Making Money

Just do it — sort out your 401k 🇺🇸

There’s no mandatory retirement saving in the USA which depending on who you ask is exciting or terrifying 😜

If you do find it all a little overwhelming here’s our take on how you can start saving (well really it’s investing) for retirement in under 10 minutes. 5 minutes to read this, 3 minutes to take the first step, and 2 minutes to pat yourself on the back 😉

Where can you put your money?

There are 4 options –

1. Traditional 401(k),

2. Roth 401(k),

3. Traditional IRA (“individual retirement account”), and

4. Roth IRA.

Traditional vs Roth? 

Traditional means you contribute money pre-tax, and pay tax on withdrawals.

Roth is the opposite, contribute money post-tax, don’t pay tax on withdrawals.

401(k) vs IRA?

401(k) plans are sponsored by your employer. Not sure if you have one? Ask your manager or HR.

IRAs aren’t employer sponsored and while most people may be eligible, your contributions may be limited if your income exceeds a certain level or if your employer offers a 401(k).

Which bucket do you fill first?

If your employer offers a 401(k), start here.

Why? Because if they offer a matching program, it is essentially free money. If you do nothing else, at least contribute enough money to maximise the match.

If you have a choice of a traditional or Roth 401(k), traditional is preferred if you expect to be a lower tax bracket when you withdraw your money, and if you want to lower your taxable income upfront.

Once you’ve set up your account, don’t forget to decide what to invest in. This requires doing some research as options will vary depending on your employer’s plan. The key items to compare are returns, risk and fees. If your 401(k) website has tools and/or calculators, give them a go.

💡The short cut method: find the most financially savvy person at work and ask them what they do. Then check if what they said works for you.

Where do IRAs fit in?

Perhaps your 401(k) doesn’t give you the investment options you want, or perhaps you want to make some contributions post-tax and withdraw the money without penalty before you turn 59.5 years old (Roth IRA only). There are a variety of reasons why you might want to set up an IRA. But first, check if you are eligible.

If you have a choice of a traditional or Roth IRA, similar to the 401(k), traditional is preferred if you expect to be a lower tax bracket when you withdraw your money, and if you want to lower your taxable income upfront.


#1 what happens if you leave your job?

You are no longer allowed to contribute to that 401(k). You can choose to keep your existing 401(k) or roll it over to an IRA. Rolling over into a Traditional IRA won’t incur taxes, rolling over into a Roth IRA will. You may want to keep your existing 401(k) if there are particular investment options that are only available in that plan.

Don’t forget to check out your new employer’s 401(k) and enrol in that!

#2 what if you don’t have a 401(k) AND aren’t eligible for an IRA?

No worries, open a regular taxable investment account and put your retirement money there.

One more thing…

🔎 If you have a spare couple of hours and want to get into the nitty gritty details, here’s the IRS link for retirement plans.

Now before you go and forget everything, go set up your 401(k) now!

Making Money

Just do it — sort out your superannuation 🇦🇺

Superannuation is probably the most valuable investment you own that you don’t know about.

When 9.5% of your salary goes there, it’s worth taking a closer look at where your money is going.

Not convinced yet? 

Well, the Association of Super Funds of Australia found the average superannuation balance at time of retirement (assumed to be age 60 to 64) in 2015-16 was $270,710 for men and $157,050 for women. It’s a decent sum of money! 

Super is often forgotten about because you can’t access it until you’re 60 (if you are born after 1 July 1964, and have no special circumstances e.g. financial hardship) and because it can seem overwhelming. 

But the sooner you make sure your super is in a good place the better because of the magic of compounding (it’s not really magic, it’s just maths 🤓).


1 Find your superannuation

Register for the Australian Taxation Office’s online services via myGov. You’ll need your Tax File Number and to verify your identity, either through bank accounts or previous tax returns.

Once you’ve set up your account you should be able to see how much you have in each of your super accounts (the information may be a couple months out of date, but hey it’s a good start).

2 Consolidate your accounts 

Ok so maybe you have a couple of different accounts, does it really matter? Yes! You’re probably getting charged admin fees for each account 😧 and if you’re with the default option for your fund (which the vast majority of us are) you’re basically paying fees to different people to own very similar things.

The Productivity Commission found that unintended multiple accounts costs $2.6 billion a year in unnecessary fees and insurance 🤦🏻‍♀️.

So if one account is enough which one should you go with?

Did you know that the difference between a high performing and low performing account could be worth $400,000‼️

You can check out superannuation comparison websites, which we did. Did you know some of them receive fees for referring you to certain companies and products, and others sell their ‘awards’ or ‘ratings’ for advertising purposes? 🤷🏻‍♀️

So then we went straight to the source and looked at the Product Disclosure Statements (available on the fund’s website) and the statistics from APRA, the government regulator (here if you’re interested). There’s a lot of information out there.

Want to know what we’ve found?

Now you might be thinking, but I’m a special snowflake, how on earth could you find the right account for me?

Again let’s go back to the Productivity Commission’s report “a ‘no frills’ product with low fees that is allocated to a balanced (or balanced growth) portfolio is likely to meet the retirement needs of most Australians during the accumulation phase.” The accumulation phase is their term for anyone who’s still accumulating super, aka anyone still working.

💡How fortunate because that’s what we’ve looked at 😏💡

Want our guide to what we’ve seen to be the best performers with lowest fees? Drop us a note at

You could spend hours searching on the internet, or you could get a head start. We’ve also covered what you should be looking out for so assessing whether your super is any good should be so much easier 😁

Financial Philosophies, Making Money

Which savings account is best?

Savings accounts don’t get much love these days and given the low interest rates it’s not hard to see why.

A quick Google search will tell you that savings accounts barely pay enough interest to cover inflation, so is it still worth putting money into a savings account? 🧐

Good question!

Well if you know you need to use money in the short term you want to keep it somewhere readily accessible. For example, if you need to pay your rent next week, you probably don’t want to risk it disappearing in a stock market dip. If you are going on a holiday in a few months, you probably don’t want to risk it disappearing, well you get the picture.

So which savings account should your money go in to?

Are you ready for something mind blowing?

It doesn’t really matter (as long as your savings account is guaranteed by the government)!


Just think about it, $1,000 at 3% p.a. will earn you $30 after one year (assuming annual compounding), whereas 2% p.a. earns you $20.

If you had $100,000 then 1. your interest rate will matter but 2. why would you have that much money sitting in your savings account?!

Life is short, spend your time on things that matter. 

Decision making, Financial Philosophies

The effort reward matrix (aka the guide to life)

Food for thought!

What is shown in the matrix 👆 is illustrative and will vary based on your skills, experience and your subjective definitions of time, effort and impact.

The effort reward matrix is a decision making framework to help you make better decisions

On the vertical axis is impact – here impact means potential payoff or reward. There are very few guarantees in life and this is not one of them! 😅 On the horizontal axis is effort – this could time, money or a combination of both.

Starting from the top right quadrant (high impact and relatively easy to do). These are our 3 must dos.

  1. Sort out your superannuation (🇦🇺) / 401k (🇺🇸)
  2. Pay off high interest debts
  3. Build an emergency fund

Then moving to the bottom left (low impact and hard to do), also known as the area to avoid. For example cutting non-discretionary expenses. There’s no harm in trying to find a cheaper place to live, but that’s probably not the easiest thing to do.

Then there’s a choice. How interested much time and effort do you want to spend managing your money?

If your answer is, not much, then go to the bottom right (low impact and relatively easy to do). This includes saving and cutting discretionary expenses because they require no monetary outlay and are essentially about changing behaviour, or in the case of Raiz / Acorns (or really, any other automated investing app), very little money outlay and basically no change in behaviour.

You’ll notice that most types of investing fall into the higher impact but harder to do bucket so it is not surprising many people choose to do nothing. It’s also why the investing industry exists, right? Pay someone else to do it for you (if you don’t want to do it yourself).


So when should you use the matrix?

All the time!

Seriously, it’s a super helpful tool to figure out where you should spend your time, effort and resources.

Sit down and draw up your own version. See what works and doesn’t work for you.

Make better decisions, start today! 😎