with preservation of capital of paramount importance
I believe it was Ross Gittins on 2gb this morning talking financials... He told the story of his high earning father, a medico...who chased low taxes his whole life and ended up being virtually poor, with little to show for all the money he earnt.
He said many people are like that, they focus on the tax side, rather than making the money. Sure the more money you have after tax, helps what is available to invest.
The other big problem the majority have, is they do not concentrate on preserving their capital base.
He wants students to learn financial management as a compulsory subject. From high school to their university classes.
I too see with my clients, together with the focus on super, they are almost obessessed with paying less tax, but then they cannot see the woods for the trees.
I see so much red tape with the superfunds, without the corresponding freedom, that one obtains when they invest outside of super. Sure the tax on income is lower, but that is after the contributions are taxed upfront on entry.
Sure there is a tax benefit of taking the money as employer super, rather than salary, but your savings and tax breaks are locked in to age 55, and some to age 65, and growing to 70 later.
I am against stocks, for the most part, with you handing over management of your money to another group. I agree most cannot manage a household budget, let alone a lifetime savings plan. It is also impossible to ask the majority to simply manage their principal residence, in such a way that it will provide a tax free capital addition in retirement, if required.
Take BHP as an example..$50 down to $33 that is a substantial loss of capital, as in about a 1/3rd of your capital gone... and so many people, with a conservative attitude invested in BHP, with many similar stocks in the same or worse position
