DON’T GET SOLD AN SMSF!

We’ve been quite transparent of our somewhat dislike towards self-managed super funds (SMSF)! They can sometimes have a place for some people, however we believe too many hard working Australian’s end up being sold something they don’t need and shouldn’t want.

Remember, your superannuation is most likely the integral piece of your retirement planning, and whilst it has been made to appear hard to find a good super fund, it’s actually quite simple, and you certainly don’t need some shiny or complex setup, like an SMSF to succeed.

So, for those of you still contemplating an SMSF, we urge you to proceed with caution, especially if you’re considering such because you want to buy residential property.

Many people who set up SMSFs are sold, firstly, on the idea of ‘control’, not realising how much control they can have within their existing super fund (i.e. you can choose how your money is invested), and secondly, on being able to buy an investment property. They are sold on emotion of the latter because property is something that ‘feels’ familiar and safe, but it’s important to understand the reality of tying up your retirement savings in property. Feelings, especially when based on limited information, should never be the basis for an investment.

This week we’d like to high five James O’Reilly of Northeast Wealth, who’s taken the time to crunch the numbers on using an SMSF to buy residential property. Click HERE to read Jame’s article.
We want to make a few points:

(i) Jame’s article sums up almost all the points we touch on when we discuss SMSF’

(ii) The only people guaranteed to make money from SMSF’s are the brokers, advisers and the accountants – the same people pushing these setups

Final thought: When most people retire, they often wish to take a long well-deserved overseas holiday, help their adult kids out financially, and sometimes pay off the remainder of their mortgage. These objectives require some of your wealth to execute, but how do you access this wealth in your super if it’s invested in a physical property? You can’t sell a room, or the garage, and the weekly rent won’t cut it. Don’t wait until you’ve retired to realise this fact.

If you want to ensure your super fund is setup to serve your best interests, using a low cost, appropriately invested fund, we suggest you login to Wages to Wealth and review Module 6.

As always, please shoot us an email at [email protected] if you need support or have a question.

Cheers,

Dan and Dave