u/bugHunterSam

We will try to limit any posts on the budget/potential CGT changes to 1 a day unless it is a novel discussion that hasn't already been answered to death.

Posts will generally get removed as a duplicate question.

We've also banned 4 accounts over the last day or two for abusive or disrespectful language. We've locked the comments on a thread that was starting to derail.

Please keep conversations respectful and please continue to report any comments that don't fit this.

Happy to take any feedback or questions you may have on the modding approach here.

Afterall it is a community effort to keep this place safe for respectful conversations.

Here's why: with enough time in the market there can be substantial return difference over one lifetime.

Take a 20 year old minimum wage worker who is on $24.95 AUD per hour (49K per year) with no super, let's call them Luke Skywalker (happy may the 4th day).

Default super = 728K
If Luke does nothing and just uses their funds default balanced option they could have $728K in super in today's $ by the time they are 67. This is assuming 4% growth after inflation. This could generate over 44K per year in income in today's $ until Luke is 92 and they will still get a part government pension on top of this money.

Growth = 1.091m
Say Luke switches to 100% growth instead. They could have 1.091m in super. This is assuming 5.3% growth after inflation.

High growth = 1.459m
What about high growth? that's over 1.459m in super at the age of 67. This is assuming 6.2% growth after inflation.

That's a whole $731K more between balanced and high growth. That's over double. This is what a 2.2% growth rate difference over a lifetime can achieve.

Luke hasn't had to add any extra $ into super, this is all based on the 12% compulsory employer contributions on top of his salary.

In the high growth scenario Luke could probably afford property on Tatooine and still be no worse off when compared to the balanced option. That's a pretty good outcome for someone whose been on minimum wage their entire life. They probably aren't getting on the property market any other way with cost of living these days and a maximum borrowing capacity of 250K while they are working.

There are some issues with this modelling, it's usually not a great idea to do 100% high growth until the age of 67, most people would probably want to de risk their portfolio as they get closer to retirement.

But it is food for thought.

https://preview.redd.it/rj8kf7owf0zg1.png?width=1076&format=png&auto=webp&s=fd9530c2293f15832cc3be4cd0de52c86611be9f

Please remove if not appropriate.

I'm running a networking event in Sydney on the 24th of May from 2pm at Sydney park for anyone who wants to meet in person to discuss financial independence stuff. It's a free event over on eventbrite. Should be searchable with FI Sydney picnic. There's no sales pitch that you'd have to sit through.

Feel free to copy the format and run one in your local area too.

The main motivation for this was someone on reddit reached out and asked if I'd be interesting in hosting a community event. I might try to run these monthly.

I might eventually move the event to a different platform, I use to run Sydney testers and Sydney cheese club on meetup but that platform is way too expensive now.