Self Managed Super Fund (SMSF) and Property Investment
The biggest advantage in having a Self Managed Super Fund (SMSF) is that you have the opportunity to purchase a *direct property investment. Buying a property through your Superannuation has not been an option until relatively recently.
Most people in Australia have money in and contribute to a superannuation fund either through voluntary contributions, also know as concessional contributions or employer contributions under the superannuation guarantee. The problem with this is not that the money is accumulating, but that most people lack wise financial management of these funds, or neglect them. It is a sad reality that many Australians will retire with less than the required amount of superannuation that they require to live comfortably.
An SMSF's greatest benefit is that they force the trustee to be engage with the management of their money, whilst at the same time open up flexibility and control over where the funds are invested.
In recent years, Australians have watched in horror as their retirement funds have plummeted in value, along with their dreams of a happy, secure retirement. This was partly due to neglected superannuation funds which where spread across global financial markets (in the name of diversity). Unfortunately those exposed to risky markets lost big.
Managed Super Funds have now grown in a grand way and all fund managers can do is ride the markets up and then down. They simply cannot sell enough shares to quickly change the balance of their portfolios. All you can do as a fund member is watch, hold on tight and cross your fingers that the market is ‘up’ when you retire.
Property has long been the number one source of wealth for many Australians. Donald Trump once said that 'understanding property investment is essential for all individuals to attain real financial independence.'
Until recently, it was almost impossible to get a property-based portfolio in a Managed Super Fund, so for many years investors in Australia were denied the benefits of property in Super Funds. But things have changed.