, informed, but more importantly prepared for your retirement dreams. Thank you everyone for listening to Sugar Mama's Fireplay this morning. If you enjoyed this episode, please make sure that you share it with your friends and family who could benefit from listening to this advice. And of course, don't forget to make sure you've subscribed to this show and following me on Instagram for more ideas, inspiration and motivation on achieving financial independence and empowering your financial future. Until next time, stay financially savvy and keep your financial fire burning right Chow for now

Hi, everyone, Welcome back to another episode of Sugar Mama's Fireplay, where we dive into everything that you need to know about for financial independence and early retirement and of course, building a strong financial future for yourself and your loved ones. I am your host financial planner, Cannah Campbell. Today we're tackling a topic that directly impacts your long term wealth goals. That is superinnuation and why you should be investing in shares for your super Now. As always, please remember that all of my content is general in nature and educationally based only, so please always bear that in mind. And if you have any questions about what you should be doing for your unique situation, that is when you go and speak to a financial planner and ask them for personal advice. All right, so let's get started now. I know that the share mark can seem incredibly intimidating, and understandably so, because headlines often screen things like Australians share market loses one hundred billion dollars in blood bath today and that's enough to make anyone, including myself, feel nervous. Right, But today I actually want to explain why despite the short term market volatility having a bias towards shares and other high growth asset classes for your superannuation is essential for long term financial security and independence. So today we're going to touch on the seven reasons why you need to be thinking about including shares in your superannuation account. So let's get started. Number one, the long term nature of super superannuation isn't a savings account. It is a long term investment portfolio designed to fund your retirement. For most Australians, retirement doesn't happen until your mid sixties, and life expectancy now stretches into the mid eighties, if not longer, and we all have the medical industry to thank for that. So that means you've got at least twenty years of retirement that you need to fund with your superannuation money, and quite possibly, looking at medical technology, probably a lot more than twenty years. So when we're talking about superannuation, we're talking about a long term game plan, long term game plan of wealth creation and ensuring financial independence where we never rely on a person or a government. And that is why shares, which have historically provided superior long term returns compared to something like cash and bonds, have got to play a key role in your superannuation investment strategy. Number two. Understanding the importance of the power of comp All right, let's break this down together. Growth assets such as shares and property are known for providing higher returns over longer periods of time. This is where the magic of compounding interests kicks in. The longer you are invested, the more your money grows, and it grows on itself. What I like to say, organically, the return you get from your shares over the decades far outweighser returns you will see from the safer, lower growth assets, or lower risk assets, or even lower volatility assets like shares, like cash or bonds. For example, ten thousand dollars invested in Australian shares in nineteen ninety four, if left alone and with all that those dividends reinvested, would be worth approximately one hundred and thirty five thousand dollars today, which has significantly performed cash and bonds even through periods of short term market volatility. The riskier nature of shares is balanced out by their long term potential, especially when dividends are reinvested, and this is the beauty of superannuation because those dividends are often reinvested because they can't be paid to you and they can't be spent until you meet a condition of release. So superranuation is a very powerful place to hold assets and allow compounding interests to work for you. Number three Managing risk with knowledge not fear. I understand shares come with risk, and it's important that you understand too that shares come with risk. We've all seen markets suddenly drop, and it's easy when this happens to quickly want to jump ship with a knee jerk reaction and sell everything and then just move into cash, which feels safe and secure for the short term. And this is a it's pretty natural reaction for some people when they're not informed, when they see things getting tough and scary. But when you understand your risk profile, you can see that this type of decision or reaction becomes one that comes with regret. This is why it is so important, because you understand risk with knowledge, not fear. Now, this is why I always talk about risk profiles. A risk profile can help you understand and identify your comfort levels when it comes to investment market volatility, and it is critical that you do a risk profile with an informed mindset. If someone who never invested before did a risk profile, they're going to come out as a very conservative investor. However, if you spend a bit of time educating yourself and understanding what shares are, what the opportunities present themselves, the importance of diversification, and then did a risk profile, I would pretty much put one hundred dollars on it that you will end up having a more aggressive risk profile, perhaps going from conservative to balance, or from balance to maybe growth or even high growth. It is essential that letting go of fear when it comes to your decisions is essential. You've got to focus and actually see that the long term opportunities come with some risk, and yes, some of that risk is actually manageable to certain degree. Shares are going to have ups and downs, but over time the returns that they generate will far outweigh those temporary setbacks. So think about it this way. If you look at your superannuation every single day, it's a coin toss as to whether you'll see good news or bad news because the market is always moving up and down every second of the day. But if you take a moment to gain perspective and say, let's just zoom out and look at your returns like I do every year or every six months, even you're going to far likely see positive growth. And that is why it is so crucial to focus on the long term horizon other than getting caught up in those daily market fluctuations. That is the white noise that can sometimes be toxic if you allow it to infiltrate into your decision making process. Number four, why should never try and time the market? It is so tempting to think that you can time the market, that you can jump out when things get bad and then perfectly time jumping back in when the market rebounds. But here is the harsh truth. It is nearly impossible to get the timing right unless you have a crystal ball. Of course, most investors who try and time the market end up missing out on the best recovery days and actually lock in their losses. Do you know someone who has, for example, sold property and sold your thinking and saying, you know, the property market is so valid, I'm selling now and I'm just going to bank this great growth in and then with a market the property market crash, She's able to buy back again. Sounds great if that happens, but has that happened. No, And sadly, some of those people who try to tie the market with property has come back to burnt them because that market pullback hasn't actually happened, and that money that they banked is actually eroding in value. They don't have the same buying power that they used to and in the meantime the property market is still growing. It is exactly the same risk with shares. And of course when you go and sell an investment, whether it be shares or property, you've got to pay capital gains tax, so you could be taking a dangerous step backwards in having to pay tax, and of course a dangerous step back in your wealth creation journey. In fact, if you were fully invested in Australian shares since nineteen ninety five, your return would have been about nine point five percent per annum. But if you missed the best ten days in the market, your return would have actually dropped to seven point five percent. You would have missed the best forty days, and that impact is a loss of three point five percent. That is the difference a few key days can make in your investment portfolio. So don't try and time the market. The best strategy is to stay invested, to ride out the downturns, and to avoid rash decisions. Overalling twenty year periods, shares have almost always outperformed cash and bonds. Even over shorter periods of like ten years, shares have done much better than the majority of the time. This makes them the ideal long term asset for superannuation when it comes to your long term goals. Number five, superannuation is a long term play. Don't try and cut it short. Finally, let's talk about when you interrupt the compounding process in your superannuation early on. If you pull out twenty thousand dollars out of your super at the age of thirty, say for an emergency expense under say financial hardship, it could reduce your superbalance by around seventy four thousand dollars by the time you reach age sixty seven. That is the power of compounding, and that is why it's so important to stay invested and not dip into your superannuation prematurely. Trust me on this. Number six. Tailor your superannuation to your life and to your risk profile. Now, I really want to emphasize that every investor is different. Everyone has different deadlines, different risk profiles and also different strategy is going on behind the scenes that a lot of people aren't preyby to unless you are their financial planer. Your superannuation strategy should reflect your unique situation, which is why I always say go and see a financial planner. And this also includes your aid, your income, your wealth, and of course your risk tolerance. But even if you have a lower risk tolerance you're a conservative investor or a balanced investor, it is still essential to have some exposure to shares and growth assets are as. These are what drive your wealth over the long run. As I explained at the beginning of this episode, superannuation is a long term investment and with that long term outlook, shares are your best investment friend when it comes to building a retirement that actually lasts and gives you that required longevity. So do not let short term volatility or scary sensationalized headlines push you into making decisions that could undermine your financial future. Number seven the value of franking credits for your superannuation investment portfolio. This would have to be I think the most important and most valuable reasons as to why you should have Australian shares in your superannuation investment portfolio. You see most Australian industrial shares pay franking credits. These franking credits are attached to the dividends. Is the passive income that your superannuation investment portfolio pays your fund and then ultimately for you for your retirement. And these franking credits can actually help you reduce your taxable income through the tax credits that have already been paid by the companies. Now what this does is, in turn, it helps reduce the amount of tax that you pay when you go to retire because under current legislation, if you are over a certain age and you're drawing an allocated pension that is your retirement income through Super, there is no tax paid, which can may mean you get a massive tax refund or you pay a lot less in tax when you go to ret time. But on top of this, there is an additional benefit of having Australian shares that pay these franking credits in your superannuation because under current legislation, the maximum income tax payable within superannuation whilst in accumulation phase is fifteen percent. And when a company pays a fully franked dividend, that means thirty percent tax has already been paid, so in fact, you're able to potentially access a refund within your superannuation, which means your superannuation investment portfolio is incredibly tax efficient in helping you build wealth and build that long term, growing passive income stream. So in turn, the tax effective value of Australian shares is incredibly efficient when it comes to you wanting to achieve a certain goal by a certain deadline. This is why I always talk about the value of Australian shares and why I love Australian shares over a property, and why I think superannuation is so incredibly sexy. So as we wrap up today's episode, I really hope that this episode has given you some valuable insights into why having a bias towards shares, in particular Australian shares for your superannuation is crucial. Remember, superannuation is a long term game plan and shares are one of the best ways to take advantage of that timeline. So what I would absolutely love for you to do right now is to jump online, have a look at your superannuation, see how much you've got, and look at the underlying investments of your superannuation. Take note as to how much of your portfolio, that is, how much, what percentage or what dollar amount you have in Australian shares. Do a risk profile see if it matches correctly and if you need to make changes, pick up the phone and call a financial planner and book in an appointment to talk about this with them. I promise you you will not regret doing this, and it is one massive step in helping make sure that you are more educated, informed, but more importantly prepared for your retirement dreams. Thank you everyone for listening to Sugar Mama's Fireplay this morning. If you enjoyed this episode, please make sure that you share it with your friends and family who could benefit from listening to this advice. And of course, don't forget to make sure you've subscribed to this show and following me on Instagram for more ideas, inspiration and motivation on achieving financial independence and empowering your financial future. Until next time, stay financially savvy and keep your financial fire burning right Chow for now