SMSF - scary interesting

Hi all))
In the last few month I started to think about SMSF. Having read a couple of books on subj as well as the Internet sources I found self managed super fund idea scary interesting.
Scary part:
- complicated legacy and taxation;
- complicated documents system;
- in case of mistake rather heavy penalties
Interesting part:
- we will be in control of family money;
- can buy smth unusual still profitable;
- quick response to markets and more flexibility...
I know many people do it. What I dont know how time consuning it can be...
OK, OK, I have all the newbie doubts and cant formulate them properly.
When did you guys (if anyone) start your own SMSF? Was it easy for you?
Sorry if my post is a bit confusing:eek:
 
Many of us have our own super funds.

It's easy to set-up - just speak to your accountant - it can be done online these days.

Many suggest it's only worth doing if you have adequate dollars though. Some say 100k, some say 250k.

Your accountant will help you comply with the 'scary' parts you listed above.
 
i started mine with $20k in assets and $15k cash.

i've bought some gold and silver in the fund as well.

other than that - i think i'll liquidate it. i CBF'd with the auditing.
 
Hi, I was a busybody & looked into it for someone on the other forum. He & wife earn $100K each. Mid 30s with big undeductible debts.

Assume employer 9% = $18000 in total

Each matches that $18000 = $1500 p.m. = $130-$150 p.w. each

accrued p.m. interest tax saved
$1500 + 1500 $12.50 $375

After 15 years, the total saved @5% = $744430.50

I think that doesn't include tax savings.

ROI is about 35-39%

I set aside $3500 p.a. for acct keeping costs.

Try it out. It's mind blowing.

KY
 
I think that doesn't include tax savings

Tax savings are benefiting their super fund because instead of them paying 40% tax their fund will now be paying 15%.

Ok they can't touch their super till they've reached their preservation age but its still a significant benefit to them
 
Hi, I was a busybody & looked into it for someone on the other forum. He & wife earn $100K each. Mid 30s with big undeductible debts.

Assume employer 9% = $18000 in total

Each matches that $18000 = $1500 p.m. = $130-$150 p.w. each

accrued p.m. interest tax saved
$1500 + 1500 $12.50 $375

After 15 years, the total saved @5% = $744430.50

I think that doesn't include tax savings.

ROI is about 35-39%

I set aside $3500 p.a. for acct keeping costs.

Try it out. It's mind blowing.

KY

Kim... you definetely want to tell me smth.... I just dont understand what:confused:... could you please explain from the line 1500+1500 $12.5? And what is ROI?
 
Kim... you definetely want to tell me smth.... I just dont understand what:confused:... could you please explain from the line 1500+1500 $12.5? And what is ROI?

Bolero - Having your own super fund can be a very good idea. But consider the following:

1. You need some super to start with, say at least 100k

2. You need good investing and business knowledge. Good enough to pick your own assets and make average or above returns.

3. You need good record keeping skills. The law requires this. This is also part of being good in business and investing.

4. You need a good accountant. The accounting, record keeping and auditing of the fund is important.

If you lack any one of the above points, then self-managed super will not be a good idea.
 
Bolero - Having your own super fund can be a very good idea. But consider the following:

1. You need some super to start with, say at least 100k

2. You need good investing and business knowledge. Good enough to pick your own assets and make average or above returns.

3. You need good record keeping skills. The law requires this. This is also part of being good in business and investing.

4. You need a good accountant. The accounting, record keeping and auditing of the fund is important.

If you lack any one of the above points, then self-managed super will not be a good idea.

Thanks bene. THIS I understand and already know. My question actually was: do you find it time-consuming to have a SMSF?
But thank you for your answer anyway:)
 
Thanks bene. THIS I understand and already know. My question actually was: do you find it time-consuming to have a SMSF?
But thank you for your answer anyway:)

It is of course more time consuming than having your super in a managed or industry fund. Self-managing anything is more time consuming that having someone else do it for you. However doing it yourself provides more flexibility.
 
Hi, I posted those figures merely to benchmark. Given that the property mkt may be flattening out depending on where one buys, there are other ways to invest.

$1500 = contribution per month x 25% [someone whose tax bracket is 40% will save 25% tax] = $375 per month
$1500 x 5% interest x 90% assuming tax paid @10% = $5.62 per month

Something like that.

The middle group [around 60-80 thousand p.a.] pays most tax.

For the smsf to work, the tax savings must be > $3000 so the contributions should be around $1500 per month = 18000 per year

It's interesting to take the example of a young man/woman with a high starting salary eg in the mines

Start with maximum contributions of 25 K
1st year tax savings = $6250 [@40% tax rate] interest earned = $1250
Year 2 ditto interest earned = 2562
Year 3 interest earned = 3940
Year 4 interest earned = 5387
Year 5 interest earned = 6906

See, in REAL terms, he pays only 22K less than 2000 per month. Say a young couple starting out each earning 100K, surely with 175K to live on, that's plenty. Then in a few years, the wife goes part time & contributions drop to 5K, where's the problem?

The fund with 125000 runs by itself. The nominal 5K or 10K contributions is merely to make it tax effective.

Sorry to bore everyone. In 1986, for a brief period, my super contribution was 25% & govt contribution 25% then the buggers dropped it to 17% /23%

KY
 
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