Whats The Best Super fund?

Megan is totally confused. And she’s no dumb dumb either. Far from it.

Megan is not a client of mine but she’s a very good friend who I’ve known for years. She also completed a Master’s Degree in Applied Finance about eighteen months ago as well.

But right now, her finance degree means diddly squat. She’s so confused.

Here’s why.

Megan recently changed jobs and as part of her induction, her new employer invited someone into the office to tell her why, ‘…their super fund is the best’. Meaning, you should roll yours over to ours.

The suit from the super fund showed her a heap of charts and graphs plus a mile long of historical returns. She openly admits it was a very impressive presentation, but she still wasn’t sure if she should change super funds.

That night, and for the next week, she spent hours researching ‘the best super fund’ and comparing it to the one she was already in…and very happy with.

Eventually she called and asked if we could catch up for lunch to help clear the fog.

It’s a stunning Saturday afternoon at her favourite hang-out, and by the time we get through the latest about some guy she really likes at work, plus how she found the most amaaaaazing pair of shoes on sale that morning, she’s worried we’ve run out of time to ‘talk’.

I assure her we haven’t. (But I don’t let the opportunity slide either. I jokingly tell her I was just about to order dinner. I’m not kidding, this girl could talk for Australia!)

Megan has a great sense of humour and rolls with the joke, but the laughter doesn’t last long. She is so frustrated and confused in her search for the best super fund.

And she doesn’t hold back either…

“Can I tell you whats so annoying about your industry! Its so hard to compare apples with apples because of the fine print and lack of transparency…and…and…and…”.

Megan badly needed to vent, she was so frustrated. And who could blame her.

I see the same thing every week. An endless flow of horse manure.

But every industry has its fair share of spruikers, it’s just that ours seems to have more stuffed shirts and empty handshakes than most.

Eventually, she got to the question that had been bugging the hell out of her for weeks…

“Can you PLEASE tell me what’s the best super fund because everyone seems to have a different opinion?”

My response was simple. “There is no best super fund. It’s a myth”.

She was shocked, and then became even more confused.

Megan knows I love to keep things simple, so I asked her to give me the shoe box (without the shoes).

Now Megs, it’s as simple as this. I want you to imagine this empty shoe box is a ‘paddock’.

(She immediately rolls her eyes and shakes her head. But at least she’s smiling again)

That’s all your super is, it’s just a paddock with a maximum tax rate of 15%. The only difference is what you put in that paddock.

“Ok, so what do I put in this paddock?” she asks

“Cows”

“WHAT?! Are you being smart?”

“Not at all.”

I then explained my ‘Milk and Muscle Theory’ and as soon as she saw the scribble (on the back of her shoe box), she couldn’t believe how simple it made investing, especially inside super.

And for the first time in weeks the fog finally lifted on her super. Best of all, she didn’t need to change super funds.

Next week I’ll show you the second part of my ‘Paddocks and Cows’ approach to super and what I showed Megan.

It’s a ripper. No bull.

Have a great weekend!

Adam