How are you tracking with your Retirement Savings?

The purpose of bringing this to your attention is to make you aware of and cognoscente of the fact that something can be done!

There are always solutions; we only need to understand what that solution might look like which best fits your own situation and circumstances.

New analysis based on figures from the ATO on retirement savings demonstrate that men will have around $154,450 and women only $122,850 in their retirement balances between ages 60 – 64. Not much is it?

Sure you may have more, BUT the question is will it be sufficient to give you the life you want and deserve and for how many years will it last when you are unable to continue to save?

Wow, about 18% of 66 year olds are still working and this figure is likely to continue to grow. Meaning a lot of people have not catered sufficiently for their retirement. And 38% of 66 year olds are retired and living totally off their super and other savings. Difficult to estimate what percentage of these people will run out of money during retirement though.

You may qualify for the state pension, but can you really live the way you want to on this low amount?

You may also have a home which is paid for but costing you more than you are comfortable with in rates, upkeep, garden and home maintenance, electricity, water and more. This could be a drain on your retirement savings thus restricting you from doing what you always dreamed of doing in retirement.

There are solutions, you just have to reach out to us

We could go on and put more fear into you, this is not how we best serve our clients we rather focus on solutions. So if the above presents as a concern for you and you want more at retirement then reach out to us so that we may get a better understanding of where you are now, where you want to be and by when. Having this understanding is important to us and you as it will provide us with probable solutions and solutions that could ‘best fit’ your requirements which in turn will add new value to your retirement destiny.

Solutions are varied and may prove to be a mix of strategies from reviewing your family home, your super, savings plans, shares, properties and more.

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How much do I need in Super to start my own SMSF?

How much do I need to set up my own SMSF

and what do I need to know?


  The Royal Commission has ignited a lot of talk in the media surrounding Self Managed Super Funds raising more questions than answers We are not financial planners nor sharing financial planning advice merely quoting sources and or using basic logic in what we are sharing with you   What we do know is that industry funds (generalised) tend to perform at 5% to 7% per annum over the long term + fees, where in your own SMSF you have a wide choice of investment vehicle and can therefore be more hands on with our own Super destiny   NB : It is important to find out what all the fees/costs are being charged to you now wherever your super is being invested. Allows you to compare to what you could be doing and the fees there   There are investment platforms out there where there are no minimums, but before you set up your own SMSF you need to realise that there are some upfront costs for setting up the SMSF and also a SMSF requires annual audits which also cost money   What this means to you and your super is that once you understand the upfront and the ongoing then work out the minimum you would require in super that not only covers your annual audit / accounting fees but also give you returns in excess of average super funds performance   Set up fees could range between $700 and $2,500 depending on complexity and purpose and annual costs for Admin & Audit from around $665 to $1700 for basic SMSF’s and higher for more complex Self-managed funds and some other minor fees Meaning that the lower the balance the higher the cost as a ratio, thus requiring investments to cover costs and return an ROI you are comfortable with   You will have heard a figure of $200k required by ASIC  as a minimum to have your own SMSF, this figure used to be a recommendation and not a legal requirement If you have an amount you are comfortable with knowing you could achieve the financial return on investment you want then having control and choice over your retirement wealth is imperative to enhancing your retirement goals. This is why there as so many SMSF’s registered with Billions of Dollars under Self Manged Super Funds management   You may encounter negativity from your financial advisor and the media (it’s their job) however an advisor is obligated to put your interests ahead of theirs or the conglomerate they represent, your own research and due diligence will allow you to come to an informed decision   Once again : the amount you have in super, the rate of return you are getting versus what your research indicates you could get, less upfront and ongoing fees should help you determine what is the correct strategy and investment vehicle for you and your family   Other aspects for consideration could include : how best to maximise your wealth in retirement planning, what flexibility do you have and want, the varying investment vehicles available to you giving you a wide array of choice and thus control when comparing where the funds are invested now and what choice, control, flexibility, return on investment and ongoing fees   If you are unable to do the comparisons and calculations speak to your financial advisor and or your accountant or ask us for a referral to a reputable professional who can assist you so that you can make your very own informed decision of how you want your monies in Super to be working for you  

Whilst Planning

Did you know that a major advantage of investing in a property within a SMSF is that you are able to Leverage?   What this means to you and other SMSF members is that you can invest only 20% (or more) yet achieve Capital Growth on 100% of the property value + your tenant will help you build wealth by paying rent and depreciation can be deducted against Super contributions further lowering the tax on contributions   The numbers which are underpinning an investment in property could return you around 10% to 17% per annum – *depending on the type of dwelling, rent, interest rates, deposit, capital growth etc, we can help you estimate the cash flow
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Sydney too expensive to Invest in? Where should I invest?

Sydney too expensive to Invest in?

Sydney Return on Investment continues to drop, property values exceptionally high & rental yields exceptionally low as a percentage in most sought after locations in Sydney

Investing in Sydney might not make investment sense to you with rental yields fallen way behind the Capital Growth as Sydney peaks in value?

Are you comfortable investing outside of where you live, if so and you merely view the property purely as an investment vehicle – your strategy would be worthy of including Brisbane, South East Queensland or Melbourne in your portfolio. Most of our online inquiries are coming out of Sydney and for QLD property …

Why?

Better value for your Investment Dollar + capital growth potential + Higher Rental Yields mean you get more for your investment in terms of property + yield and thus return on your Investment dollars working hard for you

 

Did you know :  Brisbane needs to accommodate another 1 Million Residents by the year 2031 requiring 30,000 new dwellings per year !

Ignore the Press : Brisbane on the Cusp of a Once-in-a-Generation growth opportunity on the back of massive Infrastructure Investment, new Job creation and a continued strengthening Population Growth where Vacancies are exceptionally low and Rental Yields very strong  read blog here

 

 

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Industry Super Funds continued Poor Performance and ongoing high fees

Buying property in Super

Why set up your own Self Managed Super Fund?

Industry funds dismal long term (lack of) Performance :

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Industry Funds results from 1996 to 2010 :

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  • corporate funds on average provided returns of 5.84% pa
  • industry funds 5.35% pa
  • the public sector funds 6.30% pa
  • and retail funds 3.66% pa

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And … more than 150 of the growth funds tracked by Morningstar have not earned more than 3.5 per cent a year — or 1 per cent above inflation — over the past decade. These funds contain about $16 billion of workers’ retirement savings.

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Thirty-three funds have delivered average investment returns of 5 per cent or more for the past 10 years, including some of the biggest funds.


“Ask yourself how does this help you create sufficient retirement income on your super contributions?”


It is widely known that Industry Super Funds attract ongoing annual fees which are further eating into your own retirement value. What most investors don’t consider is that you pay your Fund Managers every year even in years where your fund goes into negative performance. You are paying for this privilege – why??

  • In your industry fund, not only are you achieving dismal long term performance results on your own retirement funds but if you have $125,000 in your current super, ONLY this $125k is working for you!

Wouldn’t you prefer to take advantage of the power of Leverage; whereby you invest say only 20% of the value of the property and have the bank and a tenant fund 80% of the investment meaning you now have an Asset of over $500,000 working for you in your own SMSF and you only invested around $100k for the privilege


Compounding Returns on Investment

Compounding Returns comprise of Interest being earned on top of Interest for the life of the investment; the longer one invests this higher a compounded return will be … we agree

Based on the above returns of 5% pa, $100,00 invested in your Industry Super account would have grown to $1.54m in 15 years (excluding Industry Super annual fees for this exercise) but if the return was 10% per cent pa, the balance would only be $.51m over this same period

What this means to you is that being in control of your own Super Destiny you could be better off by over $900,000 this time in your own pocket!


“This is serious stuff you would agree!”


What if you set up a SMSF (Self Managed Super Fund) and secured a prudent investment property which generated a return on investment of 10% pa; can you imagine the returns on your investment at a regular 10% pa versus industry averages of a dismal 5% pa?!?  Could equate to over a Million $’s over 15 years more in your own pocket


How will a 10% compounded over 10 years or more positively effect your retirement lifestyle. What will this mean to you?


*This is not rocket science nor financial planning advice; merely using Logic and industry statistics

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SMSF Investment Property

Self Managed Super Funds and Investment Property

SMSF Property Investment

More people want to take control of their own Super destiny and wherever they turn, they are reading about “Leveraging and Investing in a Property within a SMSF.”

Compared to other asset classes which generally cannot be leveraged, it’s not hard to see why many investors are now ‘investigating and talking to a financial planner or you about buying property in their Super Fund.’  And we have not even mentioned the incredible Tax Advantages …

Over 2 years ago we predicted that Self Managed Superannuation Funds (SMSF’s) would become a big driver of the Australian property market.

Since then, other commentators and the finance industry as a whole have woken up to the trend, and have begun to realise the massive influence SMSF’s will have in the property market over the coming years.

Property investing under Self Managed Super Funds has entered the mainstream. In the last 12 months it seems like everywhere you look there are ads promoting property investment through SMSF’s – even on TV!

“Why invest in Property in a SMSF and what is so appealing to put a property into one’s Super?“

Leverage: the ability to BORROW money to get the bank and the tenant to help pay off a large slice of Retirement Savings + Tax Benefits !

 

SMSF lending is ‘limited recourse’… In other words, a borrower’s ability to qualify for a loan under an SMSF has very little to do with what they personally can (or can’t) borrow outside the SMSF. It means that even if an investor is personally maxed out on their borrowings outside their SMSF, they may still be able to borrow money for investing within their SMSF.

Most people still don’t realise just how big SMSF’s are becoming with more and more adverts and thus enquiry coming to the fore, values of property could rise according to demand!

Over the last 5 years, the rate of growth in SMSF’s has massively outpaced growth in managed funds. There are now close to half a million registered SMSF’s in Australia
SMSF owned Assets represent almost a third of all money in superannuation within Australia. Property is beginning to make up a large proportion of assets in a SMSF for obvious reasons! The property market is once again on the rise, population in Australia continues to grow, rental yields continue to increase … why wouldn’t you own a safe portfolio in bricks and mortar being mostly paid for by your tenant and the tax man with help from your bank!

Around $15.5 billion of SMSF assets are already invested in residential property, making up around only 3.5% of the estimated $439 billion in SMSF’s – the potential for the Property Market is Immense.

 

The opportunity to own a Positively Geared Investment Property in one’s SMSF is here, meaning after your initial deposit, whether you continue to contribute towards your SMSF or not, the income is higher than the outgoings. Another reason to invest in bricks and mortar.

 Are you aware that potentially it is not all coming up roses investing through other channels and you should be talking with property professionals who have your interest at heart. Not all property makes for a prudent investment!

 This is where we come in. By now you will have an understanding that we always put your clients first and that we have access to property Australia Wide; giving you choice and enough supporting information based on our own due diligence PLUS encourage you to undertake the same amount of their own due diligence prior to making an Informed Decision.

 Investment Property | SMSF | Leverage using the banks money and your tenants rent to contribute towards your retirement planning goals

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Self Managed Super Fund’s and Investment Property

SMSF and Investment Property

…what you would want to be aware of!

 

Investment Property in your SMSF

The STATE REVENUE OFFICE has clearly warned trustees of SMSF’s that he will be focusing on SMSF and investment property out of concern that trustees are making ill informed investment decisions on behalf of their SMSF’s!

 

The purpose of this blog is to remind you and enlighten you on the benefits of securing and investment property for your SMSF where the numbers actually stack up. This will mean you will be better off by thousands of dollars at retirement; by making an informed decision based on the underlying fundamentals and numbers underpinning the potential property.

The recent Financial Review article warns investors/trustees about two major issues in SMSF space with regards to investing in property; a most welcome article highlighting the fact that ‘trustees don’t seek advice upfront often leading to poor investment decision making which will attract the attention of the SRO’.

We urge you to take the view that if you are going to make an uninformed decision (which is unfortunately what most tend to do, putting emotion ahead of the financials) then perhaps you have an obligation as Trustee to your SMSF (and the Tax Office)  and thus take advantage of services such as ours prior to looking for your preferred investment property.

 

Does the property you are looking at have the correct Fundamentals in place?

The question is : “Are you giving yourself choice of an alternative solution to potentially make a better more informed and astute investment decision?”

An Investment decision that will benefit you by Thousands of Dollars. This is why more and more accountants, financial planners and mortgage brokers are now introducing their clients to services such as ours.

You will avoid the above pitfalls whilst we save you time, stress and probably money using our professional services, in working with you to help find what we call a ‘best fit’ investment property that matches your goals, investment strategy and overall SMSF and personal objectives.

 Did you know that securing a new property over an existing older one will result in your investment being thousands and thousands of dollars better off over the investment period?

See figures in example below :

SMSF Property

Increase the end value of your retirement by making an Informed Decision upfront

Your Investment  will be better off based on :

 demonstrating the above figures;   providing you with a selection of ‘best fit’ properties + due diligence and market reports on why these properties;   implementing our personal objectives of encouraging our clients to make an informed decision(using our industry knowledge, expertise and due diligence);  and inviting you to undertake your own due diligence on our recommendations.

  … the reality is that our system is deliberately designed to ensure that you will make more astute investment decisions!

  • than if you went to your local estate agent or a financial planner who is trying to flog you a property they have access to; both will tell you exactly what you want to hear so that you put down a 10% deposit and buy that property

 

Ask those in the know how you could maximise your Investment Returns

Our primary role is to explain how the numbers work, provide you with a selection of best fit properties that match your investment objectives, in your preferred locations (across Australia) and work with you so that you as the Trustee of your SMSF  make an informed decision whether that be a no or a yes, to options on the table.

There are other ways to perhaps achieve better results for your SMSF.

We look forward to your questions and feedback

Helping you grow your Retirement Value whilst exceeding your expectations of us. We assure you of our prompt and personal attention now and into the future.

 

Wanting to set up your SMSF?    Free consultationclick here

 

SMSF Property FundamentalsWhy a SMSF, tax advantages and Why an Investment Property…  more

 

Comments or questions are welcome.

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