As published in The Q Review Spring 2020 Magazine. Follow the link to Subscribe and receive your FREE copy each quarter!
For the right person, with the right personal attributes and the right goals and ambitions, we love self-managed superannuation.
Self-managed super, as the name suggests, lets you take control of the last remaining areas of your business and financial life that have traditionally been kept outside your personal sphere of influence.
An analogy we use is that of going “off-grid” through the production of your own energy (through solar and wind) and collection of your own water (through rainwater management, springs and bores).
Because an SMSF can help you enjoy “off-grid” finances and wealth creation, removing interference in your affairs from external asset managers and super fund trustees and even in many cases, commercial landlords. And of course, in the right circumstances, and managed in the right way, an SMSF also gives you the chance to outperform and to get “ahead of the pack”.
Something that is rarely achievable via public offer funds.
Who SMSFs are Right For
As we have already alluded to, self-managed super is definitely not for everyone, in fact we would say the people who it does work for are in the minority.SMSFs are for people who are financially ambitious and are looking to build genuine wealth, above the average. And they are prepared to take personal responsibility for achieving those lofty goals.
…an SMSF can help you enjoy “off-grid” finances and wealth creation, removing interference in your affairs…
This most frequently includes business owners.
Because business owners have already demonstrated the ambition, the fortitude and the aptitude to take personal responsibility for their financial and lifestyle futures and therefore are best equipped, and usually most motivated, to take control of the remaining elements of their financial affairs still under the influence of outsiders.
Who SMSFs are NOT Right For
If you are not financially ambitious, and instead have only modest needs and aspirations in terms of wealth building and your future lifestyle, then an SMSF is definitely not for you.If this is you, you almost certainly do not find business, investing and wealth creation interesting nor motivating. And that being the case there is little to be gained by taking on the personal responsibility of managing your own superannuation savings.
In this case, you are much better off just leaving your super in a public offer fund, letting someone else make all the decisions. You will have to spend little to no time on it. You will likely incur low fees. And so long as your fund manager can at least keep you on par with everyone else, you shouldn’t fall too far behind.
Who can Establish an SMSF
Just about anyone can establish their own self-managed super fund if they so desire. They must simply meet the primary legal requirements as follows –
- You must be at least 18 years of age to be a party to the fund’s establishment and management
- At least half the members of your fund must be Australian residents (which means if you are to be the only member, you must be an Australian resident)
- You must not be bankrupt
- You must not have a criminal record relating to dishonest conduct
- You must not be subject to a civil penalty order
Watch out for Part 2 in coming weeks…
CapitalQ SMSF Specialists Pty Ltd holds its own AFSL (Number 488498) and each of its Directors, Duncan Melbin, Kapil Bhasin and Abhishek Puri are registered Financial Advisers. We aren’t stock pickers (taking the credit when the market goes up, denying responsibility when it goes down), we don’t sell insurance (though we believe in it) and we don’t charge based on a percentage of funds under management. We do give fee for service advice regarding your superannuation strategy. To check whether your accountant or adviser is authorised to give SMSF advice, visit the ASIC Financial Advisers Register at moneysmart.gov.au/financial-advice/financial-advisers-register.