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Super high fees on 'lost' super money in Oz; Margaret Atwood on debt; Job career or calling; 80 the new 65; Let's make a deal - the Mesquita way

Posted in Personal Finance

By Amanda Morrall (email)

1) Don't get mad, get your money

I'm cross today and it has nothing to do with the hours wasted on my chocolate mocha cake disaster. No, my anger was tweaked this morning after reading about how much fund managers across the pond are creaming it in fees on unclaimed super money. More than A$5 billion in unclaimed super money (much of it belonging to New Zealanders who spent time working in Australia) is parked in high fee eligible roll over funds (ERFs).

I've written several times about the lost money (see this link on how to claim it) so I wasn't surprised by the figure. What did get my back up though was the fees. According to this Sydney Morning Herald story, the fees on these ERFs are around 700 basis points. So on $1,000 you're paying 7% in fees. That compares with an average of 1.3% in a regular super fund.

What are you waiting for people? Get that money and repatriate it or else put it to work for you in a lower-fee fund.

2) Maggie's take on debt

Canadian literary heavyweight Margaret Atwood talks to Salon magazine about the screen adaptation of her book "Payback:Debt and the Shadow Side of Wealth"; a series of essays on debt relationships across the board. While we tend to think of debt purely in financial terms, Atwood frames it in more humanistic terms. Read on and you'll find another interesting article on the evolution of American debt. One to bookmark for a weekend read.

3) Job, career or calling

Bill Barnett, blogging for the Harvard Business Review, discusses how we can find more meaning in our jobs. Essentially it boils down to attitude and how we view our role and agency in a particular position. He refers to research from Amy Wrzesniewski which breaks down employment into three groups; a job, a career or a calling. As you'll have probably guessed those who perceive their work as a calling report being hugely more satisfied even though they might make less money (to start) than the careerists who place most value on ego and money. But a calling isn't necessarily volunteer work. By design or coincidence, those who find their calling also seem to attract greater wealth.

Here's an excerpt:

Individuals with callings differ because of what they prioritise in their work. Their goals are distinctive in three ways:

1. They emphasise service. People with callings put a higher priority on helping others. Some are guided by the kind of lofty purpose that's associated with leaders in religion, public service, or charity work. Others operate their businesses to serve their markets in ways that make customers better off.

Brian (names have been changed) is a good example. After finishing his MBA, he got a well-paid position with a socially conscious mutual fund. He liked the fund's purpose, but he felt little connection between what he did and his desire to improve the planet. Then he had an idea — to provide a new category of food product that would improve diets. Even though his second baby was about to arrive, he took the risk to make this happen. He left the fund to found his own company, knowing he'd be living on his savings. Brian came to life. A decade later, with his products on many retail shelves, Brian remains excited about what he's doing, how he spends his days, and how it benefits people. It's a calling.

2. They emphasise craftsmanship. People with callings prioritise what I call craftsmanship. They want to make things happen and to be excellent in their fields, not just because of potential growth in their company but because they believe those things are intrinsically worthwhile.

Take manufacturing CEO Steve. Steve tightly focuses his personal value proposition on what he does best — leading manufacturing companies that need significant improvement in operations. Steve spots the complexity in operational processes before most others do. In a senior position, he's had to learn how to become more than just a thinker; he's learned how to mobilizer and how to teach. That's the only kind of position he'll consider — both to continue his high performance and to deepen his expertise. Steve's a craftsman.

3. They de-emphasise money. In making career decisions, people with callings push money to the background, instead choosing to focus on what a new role has to offer beyond its monetary rewards. No one I've known with a calling has had income as one of their top career objectives.

Nathan's emphasis on service and accomplishment replaced his need for a significant paycheck. His childhood interest in education grew stronger in college when he saw the challenges facing children in urban schools. He became a teacher in a low income school and was excited to see the impact he was having on his students and their families. He declined promotions in the school system that would have increased his pay but taken him away from these students. He only moved to headquarters when the new role offered broad influence in teaching across multiple schools. Two years later, the school district promoted him to principal at the young age of 29.

Have you found your calling?

4) 80 the new 65

Middle-class America is giving into the new retirement reality. A new survey, reported by CNN Money, finds that most are prepared to work till 80 now to compensate for a shortage of savings and also the inevitable paring of government pensions, which will be bled by the Baby Boomers and escalating health care costs. We'll suffer a similar fate here in New Zealand, I have no doubt. Find something you enjoy doing folks, because you'll be doing it a lot longer. Those with time on their side and an enforced savings plan and habit could be the exception. There's a video in the article for 20 year olds looking to save.

5) Let's make a deal

Bruce Buenos de Mesquite, author of the Predictioneer's Game, gives some advice via Getrichslowly.com on how to apply game theory methods to get a good deal on a car. The same level of  consumer gutsiness ought to be applied in all manner of financial transactions. Remember, you're in the driver's seat.

To read other Take Fives by Amanda Morrall click here. You can also follow Amanda on Twitter@amandamorrall

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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7 Comments

If you legislate a guaranteed

If you legislate a guaranteed honey pot you have to expect bears will turn up.

2. Great to see you picked up

2. Great to see you picked up on this. I read the book nearly 2 years ago and found it very illuminating on how it painted a more colourful picture of debt. Here's my take on it. I'll try and get a copy of the film to show in Christchurch sometime.
 
http://sustento.org.nz/payback-when-the-debt-collector-calls/
 
 

:) Shucks, thank you.   

:) Shucks, thank you. 
 

Margaret Atwood has long been

Margaret Atwood has long been one of my favourite authors. Her social commentary in fictional works is enlightening and entertaining at the same time. Thanks for the links Amanda.

#2 I bought Margaret Atwood's

#2 I bought Margaret Atwood's book a couple of years ago and found it highly illuminating. Lots of historical and literary examples. The key points for me were:
1. The debtor and the creditor are "joined at the hip". The fortunes of one depends upon the other.
2. Historically, loans were only for short periods and there has often been provision for debt forgiveness after 7 or so years if the debtor can't pay. If the debtor can not pay, some of the fault lies with the creditor for investing is such a risky venture.
3. Usuary was considered quite sinful in Christianity and Islam, which is partially why lenders were often Jewish. If heads of state ended up in too much debt from wars etc; it was quite easy to instigate a pogrom against Jews to escape from paying the debt. 

Another way us Kiwi's are

Another way us Kiwi's are losing money is Unclaimed Money - unused banks accounts, cheques and share dividends, rental bonds, etc. In Australia any money owing to you that is not claimed can become the Government's. There are a number of government websites in Australia that show this money but there is one that makes it easy by consolidating it all together. The site is www.findunclaimedmoney.com.au and you can search for free. If you find some money then for $25 they tell you where it is, provide all the forms and instructions to claim it back. Worth a look as the SA that the average amount of money owing to $250. Worth a look.