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How to use your super to buy a house

Last week I was forced to recognise that a lot of parents could really do a whole lot more to save their kids from a life of money disasters. Not only could they be better role models in showing their kids how to build wealth, they could so easily do something that really could make a difference.

So what would that be? It’s simple. As parents, we need to explain to our much-loved kids what’s important in life and how it’s critical to keep the focus on these good living goals.

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3 good things

Sure, there are plenty of aspirational benchmarks that we should be pushing our charges towards but let me have a shot at three unarguable ones:

  1. The first is that we fight like the Dickens to be happy. Anyone who disputes this is on medication that no one else should be on.
  2. The second is to be materially comfortable so that you don’t have economic or hip pocket threats to your first goal of happiness.
  3. And third, you should be programmed to be a good citizen and role model to not only add to the community’s overall positivity but so that, in turn, over time, you inspire the people who follow you to follow your example.

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I confess

Hell, I’ve become a sociologist with strong opinions when I always thought I was an economist who’d been forced into the real world by having children, grandchildren and a business with over 50 staff!

Now back to the story and why am I writing this. Let me reveal that there is a bit of ‘bad father’ guilt driving this tale.

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People do want to learn about money

On Tuesday, I hosted a live version of my Money Talks program on the Sky News Business channel at the Barangaroo theatre of BT Financial Group. At the end of the first recorded show, we allowed the audience to ask questions. The enthusiastic inquiries from the audience proved to me that, if given a chance to see super explained in an entertaining way, an audience can get interested — even excited!

However, that wasn’t a revelation to me because I’ve seen this happen with my radio programs and my business speeches I’ve being doing for nearly 30 years.

A father and his 2 sons

What made me think about the role of parents and what we can do to enthuse our kids was made clear to me by a guy in his 50s who had his two 20-something sons with him in the audience.

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Money from super into a first home

All three came up to me at the end of our recordings and asked about the First Home Super Saver Scheme (FHSS), which, from 1 July 2018, allows would-be home buyers to release their voluntary contributions to their super, along with associated earnings, to help them purchase their first home.

They can apply to have a maximum of $15,000 of their voluntary contributions from any one financial year, included in their eligible contributions, to be released under the FHSS scheme, up to a total of $30,000 contributions across all years. A couple could end up with $60,000 out of their super to help get that all-important deposit.

Women can boost super

During the show, we also talked about the new offering in the Budget this year that helps women who take time off to have a bubs to play catch up with their super. As the press covered it, a woman who was out of work for five years looking after a child could put five years worth of the maximum $25,000 contribution a year in one go to play catch up. If they had a lazy $125,000 laying around the house, they could wack it into super!

Men can play catch up too

Sure, not everyone would be so lucky but the idea is meritorious and will help some women improve their super. But what was really interesting that got these three guys interested was my revelation that it was not just for women — men can play catch up too.

Imagine a guy who worked for five years then took two years off to study overseas. When he came back he could put $50,000 into his super, maybe from the income from the work he also did while overseas.

Enthusiasm is contagious

The enthusiasm of these young people urged along by their Dad was a sight for saw eyes and rammed home the message that I could have even been more pushy in making my sons more interested in money.

My 2 sons

OK, my sons had money education stuff all around them most of the time and my oldest, Marty, is now the CEO of Contango Asset Management and its share price has gone from 37 cents to nearly 70 cents since he took over. So he’s doing a few money things right. Meanwhile his brother Alex has built a great small business website for online business coaching that a major bank has thrown its weight behind, so our inspiration has been OK.

But I thought this: “If I’d remained an economics lecturer at University, would I’ve had the same impact that this father at my TV show had had on his two sons?” I think the answer might have been “No” because I don’t know if I would’ve had the enthusiasm, the focus and even the ideal to inspire my sons to be super interested in things like super, wealth accumulation and so on.

Teach your children well

As parents we should be inspirational for our children and it works for money as well as it does for life generally. And if you don’t have a parent who can do it for you, well inspire yourself and make sure you pass it on when you become a parent.