money-bags-carousel

SOMETHING LOST, SOMETHING FOUND

Oops. The NSW State Liberal government recently “found” an extra lazy $1 billion that has turned a deficit of $337 million to a surplus of $680 million for the state’s budget for 2011/12.

You gotta wonder about the sloppy accounting practices that led to such a massive turnaround…

You also have to be a little relieved that we were surprised on the upside rather than the downside in this instance.

It’s kind of like finding that crumpled $20 note in your jeans pocket when you sort out the washing…

Who doesn’t get a bit of a thrill when that happens?

It started me thinking about other times I have discovered money that I didn’t think I had. Unfortunately there haven’t been too many occasions like this. The one that sticks out in my mind was finding my first long-lost super account five or so years ago. Let me take you back a few years…

The year is 1992. I’m beavering away as a junior accountant in a small chartered accounting practice in Perth on a massive annual salary of $22,500 per annum. I’m getting married in November. Ex-hubby and I are looking at buying our first house for the princely sum of $146,000 (totally unrenovated house of horror as I remember it – in need of TLC in real estate agent speak).

I wear suits with shoulder pads and carry a briefcase. We use computers with DOS prompts and copy clients’ files with floppy disks inserted into gargantuan desktops. Remember those big soft paper covered disks? Ahhhh, those were the days.

Something about a superannuation system, some man comes into the office and asks us to sign a few documents, tick a few boxes, blah, blah, blah, something else about 3% moving to 9%, send forms in, promptly forget the whole thing.

Fast forward to 2006. Back at work after divorce and BIG career interruption (3 children and a move to Sydney). I open a new super account, depressed at the negligible balance.

Start receiving odd correspondence from large well-established fund back in Perth talking about an old account. My excitement mounts. I am sure I put at least $2,000 in whilst working prior to children. Surely it’s got to be at least 20 thou by now?

With shaking hands I dial the number of the firm in Perth and imagine the huge injection my new super fund will receive when I finally do all the paperwork and rollover the balance. After jumping through hoops to establish my identity, the call-centre operator clears her throat before she advises me of the account balance. The world suddenly goes silent.

“Your current account balance is $2,850.42”.

What. The. Hell.

The conversation with the customer service assistant is best forgotten but in the wash up and my ensuing detective work to find out where my dreams had all gone wrong it came down to one thing. The boxes I ticked.

Despite having what I thought was an adequate level of financial knowledge, I had blindly ticked all cash options for my fund. After taxes and fees and 15 years this is what it had all come to.

And then I got mad.

For a 24 year-old with years to go until retirement it was never the right asset allocation for me to put all my money into cash products. A more growth-oriented strategy with a tilt towards property and shares was where I should have had my money invested.

The blame game ensued. Of the fund and myself.

Why hadn’t I known what was the right strategy for a woman my age and stage of life?

It hit me then. The lack of accessible personal finance and investment education I had been exposed to at key stages in my life.

I will give points to the super funds. Over the years their websites have made big leaps in providing information on what asset classes are, what returns are expected, their characteristics and what options the fund offer to their members. Somehow this doesn’t always get through.

A bland page of information, no matter how well written and accurate, just doesn’t do the trick for a lot of us.

It’s one of the reasons I became passionate about basic investment education for young people. When all of us become exposed, as soon as we start work, to the financial investment industry through our superannuation funds, how can we NOT begin an education process on this topic for the later high school years?

It’s never too late to get a basic working understanding of this topic. It’s not about becoming an expert or walking encyclopedia. It’s about being able to have informed discussions with our partners, planners and children. When you distil it down and take out industry buzzwords and acronyms many of the principles are based on universal laws and can be explained in layman’s terms.

I know it’s not everyone’s cup of tea. Finance education, I hear you say – rather have toothpicks inserted up my fingernails, please. There is a responsibility issue here.

Education can’t protect you from the vagaries of the share market and GFC’s and Europe’s debt crisis. But you can’t turn around to your partner at 60 and say you thought they were meant to be worrying about the retirement fund because you were a bit bored with the whole thing. They may not even be there at that point!

Okay, stepping down from my soapbox now. I learnt my lesson and it’s what you take away from your mistakes that count at the end of the day.

I think about where my super is invested on a regular basis. I know what the asset allocation is of the default fund. What about you?

So, that’s the end of my sad short tale of money lost, money found. Not a billion dollars or even close. Lucky old state government, hey?

Anyone else had a surprise windfall?

 


*Jill is a qualified chartered accountant, starting her career at Arthur Andersen in Perth, Western Australia and then in London at a satellite communications company. After relocating to Sydney from Perth in 2000 and raising her children to school age, Jill worked in asset management and business development at Access Capital Advisers for three years. Jill left Access Capital Advisers in 2009 to start wisewomen, a business aimed at educating women on personal finance and investing. Jill has a Diploma in Financial Services (Financial Planning) from Kaplan Professional.

 

Follow us on

13 Comments

  • Reply November 7, 2012

    William Marshall

    So, the N.S.W. government found $1billion behind the couch! Lucky so and so’s!

  • Reply November 8, 2012

    Lindy

    You certainly got me thinking about how little I know about my own super fund. Thank you!

  • Reply November 8, 2012

    Rowena

    Outstanding Piece. Really got me thinking about myself. I really feel i can relate to your situation. Wonderfully written.

  • Reply November 13, 2012

    True Believer

    Excellent article, Jill. Couldn’t agree more that we need to know more about our superannuation (I have been guilty of this in the past as well).

    Regarding ‘lost’ money, I’d add that people should definitely check out SuperSeeker and MoneySmart online – they are free and will help you track down ‘lost’ dollars!

    SuperSeeker is on the ATO website, you just need your tax file number, name and date of birth. The MoneySmart page is with ASIC and will look for bank accounts, shares, and life insurance.

    It makes me cross to see people charging for these free services when they are so easy to use!

    http://www.ato.gov.au (search for SuperSeeker)
    http://www.moneysmart.gov.au (search for ‘unclaimed money search’.

    Good luck!

  • Reply November 13, 2012

    Rosie

    If only the financial education we had when we were at school was more interesting. We had to learn double entry book-keeping from an extremely boring man with long socks and sandals!
    I find finance and economics very interesting now I am older but still have very little understanding of how things work. So I am looking forward to more of these articles.
    On the Super side of things, I actually had to chase some up through the ATO that my old bosses had ‘accidentally’ not paid me. For two years! So that was a sort of windfall. The only other type I have received is when someone has died.
    And I wish I earned even $22,500 annually, now. Or ever! Wouldn’t know what to do with myself.
    Can’t wait for the next article. Can we ask questions? I have heaps…

  • Reply November 13, 2012

    Anon today

    I got a windfall only today! The school sent me back my $20 for the fete raffle tickets becasuse they didn’t put them in the box in time. But hey, 20 bucks is 20 bucks!

    As the wife of someone who had to go bankrupt (with me along for the ride), now we’re having to start all over again in our 40’s but with the added expense of kids – I would advise everyone to know their personal balance sheet. Get a 2nd opinion on financial advice. Don’t believe the mortgage broker (in disguise as a caring financial planner) that you can afford way more than you know you can comfortably pay off.

    Bring on the rest of the financial advice series. Looking forward to it.

  • […] SOMETHING LOST, SOMETHING FOUND […]

  • Reply November 28, 2012

    HOW TO: INVEST

    […] Something lost. Something found […]

  • […] Something lost. Something found […]

  • Reply December 21, 2012

    ENOUGH IS ENOUGH

    […] Something lost. Something found […]

  • Reply January 16, 2013

    HOLIDAY HOUSE ENVY

    […] Something lost. Something found […]

  • Reply January 30, 2013

    ARGUING ABOUT MONEY?

    […] Something Lost. Something Found […]

  • […] Something Lost. Something Found […]

Leave a Reply