BOOST MY SU­PER JUST BY SHOP­PING?

Sunday Tasmanian - - News -

YOUNG peo­ple ab­so­lutely love it, and old peo­ple are do­ing a lot of fin­ger-wav­ing about the dan­gers of get­ting hooked on the new­est fi­nan­cial drug to hit the streets.

This week the fi­nan­cial equiv­a­lent of a teacher, ASIC, busted into the school locker rooms (quick, hide the bongs!) and at­tempted to clear the air by hold­ing its first re­view into the phe­nom­e­non that is ‘ buy now pay later’, oth­er­wise known as ‘ young peo­ple’s lay-by’, oth­er­wise known (by me) as ‘fi­nan­cial weed’. Here’s some of what ASIC found: The ma­jor­ity of After­pay cus­tomers are mil­len­ni­als. One in six of them are in fi­nan­cial strife … get­ting over­drawn, de­lay­ing bills, or bor­row­ing more. And these ser­vices are hot­ter than Julie Bishop: the num­ber of trans­ac­tions has risen from 50,000 a month in April 2016 to 1.9 mil­lion in June 2018, with the col­lec­tive tab now at a whop­ping $900 mil­lion plus.

Now, un­der­stand there’s noth­ing re­ally rev­o­lu­tion­ary about After­pay — men in grey suits have been dream­ing up new ways to get peo­ple to spend money they don’t have since long be­fore Bob Mar­ley rolled his first spliff. This is just the lat­est in­car­na­tion. (Case in point: when I was at uni the bank gave me a stu­dent bank­ing pack­age that bun­dled in a credit card with a $3000 limit ‘just in case’, and ef­fec­tively trained me to see their credit limit as my money. See? Same, same but dif­fer­ent. Even the ex­cuses are sim­i­lar: “Oh, but if I pay off my credit card in the 55-day pe­riod, it’s free!”)

My opin­ion? The ac­tual terms on After­pay are not that bad. As long as you pay off your in­stal­ments on time, you won’t be charged any in­ter­est or fees. So, as far as con­sumer credit drugs go, it’s not too heavy.

Your fi­nan­cial life won’t be ru­ined by tak­ing out a few After­pay loans.

So chillax, right? Well, no. See, the rea­son I com­pare After­pay to weed is that it acts like a gate­way fi­nan­cial drug: it’s ef­fec­tively train­ing young peo­ple to rely on the bank’s money rather than bank­ing on them­selves.

Case in point: After­pay claims the av­er­age pur­chase is $150. A hun­dred and fifty clams! Se­ri­ously, if you need in­stal­ments to cover $150, you need to check your­self be­fore you wreck your­self. And, once you get hooked on spend­ing some­one else’s money, there’s ev­ery chance you might grad­u­ate to harder stuff — other mil­len­nial credit-drug deal­ers who re­ally rip you off.

Who knows? Maybe in the fu­ture we’ll have be­fore and af­ter pho­tos like they do with meth heads.

Be­fore: This is a fresh-faced Emma, aged 18, buy­ing a pair of pink pumps on After­pay.

Af­ter: This is a stressed-out Emma, aged 23, buy­ing scratchies with her Nim­ble loan.

Se­ri­ously, you’re never go­ing to win if you don’t learn to stand on your own two feet and pay your own way. And that’s why the ‘buy now, pay later’ phe­nom­e­non … is true to la­bel. Get hooked on this junk and you’ll pay a very high price later.

I am hear­ing a lot of ad­ver­tis­ing for Su­per­Su­per — a shop­ping re­wards pro­gram that pays re­wards di­rectly to your su­per ac­count with GuildSu­per. It’s tar­get­ing women, en­abling us to boost our su­per bal­ances by do­ing noth­ing dif­fer­ent we are shop­ping any­way! What are your thoughts on this?

Louise

I ac­tu­ally heard Su­per­Su­per ad­ver­tised on the ra­dio, and my first thought was: “Well, this sounds like the fi­nan­cial equiv­a­lent of a Spice Girls song.”

Girl Power! Yeah! We can shop and save for our su­per! So I’ll tell you what I want, what I re­ally, re­ally want. I want a su­per fund that doesn’t zig-azig-ah: GuildSu­per has un­der­per­formed an av­er­age su­per fund over 1, 3, 5, 7, and 10 years, ac­cord­ing to Su­perrat­ings.

I as­sume this is be­cause their fees are a lit­tle, shall we say, Scary Spice. At 1.38 per cent per an­num plus $95 a year. Bot­tom line? Any money you save from their slick shop­ping cam­paign, you’ll give back in higher fees and lower re­turns (and then some).

So, if you want to be my (su­per) lover, you have to get with my plan. By all means score re­wards from shop­ping, but you don’t need GuildSu­per to do it (though hats off to GuildSu­per for mak­ing it su­per … sim­ple). All you need to do is

Google “Wool­worths dis­count cards” and you can get 5 per cent off your shop­ping.

(Tight-arse tip: most re­tail­ers of­fer these dis­counts if you buy their gift cards or e-vouch­ers … be­cause they bank on a cer­tain per­cent­age of peo­ple los­ing the cards or for­get­ting about them, and they’ll pocket the money.)

Then, take your sav­ings and make a con­tri­bu­tion into an ul­tra-low-cost in­dex su­per fund. Spice up your life!

DOES RENT­ING NOW MAKE SENSE?

I would like your thoughts on some­thing that is both­er­ing me.

Fore­cast­ers think that house prices are set to fall at least 5 per cent over the next year. If you buy a $1 mil­lion house now, in a year you will have paid 4 per cent stamp duty up­front and 4 per cent in­ter­est in ser­vic­ing — and suf­fered a 5 per cent drop in value. That’s 13 per cent gone, wip­ing out over half of a 20 per cent de­posit!

Isn’t rent­ing at a 3 per cent to 4 per cent yield bet­ter? Should there be a ‘Bare­foot Warn­ing’ that rent money some­times is not wasted?

Dee

My warn­ings for first home buy­ers aren’t about falling prop­erty prices, but ris­ing in­ter­est rates.

I de­voted an en­tire chap­ter to it in my book: it’s called ‘The Cu­ri­ous Case of the Post­code Povvos’ … first home buy­ers who live in cafe suburbs … but can’t af­ford a cof­fee be­cause they’re a slave to their mort­gage.

In that re­gard, I to­tally agree that rent money is not dead money if you can’t af­ford to com­fort­ably ser­vice a mort­gage and have a com­mon­sense buf­fer for higher in­ter­est rates (which will come at some stage in the next decade). My view? With falling prices, there is ab­so­lutely no rush to buy your first home. Yet don’t get paral­y­sis by anal­y­sis. You’ll pay stamp duty and in­ter­est when­ever you de­cide to buy. So, once you find a home you love, that you can af­ford, and that you will live in for at least a decade, buy it.

SOUTH­ERN CROSS TRAVEL IN­SUR­ANCE

This ques­tion is on be­half of my brother. Af­ter be­ing di­ag­nosed with se­ri­ous bone can­cer in March 2017, he pro­ceeded to ap­ply to his travel in­surer, South­ern Cross Travel, for a re­fund on his overseas trip, planned for April 2017.

But South­ern Cross has re­fused to pay up the $4000. His doc­tors are at a loss as to why they won’t pay — fairly cut and dried they thought. How damn sick do you need to be? Please help!

Nick

I read through South­ern Cross’ Prod­uct Dis­clo­sure State­ment. It’s pretty clear: “This pol­icy au­to­mat­i­cally in­cludes cover … for ac­tual and rea­son­able losses in­curred by you be­cause of an un­ex­pected event, if you have to can­cel or change the dates of your jour­ney be­fore leav­ing Aus­tralia.” And it de­tails one of the ‘un­ex­pected events’ as the “di­ag­no­sis of a ter­mi­nal con­di­tion, or a con­di­tion re­quir­ing ra­dio­ther­apy or chemo­ther­apy”. They say they’ll pay up to $2500 on a sin­gle trip.

Like your brother’s doc­tors say, it seems pretty cut and dried, so per­haps I’m miss­ing some­thing.

Or maybe it’s South­ern Cross that’s miss­ing some­thing. Most big com­pa­nies have so­phis­ti­cated me­dia track­ing sys­tems which alert them to when their names are men­tioned in the me­dia.

So, since this col­umn is be­ing pub­lished across the coun­try, maybe they’ll pick it up.

Just in case, let’s throw in a few key­words: “South­ern Cross Travel In­sur­ance Fair Suck of The Sav”. Let’s see if South­ern Cross Travel In­sur­ance re­views your brother’s case and, if he’s in the right, pays the claim.

Over to you, South­ern Cross Travel In­sur­ance.

The ‘buy now, pay later’ phe­nom­e­non could ul­ti­mately leave you pay­ing a very high price.

Newspapers in English

Newspapers from Australia

© PressReader. All rights reserved.