Forget the Midas touch. Investing now requires diamond hands

Sydney Morning Herald

08-07-2025

Firstly, the mandatory superannuation guarantee contributions that an employer must make on your behalf rose to 12 per cent on July 1. So more is already automatically going into the market for you this financial year. But you can do better than that.
Secondly, increase your contributions with a before-tax top up and swap your marginal tax rate for only the 15 per cent contributions tax.
Simply talk to your employer about making a salary sacrifice of a couple of per cent this year – or if you are self-employed, you can achieve the same thing with an after-tax contribution for which you get a tax deduction via an 'intent to claim' form.
In either case, far more will go into your fund than you will lose from your pay. (Note these contributions remain capped at $30,000 a year, including your employer's, although you may be able to mop up unused allowances going back four years.)
Thirdly, claim the free up-to $500 contribution that's available from the government for people on incomes in 2025-26 of $62,488. All you need to do is pay in $1000 after tax in a year – that's just $19.25 a week.
If your total income is below $47,488, the government will match your contribution at the rate of 50 per cent, up to that maximum of $500.
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Fourthly, a higher earning spouse could pay in $3000 after tax to net themselves a $540 tax offset, which is a straight-up discount off your tax bill so essentially $540 back in your hand (which you could also invest/put into super).
All four of these moves could make a massive difference to your future. A 10 per cent median super return this year is large, but it is the third double-digit return year that balanced funds have recorded over the past decade.
Indeed, since the bottom of the GFC in 2008-09, SuperRatings says funds have delivered positive returns in 14 out of the past 16 years. And remember that on the credit crack up, the ASX/S&P 200 index of Australia's leading shares sank by a horrific almost-half.
Then, in 2020, there was a small global pandemic, which wiped 35 per cent off values for what turned out to be only a short time. But that financial year, the median balanced super fund made almost 18 per cent.
And fast forward to today and – post the initial Trump tariff turmoil just three months ago – the market is trading at record highs. Since April, those share investors who hung on for the stomach-churning ride have made some 17 per cent.
With US tariffs still uncertain and ongoing geopolitical threats, market volatility is unlikely to be over. But such conditions – in fact – represent an opportunity for investors, particular if you can invest for less via super.
Provided you do it with diamond hands.