An investment expert has some sage advice for Millennials, and it’s not to double-down on savings.
What you should be investing in right now
Don’t do surgery on yourself.
This is a favourite catchphrase of Statewide Super’s high-profile chief investment officer Con Michalakis, who admits, when he’s giving advice, there is a risk of sounding like “your grandfather” or “a Greek mother”.
This article was produced in collaboration with Statewide Super.
But the Adelaide-born investment expert’s advice for those under 30 is simple: have a “healthy interest” in superannuation and trade, but don’t let it get in the way of “real world” objectives, such as a career or finding a partner.
“Each generation discovers something new and exciting, so in the late ’90s we had the dot-com era where people started trading for a living, and then between 2005 and 2007 it was all about buying as many houses as you could,” Con says.
“Today, it’s about the gamification of investing, which I don’t think is the right approach. Investing should be over your life horizon. If you’re in your 20s and 30s, you’re going to be in superannuation for 40 to 50 years.
“If you are time poor or building your career, investing is all-encompassing. It’s a lot of work and effort, and so having specialists who do that for you is a way for you to outsource some difficult decisions.”
Con, who manages Statewide Super’s more than $10 billion in funds, is one of those specialists and has been in the game for almost three decades.
In his 20s, the University of Adelaide graduate was well on his way to becoming a maths teacher when he caught a whiff of finance in the 1980s and 1990s, when superannuation was fresh on the scene.
He says a lot of his life has, admittedly, come down to luck.
“I was lucky to have been born in the ’60s, and the markets opened up in the ’80s and ’90s; I was lucky to travel around the world; and I was lucky to have landed in this industry as superannuation just got started.”
And after stints in New York, London and Hong Kong working for investment firms, Con has spent the last 13 years heading up Statewide Super’s investment team.
For Con it was both an opportunity to come home and also work for a fund that supported SA’s growing economy through investments in Adelaide Airport and Flinders Port.
The investment team, much like Con, is SA-born-and-bred. All were born locally, studied locally and live locally.
“We have a Rhodes Scholar with a PHD in pure mathematics and we have someone who spent 10 years at the RAAF and then went back to study at Adelaide Uni,” he says.
“It wasn’t really by design, that’s just how they got through the process.
“But when we sat down and thought about this, I was pretty impressed by how they were all South Australians who wanted to live and work here, which, from my perspective, is kind of cool.”
One of Con’s tips for young people is to heed the message of Albert Einstein about the power of compounding interest.
Many people weighed up during the COVID-19 pandemic whether to raid their superannuation funds as part of the federal government relief package. Industry experts warned withdrawing even $20,000 now would cost them significantly more down the line.
“Albert Einstein had this famous saying that one of the natural wonders of this world is compound interest, and so the longer you have to invest for the long-term, the greater the chance you can build a bigger pot of money when you retire,” he says.
What Con does tell young people starting out their working lives is to forget largely about investment and focus on their “human capital”.
“For someone in their 20s or 30s, I say enjoy life, put your money away into super and try to think long-term, not like a trader,” Con says.
“I’m from Generation X – so before people say ‘OK Boomer’, I’m not a Boomer. But, you should develop yourself in terms of your human potential because the discussion you have in your 50s, when you look back at your 20s, is ‘Did I experience enough of my life?’
“It’s kind of weird – here’s an investment person talking about non-investment stuff.”