The Source

Warwick: Yeah, certainly. So, at university I did two degrees, one in IT and one in accounting, and from there joined a large American IT company. And they did a lot of computer work for larger companies, so I naturally started with superannuation there and I spent 10 years in the corporate world.

And after 10 years I finally came to the conclusion that IT wasn't for me. So, I went out and I was able to secure a role as a corporate trainer working for another company, and then on the side started building my own MC and keynote speaking business.

And ever since then, I've been a corporate host, so I typically host larger corporate events. I've hosted events on 5 of the 7 continents, and I suspect Antarctica is not going to happen unless it's a black-tie event for penguins. But you never know your luck in the big city.

I've been very fortunate to travel the world and do some great work. Most of my work is here in Australia and I love it.

Warwick: With my first super fund, I had absolutely no idea what fund I was with. It was something that my corporate employer set up and then money just went into it.

My interactions with them were getting an annual statement that told me I had life insurance. That’s all I really cared about.

With my first wife, we had the opportunity to set up our own super fund [an SMSF], and I can’t even remember exactly what the stimulus was for that. I do know that we bought some art and a couple of other things, and we got advice to set up an SMSF.

It wasn't until we had it set up that we realised that anything you buy in the super fund, you can’t get a direct benefit from.

Whether it was bad advice, not knowing enough or being unprepared, we learned we weren't allowed to hang that piece of art in our house, which is the whole reason we bought the art in the first place.

At the end of that marriage, my wife kept the art and I just kept the rest of the super fund. So, I just kept going with my own super fund [an SMSF]. As someone who was self-employed, I wasn't contributing a lot of money to that fund, and it was just ticking away. It was OK - barely.

Warwick: Yeah. It was a financial adviser who was the key driver behind us setting up an SMSF and so upon reflection it was probably better for them than it was for us, if that makes sense?

Having set it up, we were really borderline whether we had enough money to make it worthwhile, because you sort of need a chunk of cash with all the fees and the administration that goes with it to make it worthwhile and to be quite honest, we were borderline.

But it was something that we wanted to do, because we got a bit emotional about what we could do with it. And so, we just did it.

Financially it did not turn out that well for us. It wasn't a disaster, but it was not the best thing upon reflection.

Warwick: With my new wife, we were really into property, and still are, so we bought a property in that super fund, and again didn't really do the numbers well enough. And it turned out that we needed to contribute significant amounts of money to that [SMSF] fund. Over time, it actually became quite a burden for us to contribute more money into the super fund than we really wanted to, to make sure that we had it there, so it didn't go backwards.

That property was a poor choice of property as well. And at the end, we made the decision that it was just too hard. Like I'm not a practicing accountant, I don't want to do all this. You know, it's just too hard. So we sold that property.

We incurred a loss on the property because it was a poor choice. We then shut down that super fund [SMSF].

Warwick: I think with the self-managed super funds, there were a lot of regulations and rules that I wasn't fully aware of. At the time, the person who set it up for us seemed more interested in getting paid to set up a self-managed super fund than they were looking after my interests.

And I'm not the kind of person who wants to be actively involved in my investments.

Look, time wasn't too bad because what we set up was relatively simple. I’d have a bit of a look at it on a regular basis and then the accountant would do all the work at the end of the year and then we’d get a big bill, you know?

I would look at it monthly - I'd have to just keep an eye on how the funds were flowing. And so, the time wasn't a massive aspect, but the cost was as a percentage of our fund. Because it wasn't big, the cost ended up being quite a lot. And a lot more than what I think say, a standard super fund would be.

And so that was the cost of choosing the assets that we wanted. But I don’t think the returns are as positive as they’re made out to be.

Warwick: Luckily, we have significant property investment outside of super. For us, [the SMSF] was, I suppose, part of a balanced portfolio, and that was just one of the investment elements that we had. If it was the only thing that I had, you had better believe I'd be stressed.

But the decisions were made because it was a part of a larger plan. It hurts less, shall we just say that?

At the time we made what were the best decisions we thought we could. Looking back, some of them were really bad decisions. But they seemed solid at that time, based on the information we had and the knowledge available.

And look, I ran into a bit of a problem with a bit of arrogance, you know, because I'm a trained accountant and I know things, but I ended up making poor decisions because of it. So that's on me, but I've learnt from that, and I've tried to change the decision and the deciding process. It’s like the philosopher Kierkegaard said: ‘life has to be lived forward and understood backwards’. And looking back, I don't regret going into a super fund [SMSF] - I learnt a lot.

Warwick: For me it's very hands off now. The super fund pays people who know what they're talking about, how about I let the experts do their job?

I don't go down to my local mechanic and go ‘let me fix that car for you’. So, I let the experts do their job and I’m focused on living life. I don't want to have to manage it and so it's easy, for me, hands off is the way to go because that way, I could just get on with my own stuff. I don't want to spend my day sitting in front of the computer screen trying to guess what the market's going to do.

Warwick: I had a look around at funds which gave returns I was happy with and the least sort of maintenance, and AustralianSuper was the one that came out on top for me and so ever since then, any superannuation has gone into AustralianSuper.

I remember at the time thinking I wanted someone who's big. So, you can get that economy of scale, and I want a super fund that's got good pricing and that has fees that aren’t excessive.

I also remember looking at their investment spread and some of the stuff that was written about them and thinking I would feel safe with them having my super and, it's continued to be a wise choice.

So having a super fund, a more traditional super fund, is just so much more tax effective for me and energy effective.

My super has continued to grow, even in tough times it's still done pretty well. I've been quite happy with the returns that I've got and it's quite easy to manage with the app and the online portal.

Because you just get in, do your stuff, and it's done. And so, it's been easy for me to manage. Again, I don't look at my super a great deal. Maybe once every 6 months, just to see where it's at, every year to see the statements and that's more than enough for me.

Warwick: Understand the numbers. Too often people go ‘oh it's too confusing. I'll just get my accountant to tell me, or I'll just get my financial adviser to tell me’.

If you can add to 10 and multiply a little bit, it's not hard. Take the time, make the effort. If you understood the numbers and were able to look around a little bit, it would be more helpful for you.

So just be more comfortable with the numbers. Understand what a 5% return looks like. Understand what the costs are of running your super fund both in an SMSF and also through AustralianSuper and be prepared to make those kinds of decisions mindfully. Don't be led.