Shares or Property!

[chran]

I think super is a poor 'investment' ESPECIALLY if you're under 40. You can't access it efficiently until you're 65.

+1 here. The idea is to be able to retire comfortably without relying on super . The way I see it, money in super is not in your control and this is a v bad thing.

Property or shares? Both/ either could work if you do it right. And to do it right you have to master the medium.

 

[jingo]

+1 here. The idea is to be able to retire comfortably without relying on super . The way I see it, money in super is not in your control and this is a v bad thing.

SMSF's give you a lot more control than was previously available before they came into existence. So too does the freedom to choose a fund if you so desire.

The main drag is that you cannot access your money for many years, and the risk that governments will keep tinkering with the rules.

 

[alexlee]

+1 here. The idea is to be able to retire comfortably without relying on super . The way I see it, money in super is not in your control and this is a v bad thing.

Since I can effectively control the amount of super I contribute through salary packaging, my objective is to retire rich WAY earlier than when super kicks in.

SMSF's give you a lot more control than was previously available before they came into existence. So too does the freedom to choose a fund if you so desire.

The main drag is that you cannot access your money for many years, and the risk that governments will keep tinkering with the rules.

Yes, you now have a lot more control over what investments to make in super. However, the biggest issue is still the 65 year old minimum rule. And that can be changed at the govt's whim. I see changes to super rules over the next 30 years as much more likely than, say, them changing rules relating to ownership of assets in trusts, companies, or personal names.

Super is designed to be accessed after you're 65. If you're an active investor who saves (especially at the start), and you start relatively young, I don't believe you need that long before you can live off your investments. If I wanted some 'insurance' just in case it goes pear shaped, I'll put a regular amount into shares in a family trust and isolate it from everything else.
Alex

 

[Alex P Keaton]

Especially if you're young, you don't have to time the market that well. Buy, DRP and dollar cost average.
Alex

hi, what is drp?

 

[Alex P Keaton]

Make sure you maximise your eligable goverment concessions eg government co-contribution to super for low income earners or first homeowners saving co-contirb. These are guaranteed return. No one speaks of super but I think super is a good investment if you are on a higher salary.

First Home Saver Account

I'm thinking about setting up an account because you are allowed to transfer the money over to super if you decide not to buy a ppor. With the (government contribution $850) per every $5000 in a year as well as low tax rates it could be an option. But also I agree with Alex I would'nt want to put too much into the account to go to super because I wouldn't be able to touch it till retirement age. It would reduce the amount you can use for investing.


There are some changes since the budget

First Home Saver Accounts will now attract a flat 17% Government contribution on the first $5,000 of savings made to a First Home Saver account in any year.

Low tax rates
Investment earnings (or interest) that accrues in a First Home Saver account will be taxed at a maximum of 15 per cent.
Government contributions will be tax free.

You can hold your first home saver account for a minimum of 4 years. Not sure though how long you can keep it open for though.


*********
Cashing out to buy a first home
Funds can only be withdrawn from a First Home Saver account to put towards purchasing a first home, or building a first home to live in.

There will be a $75,000 lifetime account balance cap, after which no further personal contributions can be made


*********

 

[Alex P Keaton]

I think the greatest 'danger' for people who maximize their super contributions while they are relatively young lies in the area of future changes in government legislation in relation to superannuation - it is impossible to foresee what changes lie ahead.
Cheers
LynnH

Yeah thats true, good point. atm i'm reading an interesting book called "Financial freedom in 5 years" and Kaplin was talking about that.

 

[Alex P Keaton]

well, it may not be for everyone, but it makes sense to me. I don't mind delaying gratification and I quite like the idea of self financing my life insurace. The premium for 1m death is about 1-2k/annum and once you have more than 500k in super you may not need the life/death insurance.

But what if your not around to see age 65??



Another very important point!!

 

[BV]

But what if your not around to see age 65??



Another very important point!!

If you die early, your nominated relatives will get your super
and they get it when you die not when you turn 65

 

[yo yo ma]

hi, what is drp?

Dividend Reinvestment Plan