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Superannuation is the Titanic which they also said was unsinkable!

Written on the 3 August 2016 by James Cagney

The experts at the time the Titanic was built declared that the ship was unsinkable. When you are only relying on the government pension or allocated pension (Superannuation) to support you in your retirement think about the Titanic. This is why:

The government has to find funds to support the huge $1 trillion current deficit in their trading account, which is increasing year after year and costing hundreds of millions of dollars in interest payments every year. What will  happen if the international banks deem Australia as an increasing credit risk and demand their money. Don't say that will not happen - look what happened to Greece and other European countries in the last few years. Then the $2 trillion in Superannuation Funds will be far too tempting for politicians to keep their hands off.  How will they persuade the public to accept  this?

Well, it won't be too difficult when they make the public aware that the Superannuation Funds Managers skim $30 Billion plus from your Super in "management fees" every  year. They will point out that during the Global Financial Crises (GFC) and the 9-11 crisis, when share markets plummeted and Super funds took huge losses the Super fund managers still extorted  their exorbitant fees.  They didn't suffer any losses!

Of course, the government will say that these Super Fund scoundrels take your money and regardless of whether you lose money or not they still get paid to "supervise" your money!  After all, who wouldn't  like a management job where you don't have to perform and show profits and you still take your fees? I believe the public will become incensed and as a result - lo and behold - the Australian Government (the heroes of the hour) will come to your rescue and take over the management of Super Funds and everybody will breath a sigh of relief.

Now what happens if the Australian government cannot pay the returns they promised you or worse still pay the sum back because they will have spent it. Think about the Greek government who could not pay the pensions they promised to pay their citizens because the country  lived beyond it's means getting more and more into debt every year. Does this scenario sound familiar?

Don't believe that Australia's debt won't get out of hand like it did in Greece.  This is how Australian politics works with each term of office:

1) The government is elected after promising the people far too much.
2) The first year they announce the austerity measures because there is no money to pay for the promises they made
3) The second year they capitulate and withdraw the austerity package because they are worried about losing their cushy jobs.
4) The third year they promise more spending and more 'give aways'  than the opposition in order to get re-elected.

And so the process continues for another 4 year term.

Politicians do not want to acknowledge how a budget works. The fundamental law of a budget is to spend less than you earn. Yet the politicians continue to promise more and more spending so they can win the next election. If you ran your household budget like that you would go broke. If you run a business like that you will go broke. Politicians' response to this:  "We realize we are spending more than we earn but we are not as bad as other countries". What lunacy is this? Do they not have any common sense at all?  Let's go broke like many other countries around the globe and everything will be OK because everybody else is doing it? For more information about how the politicians can not cope with our current fiscal problems click >>> Send in the Clowns. Believe me - this is not the musical!

Australia is going to get further and further into debt and the politicians will resort to what they know best - taking from the "Have's" to give to the "Don't Haves" just to remain in power. They will raid the Superannuation coffers. I am reminded what author George Bernard  Shaw wrote "A  government which robs Peter to pay Paul can always depend on the support of  Paul".  Politicians will continue to pander to the whim of the miss informed, disinterested and  ambivalent populous to remain or to get into power.

OK let 's assume my theory of the government taking control of your money will not happen. This is what one of the most successful Presidents of United States of America, Ronald  Reagan. said  "The government is like a baby's alimentary canal, with a happy appetite at  one end and no responsibility at the other".

There are obviously many ways to make money through property investment. What is the alternative - the "Share Market". The share market has lost billions over the past few years and your Superannuation is closely tied to the massive and unpredictable 'rise and fall' of the share market and it is just like a dead body with a concrete weight resting at the bottom of a river. The problem is when you retire and you have to go through these 'rise and fall' cycles of the share market you may well have to go back to work if the share market is down. The government does allow you to make limited pocket money whilst you retire but even that is a joke.

There are three types of people:

  • Those who make things happen
  • Those who watch things happen
  • Those who wondered what happened

Which one are you? Please don't let the captains of  Super funds sink your ship, whilst they are helping themselves to huge percentages your money. Is there a safer investment to secure your future? I wrote an article about a year ago why Superannuation will not deliver the returns you want. Click >>> HERE. You have to take control of your own future and not rely on the government.   If you want more advice regarding your financial future call James Cagney on 0416 137 645 or click >>> HELP before the Titanic sinks.

This is not financial advice. You should not act solely on the basis of the material contained in this Property Update for your investment strategies. Changes in government and legislation occur frequently and without prior notice and financial markets are unpredictable.
Please note that the information herein is of a general nature only and is not intended as specific advice for any particular person or entity.

This information was written and compiled by James Cagney.  The opinions expressed herein do not necessarily represent the views and opinions of his associates including Asset Financial Services Pty Ltd.

Author: James Cagney
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