Ep 165: How important is wealth in the Coronavirus world? | Bigger questions

Ep 165: How important is wealth in the Coronavirus world?

Exploring fear, superannuation, and something bigger
Speaker(s): 
David Knox
Bible reference(s): 
Proverbs 27.12
Date: 
Sun May 31st, 2020
Materialism
Politics and economics
superannuation. wealth
Money
fear
investing
Wisdom
patience

We are living in uncertain economic times. The markets are down and many people are losing jobs. So how can we better prepare for the future? An insightful conversation exploring fear, superannuation, and something bigger.

Our guest: Dr. David Knox is a senior partner at Mercer Australia, a financial services consulting firm where he is a consulting actuary to several superannuation funds. David is involved in thought leadership in the area of superannuation and pensions and is passionate about improving pension systems around the world.

Check out the video from our Monday night Facebook Premiere (you can still access the video after the Premiere).

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Bigger Questions asked in the conversation

Now David, you’re involved in thought leadership in superannuation and pensions - and in fact recently you’ve been interviewed by the Financial Times and the Wall Street Journal. So what are the big questions these prestigious financial publications are asking?

Smaller question: Superannuation

Well David to kick off Bigger Questions we usually like to ask a couple of smaller questions, just to get everyone thinking. Now today we’re talking about wealth, superannuation and the future and so David, I thought I’d ask you just one smaller question about superannuation in Australia.

Superannuation industry: changes

That’s an immense amount of money. Superannuation is a massive industry in Australia. But we’re going through a very sudden economic shock due to coronavirus, markets have come down substantially, what has been the impact of Coronavirus on super funds?

Now to counteract the economic damage of this, the Government has instituted some changes to superannuation. Can you share a bit about what’s changed?

What do you think are some useful principles people should consider when deciding whether to withdraw their super?

Is it wise for people to access their super now?

Where do you find wisdom?

Wisdom from Bible

David - you’re a Christian believer - and there is a section of the Bible which is commonly called wisdom literature?

The book of Proverbs is a part of this wisdom literature from the Old Testament part of the Bible. It offers short pithy insights into the nature of life in the world. It offers practical, memorable wisdom for living life. One of these is Proverbs 20:21 which says,

An inheritance claimed too soon

will not be blessed at the end.

Is there wisdom here?

Another one of these pithy, memorable wisdom sayings is found in Proverbs 27:12, which says

The prudent see danger and take refuge,

but the simple keep going and pay the penalty.

What do you think this says to the current dangers we face?

The book of Proverbs also goes on to prize prudence and steady accumulation for example Proverbs 13:11,

Dishonest money dwindles away, but whoever gathers money little by little makes it grow.

And Proverbs 10:4

Lazy hands make for poverty, but diligent hands bring wealth.

Is this a case for superannuation do you think?

Uncertainty of Future - issue of control

During this pandemic people have lost control in many ways and the value of their investments have fallen. The natural response is to become more conservative or, if you like, reduce risk in your investments.

Now in the New Testament part of the Bible, Jesus offers some wisdom of how to deal with the uncertainties of life where is says in the Matthew 6:25,

‘Therefore I tell you, do not worry about your life, what you will eat or drink; or about your body, what you will wear. Is not life more than food, and the body more than clothes?

Jesus goes on to tell people to trust in God and seek first his Kingdom. So Is Jesus’ advice here naive? Telling people to not worry, but trust in someone I can’t see?

But you’re a Christian - if you trust in Jesus - and believe that God is going to look after our needs, why do you spend so much time devising sophisticated retirement savings schemes? Is having superannuation a lack of faith?

Now does the Bible seem to be advocating two things here: be prudent, take refuge, make wise decisions, save money, but then also to trust in Jesus, and not worry - is this possible?

Even if you’re reckless with money, there is still hope

There is another story in the Bible in the Gospel of Luke 15:11-32, which is described as the Prodigal Son. Where a son did claim his inheritance too soon. He then squandered it and falls into hunger and poverty. Yet he realises his mistake, repents, returns and is blessed. The Father of the son says, in Luke 15:24, For this son of mine was dead and is alive again; he was lost and is found.” So they began to celebrate.

So even if you are reckless with wealth and make some very unwise decisions, does the Bible offer hope?

The Big Question

How important is wealth in the Coronavirus world?

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