How to protect your superannuation during the GFD.
Do you know what your super is invested in? If you said no, you are not alone. It seems a lot of people have no idea where their super is invested – or how much they have.
But since we are stuck in this system and our earnings get invested into super, it makes sense to take care of it and maximise our retirement savings – even if we have set ourselves up through property investing.
The GFD is looming.
About 18 months ago, Nathan started talking about the threat of a global financial depression. With liquidity becoming more and more scarce, global markets will become more and more volatile.
This could mean bad news for our super funds.
What happened in the GFC?
During the GFC of 2008 we saw institutions and major corporations go bankrupt. Many people lost 40 to 50% of their super almost overnight due to bad investments.
The same thing could happen again.
Nathan recalls recently how AMP shares went down by 25% in just one day. Imagine if your super was invested in this and you lost a good chunk of your retirement savings just like that.
Protect your superannuation.
While a lot of people don’t pay much attention to their superannuation, it pays to protect these funds. After all, the money is yours and someone else has decided to invest it in a certain way.
Nathan says it would be great if everyone was their own financial advisor and had in depth knowledge of the different economic markets. Then each person could navigate their way through the different cycles in order to come out on top.
But it ain’t like that for most people.
Exploring your options.
You don’t have to let your super get invested in whatever your fund manager decides. Most funds give you the option to choose from different risk ratings. You should be able to elect from different investment options based on your timeframe, appetite for risk and how much control you want over the investments.
It is also possible to create a self-managed super fund (SMSF) and buy different types of investments under it, such as property.
A good financial advisor can help.
Nathan can’t give financial advice when it comes to super, but he knows a good financial advisor who can.
A financial advisor can help you to assess where you are at financially in order to see how you can protect and maximise your super.
And, it is better to protect your super now before it is too late.
Have you taken action to safeguard your super? Please share your experiences in the comments section below.