Level Up Your Super, play with risk

Imagine your superannuation as your ultimate quest—a treasure chest waiting to grow into a fortune. But here's the catch: if you leave it on autopilot, you’re letting fate decide. Instead, you can take the reins and become the hero of your financial future. Ready to play? Let’s break down the basics of the super game so you can conquer it with confidence.

What Is Investing in Superannuation?

Think of "saving for retirement" as stashing gold coins in a vault. Sure, the coins are safe, but they aren’t growing. Now, imagine investing: you use those coins to buy powerful artefacts (assets) that grow in value over time, earning you more treasure as you go. This helps you stay ahead of inflation, the sneaky villain that makes everything cost more over time.

Superannuation is your magical inventory for holding these investments, with the added bonus of tax perks from the government. Your coins are pooled with other adventurers’ super funds to buy assets, which can level up in two ways:

Capital growth: Your assets increase in value.

Income: They generate rewards like rent or dividends.

If you haven’t chosen how your super is invested, it’s being handled by your super fund until you’re ready to unlock customisation mode.

Asset Classes: Choose Your Power-Ups

Every adventurer needs the right gear. In the investing game, assets are grouped into categories based on their traits, called asset classes. Here are the four main ones:

Shares: Owning shares means you’ve joined the guild of a business on the stock exchange. These are fast-moving, high-reward items—perfect for long-term growth.

Property: From bustling city offices to grand hotels and retail centres, property is like real estate for your portfolio. It can be listed (easy to trade) or unlisted (a rare find but harder to sell).

Growth Assets: Shares and property fall into this category. They’re high-risk, high-reward items that can make your super chest overflow with loot—but be prepared for a bumpy journey.

Fixed Interest: Also called bonds, these are like lending your coins to mighty kingdoms (governments) or corporations. In return, you get regular payouts (interest) and your loan back at the end of the quest.

Cash: These are your quick-access coins, like short-term deposits or cash management trusts.

Defensive Assets: Fixed interest and cash give you a smoother ride, with steadier but smaller rewards. Think of them as your trusty shield—they won’t win you battles, but they’ll keep you safe.

The Risk vs Return Trade-Off: The Hero’s Choice

Every hero faces tough decisions: Do you go for the high-reward but dangerous path (growth assets), or take the steady, low-risk road (defensive assets)? The greater the risk, the bigger the potential return, but the journey might be rocky. Finding the right balance for your super strategy is like building a character that thrives in both combat and defence.

Alternative Assets: The Rare Items

Beyond the main asset classes lie the rare and mysterious alternative assets. These might include infrastructure (like airports) or private equity (unlisted businesses). Super funds classify these treasures as either growth or defensive, depending on their stats. One fund might label an airport as a growth asset, while another sees it as defensive—so check how your super fund handles these.

Level Up Your Super Strategy

Your super is your financial adventure. Whether you stick to defensive moves or charge ahead with growth assets, the key is understanding your gear and making choices that suit your play style.