Page 95 - Smart Money

Smart Money

Once you have accrued a certain dollar figure, and again it is different for
everyone, but usually around $50,000-$60,000, you really should take
it a little more seriously than just getting the statement and putting it
to one side. You should look at opportunities to invest with funds that
have greater diversification, more investment options, more bells and
whistles, more things that you can do with your funds to take greater
ownership of them.

The natural progression beyond that is your self-managed super fund
(SMSF), and that tends to be for people who have specific desires that
can’t be met by your standard superannuation offering. They want direct
property in their fund; they want direct shares in their fund; they want
to potentially borrow money to leverage their superannuation and grow
it at a more significant rate; or they just have very specific investments or
assets that they want to have in their fund that your normal retail offering
doesn’t provide.

Key Point

There are tax benefits for superannuation and insurance. Super is a
very good cash flow management and tax management tool. The

government has put limits on our annual ability to put money into
superannuation, but it does provide fairly generous tax concessions
within those limits.

An accountant or a tax professional can suggest levels of contributions
and their tax implications. The next logical step is to speak to a
financial planner about the two phases of superannuation – there is the
accumulation phase while you are growing it and accumulating, and then
there is the pension phase when you start drawing from it, and again,
there are tax implications on both ends.
You should never start a plan without knowing where the logical end
point is, or what the final implications are. Speaking to a financial planner
and/or a tax advisor will help you identify the benefits going in, but also
ultimately what is going to happen at the end when you retire.