Who has their own SMSF?
- Thread starter rodimus
- Start date
yes, I am interested in SMSF too.
For now though, I will thoroughly study all info I can about SMSFs.
And of course there is a possiblity that the laws will change again regarding SMSFs.
For now though, I am leaving my super in an industry fund until I feel more confident on what I need to do.
All I know so far that there is strict auditing, and breaking rules due to lack of knowledge is no excuse.
It does cost every year, I think about $2000 to run it.
And you have to have at least $200k - $300k plus in order for it to be worthwhile.
Right now I've had too many brain gymnastics with unwinding certain investments.
Once I get my breath back, I will slowly start educating myself about SMSFs.
For now though, I will thoroughly study all info I can about SMSFs.
And of course there is a possiblity that the laws will change again regarding SMSFs.
For now though, I am leaving my super in an industry fund until I feel more confident on what I need to do.
All I know so far that there is strict auditing, and breaking rules due to lack of knowledge is no excuse.
It does cost every year, I think about $2000 to run it.
And you have to have at least $200k - $300k plus in order for it to be worthwhile.
Right now I've had too many brain gymnastics with unwinding certain investments.
Once I get my breath back, I will slowly start educating myself about SMSFs.
It all depends on your investment approach. I only invest in a handful or so of "set and forget" older LICs and index funds (ETFs). I hardly ever monitor them except briefly when I want to buy some more. So only simple recording of dividends, payment of quarterly statements and levy etc, typing the occasional minute and spending a small amount of time putting together the paperwork come tax and audit time. The accountant usually passes what's needed on to the auditor. So in terms of time spent looking after the SMSF its hours per year for me rather than hours per day.
I would be very thrilled if IP related admin etc was as easy as looking after the SMSF.
However I personally wouldn't even think about setting up a SMSF with anything less than $200K.
Cheers - Gordon
SMSF's our way
This post reminds me of a retail super fund advertisement that goes along the line what would you rather do showing a couple out having a good time. The reality is if you let someone else manage your super be prepared to pay for that service +++$$$$. The retail funds will sting you 5% when you put it in and another 2.5% for managging it every year. So the first year you pay 15% contributions tax plus on average 7.5% to the fund. That's 22.5% of your money into government and retail sharks pockets. Is it any wonder that only 8.5% of men and 4% of women have more than $100,000 in their super?
As for the nonsense that you need to have $200,000 -$300,000 pull the other leg! We started with $6,000 in 1994 and our compound growth has been in the order of 31%
per annum. Except for the first two years when we played around in the share market we ignored the conventional advice and put all our eggs into commercial property as soon as we could fund the 20% deposit for the first one.
The industry funds are marginally better than the retail funds but the reality is unless you manage your money you can at best look forward to a meager self funded super with a part government pension
This post reminds me of a retail super fund advertisement that goes along the line what would you rather do showing a couple out having a good time. The reality is if you let someone else manage your super be prepared to pay for that service +++$$$$. The retail funds will sting you 5% when you put it in and another 2.5% for managging it every year. So the first year you pay 15% contributions tax plus on average 7.5% to the fund. That's 22.5% of your money into government and retail sharks pockets. Is it any wonder that only 8.5% of men and 4% of women have more than $100,000 in their super?
As for the nonsense that you need to have $200,000 -$300,000 pull the other leg! We started with $6,000 in 1994 and our compound growth has been in the order of 31%
per annum. Except for the first two years when we played around in the share market we ignored the conventional advice and put all our eggs into commercial property as soon as we could fund the 20% deposit for the first one.The industry funds are marginally better than the retail funds but the reality is unless you manage your money you can at best look forward to a meager self funded super with a part government pension
Would you let someone else manage your property portfolios or do you manage them yourselves
I have just started my self managed fund and I think I will beat the current performance by any of the other funds
Considering the state of the sharemarket and the losses funds are having
I could puy my 350k in the bank and get 7.8 interest with very low risk during this volitility
I will sleep better at night
I believe you should never let anyone look after your money at the end if they blow it they will have excuses but you will be the one who will suffer
I have just started my self managed fund and I think I will beat the current performance by any of the other funds
Considering the state of the sharemarket and the losses funds are having
I could puy my 350k in the bank and get 7.8 interest with very low risk during this volitility
I will sleep better at night
I believe you should never let anyone look after your money at the end if they blow it they will have excuses but you will be the one who will suffer
Difference between an industry fund and retail fund
Hi Rodimus; A retail fund is a fund that operates for profit and is usually controlled by a bank or insurance fund. They charge fee's when you put your money in usually around 5% and around another 1.5% to 3% yearly, regardless if your money invested increased or decreased that year. Some charge exit fee's as well.
Industry funds are usually controlled by groups of similiar occupation and often are union based. Their fee's are lower usually no entry or exit fee and ongoing annual fee's range from .75 to 1.5%
The problem with both these models is they are not tailored to someone who wants to control their own investments. The retail funds will tell you that you can and charge you a higher fee but again you are offered their tranch of investments which is driven for their profit
Hi Rodimus; A retail fund is a fund that operates for profit and is usually controlled by a bank or insurance fund. They charge fee's when you put your money in usually around 5% and around another 1.5% to 3% yearly, regardless if your money invested increased or decreased that year. Some charge exit fee's as well.
Industry funds are usually controlled by groups of similiar occupation and often are union based. Their fee's are lower usually no entry or exit fee and ongoing annual fee's range from .75 to 1.5%
The problem with both these models is they are not tailored to someone who wants to control their own investments. The retail funds will tell you that you can and charge you a higher fee but again you are offered their tranch of investments which is driven for their profit
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D.i.y.
Hi BillC;
We have gradually shifted to managing our own properties because when there has been problems the agent has come back to us for direction. Also with commercial property the tenant is responsible for most of the outgoings and maintenace. The 5-7% management fee charged by the agent is better retained in the property trust and used to employ an agent when you require a new tenant
Hi BillC;
We have gradually shifted to managing our own properties because when there has been problems the agent has come back to us for direction. Also with commercial property the tenant is responsible for most of the outgoings and maintenace. The 5-7% management fee charged by the agent is better retained in the property trust and used to employ an agent when you require a new tenant
Love our SMSF - we have had it now for over 10 years. I do spend a lot of time managing it, and doing the research, and we pay an accountant to do the books and an independent audit. This amounts to about .6% of the total accumulated funds. The more in the SMSF the lower the % of Accounting fees. And it has done better than the ASX in terms of growth over the last five years when I took over the management of it. Also, 120% CG in a block of land purchased in it and held for four years. So yep, pretty pleased with it all.
When I created my SMSF, it was a good thing to do. It was simple and cheap to get into, and to maintain (despite a low amount in my SMSF, as compared with the industry standard).
But compliance costs increased. Substantially.
It's no longer worth it.
But I have some illiquid investments. So it may be difficult to change.
And I do not see things getting better.
They used to suggest that a fund of $100k was good for setting up an SMSF. Lower than that, you could do better just investing somewhere else, where you had no control, for lower fees. I thought that my $50K fund was still OK.
I was wrong- because compliance rules changed, and it costs me substantially more to get the SMSF audited than when I set it up.
Why does someone my age (54) have such a small SMSF fund?
Because, under the rules 20 years ago, you could change your job and collect your unused super. And I used mine to visit the beautiful lady I had fallen in love with.
I would not have changed anything I did for any reason whatsoever.
My retirement (and all the years leading up to it) will be far better because of the irresponsible way I did things
I have a partner who I am still in love with, after 20+ years.
But compliance costs increased. Substantially.
It's no longer worth it.
But I have some illiquid investments. So it may be difficult to change.
And I do not see things getting better.
They used to suggest that a fund of $100k was good for setting up an SMSF. Lower than that, you could do better just investing somewhere else, where you had no control, for lower fees. I thought that my $50K fund was still OK.
I was wrong- because compliance rules changed, and it costs me substantially more to get the SMSF audited than when I set it up.
Why does someone my age (54) have such a small SMSF fund?
Because, under the rules 20 years ago, you could change your job and collect your unused super. And I used mine to visit the beautiful lady I had fallen in love with.
I would not have changed anything I did for any reason whatsoever.
My retirement (and all the years leading up to it) will be far better because of the irresponsible way I did things
I have a partner who I am still in love with, after 20+ years.
i have an SMSF.
i invested in original australian artists and rent the paintings out for about 7.5 - 9.0% pa.
also have money tied up in cash and also trade futures with a bit of it as well.
i invested in original australian artists and rent the paintings out for about 7.5 - 9.0% pa.
also have money tied up in cash and also trade futures with a bit of it as well.
Geoffw said:
Someone should send her those comments. But she probably doesn't need to be told eh Geoff? I did the same, left Canberra and took my public service Member component to partially fund getting to Melbourne to my gal. 18 years ago now (how time flies...) Now my other super components sit there revolving around the CPI. Thankfully, I've built it up elsewhere quite nicely since.
Ditto your comments re SMSF. They were all the rage, and I still cannot see the point unless you want to specialise in a particular (alternative) investment area, and have the skills (bit like Blue Card above). The 'control' argument does not wash with me, as the Sole Purpose, In-house Assets, Arms-Length and non-borrowing rules effectively control what you can do. It'd take a massive super balance to beat Industry fund costs (including insurances). But, people persist. Each to their own.
Hi Guys,
There was a similar thread;
http://www.somersoft.com/forums/showthread.php?t=40620
I've set my SMSF up and have bought property with it making over 35% on it in a little over 18 months. I've never trusted Managed SuperFunds and love the flexibility this gives me.
There was a similar thread;
http://www.somersoft.com/forums/showthread.php?t=40620
I've set my SMSF up and have bought property with it making over 35% on it in a little over 18 months. I've never trusted Managed SuperFunds and love the flexibility this gives me.
Obviously I dont agree with your comment about the control issue. Persist? Yeah, I like persisting in things that make money. Last year the accountant compared the growth of my SMSF (not the contributions put in, but actual growth) with an Industry fund and I was ahead, miles ahead. Why would I go back to letting others manage it, and charge me for it? And as I said, my accountant and auditing fees amounted to .5% - what Industry fund can do that? Massive? What is massive? The fund started with only $50k like Geoffs, and we we certainly haven't put in any more than $20k contributions a year since it started. So while the SMSF has some good money in it, I dont see it as massive.
In the super fund we bought a waterfront block of land in 2000 for just over $100,000 and sold it four years later for around $220,000. This is the sort of strategy you can use when you are the trustee for your super fund. Currently we have Marina in it - if we sold it at current value(have only had it for 3 months) we would already have 20% profit!
I had no superannuation until the fund started in 1992 I think. Now I can retire (when I am old enough) on the income I want in retirement. There is no way that would have been the case if I had stuck with a generic super fund. No way!
The control element is not only about where you can put your funds, but how well you manage them once they are in.
I am lucky too - I met my partner while at Uni when I was a broke student, so he didnt cost me anything! And we are about to celebrate our 30th wedding anniversary in June!
In the super fund we bought a waterfront block of land in 2000 for just over $100,000 and sold it four years later for around $220,000. This is the sort of strategy you can use when you are the trustee for your super fund. Currently we have Marina in it - if we sold it at current value(have only had it for 3 months) we would already have 20% profit!
I had no superannuation until the fund started in 1992 I think. Now I can retire (when I am old enough) on the income I want in retirement. There is no way that would have been the case if I had stuck with a generic super fund. No way!
The control element is not only about where you can put your funds, but how well you manage them once they are in.
I am lucky too - I met my partner while at Uni when I was a broke student, so he didnt cost me anything! And we are about to celebrate our 30th wedding anniversary in June!
For the property investor a SMSF can be a tool to reduce CGT. If you sell an IP with large CG, then you do everthing legal to reduce the tax payable os those CGs. (Timing of sale, pre-pay interest etc). One possible avenue is to contribute to your SMSF. After 55 you can then withdraw a certain amount tax free. After 60 ( under current rules) I think it's all tax free.
Trouble with SMSF is today's rules are tomorrows fish wrapper.
LL
Trouble with SMSF is today's rules are tomorrows fish wrapper.
LL
I enjoy an SMSF and many clients do to. Principally most of my business clients use them in conjunction with their own commercial premises. The flexibility and control that it gives them is simply beyond comparison.
In the right hands an SMSF is fantastic regardless of the $ balance. When its not understood, then they can be disastrous.
In the right hands an SMSF is fantastic regardless of the $ balance. When its not understood, then they can be disastrous.
Pushka said:
Mine. Last year my fees were 0.4573% of the balance. That included income protection insurance and life insurance costs. I assume your figure didn't.
That said, if you're happy then that's what counts. My comments stem from the sad fact that many, many people did it/do it for the wrong reasons. They thought they could do what they liked. There are still people (and not just a few) trying to sell their PPOR into their super funds, purchasing rubbish art and hanging it on their bedroom walls, buying holiday homes by the beach and letting it to fund members (or worse, staying there themselves).
Pushka said:
That's a rather generalised and unproven statement to make at this stage. But I get your drift. You beleive you will have a better retirement. Let's hope so.
Agree. They are well worth it in this scenario.MattR said:
Different issues. There is no benefit in selling a privately held IP and trying to contribute those funds to a SMSF. CGT on sale is assessed outside the SMSF, just like any other asset sale owned by you personally. The contribution on sale receives no benefit for CGT purposes. Withdrawals of super after post-preservation date and a release trigger are tax free for all contributons.landlubber said:
OK, that got me thinking. I used CBUS Pdf as a guide, and excluding Insurance, for the same amount of Superannuation, their fees came in at .7%
Phew, got that bit right.
Definately agree with you there, and they are making it harder for those who follow the rules.
I think for me it is more of a case that a few years ago I could not see why it was worth sacrificing income, to put into super. It just kind of disappeared into 'an account' with annual statements. Now I can see it grow (mostly!) make decisions, I see that when I salary sacrifice the money appears in the Super fund, so I guess it just makes it far more compelling for me to put money into it. So I do.
