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Decisions, Decisions: To Invest or Not Through SMSF?

ByAnthony Hendriks

Jun 23, 2017
retirement savings

Decisions aren’t always easy to make, particularly those that have a longer effect and affect our future as well. However, lucky for us Aussies, we have a little help when it comes to securing a good financial future, and this help is in the form of an SMSF.

Stats don’t lie, and what they show is increasing interest in this superannuation, even among young people, with about 600.000 self managed super funds in operation and $653.8 billion in assets according to the ATO (Australian Taxation Office), APRA (Australian Prudential Regulation Authority), with a remarkable growth of 55% of SMSF assets. Taking into account thousands of SMSFs are established every three months, these funds surely are the future of Australia.


The reason for this lies in the reliability, the suitable conditions, the chance to manage such a fund on your own, as well as the possibility to use it to invest. However, you have to be wary of all the rules and regulations set out by the ATO so you make sure you don’t breach any and end up losing the credibility of your fund.  Speaking of investments, even before you can take this step, it’s important to get the properly tailored investment strategy Smsf, and you can do so with the help of professionals with years of experience in the field.

The possibilities of investing through your SMSF are vast, giving you the choice to choose investing in cash, property or shares, locally and internationally, but before you can invest, you have to make sure your fund complies with the sole purpose test, have the investment strategy Smsf objectives clear, based on the financial needs of every trustee, and only then carry out with investments closely monitoring their performances. Of course, it doesn’t just take making the decision of investing, but also being in the know of what exactly it is you’re investing in.

In order to be able to get the proper investment strategy, the well detailed financial plan, you have to take certain aspects into consideration, such as the age of every trustee, the retirement expectations, the fund’s liquid assets and cash, the potential risks, and income fund requirements to name a few. The reason more people are encouraged to use the funds to get to investing is because of the more suitable borrowing rules, unlike some years ago, as well as the growing fund balances.

The option to invest in properties is one that’s tax effective, but bear in mind you should be careful with buying property from a member, unless it’s a property that’s used in one or more businesses, then be careful with letting one of the trustees use the property, steering away from use for his or her own needs (never use it to live in it or use it as a holiday home) – everything must be done in accordance with the sole purpose test.

Share investments are great long-term, especially for capital gains, and saving on tax, but remember they can fall unpredictably low, meaning if this happens you may not get your money back, depending on the companies you invest in. So, whatever decision you make, first look into the matter carefully with professional assistance.

By Anthony Hendriks

The life of the party, Anthony is always up for spending some time with family and friends, when not blogging of course! Ever since a child, his love for books of mystery, race cars and travelling keeps on growing so it's difficult for him to single out that one all-time favourite hobby. If there's one thing he hates, though, it's having pictures taken but you already guessed that from his choice of plant photo for the blog.