My dad is 70 and is still working and has a lost close to 10% of his super money due to COVID-19. Now i know there are risks in any form of investment but i cannot help but think that there are some better shares that one can invest in using their own knowledge as oppose to relaying on the industry super funds who lets not kid ourselves don't particularly care.
How Do You Set up a SMSF?
MR-AM on 31/08/2020 - 11:06
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if he could outperform super fund managers he wouldn't still be working at 70. if he wants less risk he can always consider his investment options within his super fund
Fixed income as well the conservative funds. If the intention is to pick one or a few shares, with the false perception of outperforming fund managers, you are probably have better luck + less time wasted making a visit to The Star, result is almost immediate.
It will cost a around $1,500-$2,000 to set up a SMSF and then around $3,000 in annual ongoing costs.
See an accountant to get it done properlyMy dad is 70 and is still working and has a lost close to 10% of his super money due to COVID-19.
SMSF annual cost of accounting & ATO levy is like $1k+. Is taking the pot + expected returns - compliance going to put your dad ahead of the super fund or you just going to be feeding accountants and the ATO?
Now i know there are risks in any form of investment but i cannot help but think that there are some better shares that one can invest in using their own knowledge as oppose to relaying on the industry super funds who lets not kid ourselves don't particularly care.
"Own" knowledge? I'd do some serious research into biases. People are over confident of their own abilities. Even professional fund managers under perform the index.
If you take the ASX200 index (or S&P500) and with the super money what you are going to make on average over 10 years and deduct cost of compliance if you are better than 10 year average of the industry super fund then by all means do it.
Not all fundies "underperform" the index. Index is the mid point "benchmark". fundies both over and under perform.
Not all fundies "underperform" the index
Problem is you buy the index ETF it is 0.2% charge. You buy a managed fund 0.6%+ (if not 1%) they got to be good and 50% above the index, 50% below the index then add the 0.4% fee difference then majority under perform the index.
Index is the mid point "benchmark"
Most funds use the index as a benchmark. The index is not a midpoint. The index is basket of all the stocks in the index. Index is the index it is not the average of all "fundies" or benchmark funds.
fundies both over and under perform.
How confident are you to pick the ones that consistently over perform? What happens if the index drops 20% and your fundy drops 18%. Still outperform the index on the down side.
I am all for investments as long as you know what the risk is.
"Setting up an SMSF" is not the road to "not losing money" … in fact, in quite often can lead to quite the opposite.
Your dad has lost money in his super due to his exposure to asset classes (likely Australian and international equities) that have declined in value over the period you are describing. If you wish to "stop losing money", your dad could simply move his investments within the fund to lower risk assets that will produce lower returns over time, but will be far less likely to go backwards.
Many people think they can "beat the market" by investing themselves. Maybe they can. But, consider whether or not they honestly believe they can beat investment professionals over the long term … and ask themselves whether or not they would be equally comfortable self-diagnosing and self-treating the medical issues rather than relying on relevant medical professionals.
My dad is 70 and is still working…. but i cannot help but think that there are some better shares that one can invest in using their own knowledge
Age 70 is definitely not the time to be messing around with someone's superannuation balance. Especially how you "cannot help by think that there are better shares.." You don't sound so sure yourself and you definitely run the risk of screwing things up even more.
If your dad isn't sure on what to do, he should seek some professional advice as soon as possible.
Transfer to Australian Super, they have plenty of preset investment options and even allow you to get super complex marginal % by % if you desire 👍👍
If you intend to be the investment "manager" for your dad's (possible) SMSF then how will both your dad and yourself feel if your investments backfire?
Do you have a proven track record in investing, particularly over such a relatively small investment frame as your dad will have (15-30 years - hopefully 30).
At his age, he should be investigating a transition to retirement scheme where he draws down super while adding to it (unless he earns an absolute crapload).
What does his accountant or financial planner think of the idea?
I've been an active investor in shares since 1987 and I still trust my super with "the experts" even though I know they make mistakes and even do outright stupid things in the name of expansion. (I'm looking at you Aware Super).
My current investment split is cash 15%, Super 60%, shares 25% plus my PPOR. All of them except cash went backwards due to COVID but have recovered significantly. There's some irrational exuberance in the market at the moment so who knows how long it will last.Be careful, it's your dad's life savings.
Also, the obvious questions are:
What's his fund?
What investment choice is he in?
Is it 5, 6 or 7 figures.
When does he plan to retire?
Does he want your help?
I just wanted to know as to how does one go about setting one up. The banks to me still represent great value in terms holding for the next one year. People often only compare to the stocks we have on offer and forget that there are companies all around the world that you can buy. I've been trading actively in the US, the likes of TSLA has gone up 60% this month alone and Apple is doing great as well. Certain companies are recession proof and you just need to know which ones to invest in. I know there will be people who will say that you don't know crap… Another example i can give is Z1P, now who on here bought this when it fell to $1.05 back in March? Look at the price today it's $9.13. A small $10,500 investment could have turned into $91,300 in 6 months. APT is another. I had 2000 units at an average of 12.25 when it was going down and look at it now? $93! Sometimes you just have to back yourself, you might not get it right and investing in this present market has its risks but there's money to be made.
Wake up calls like these are priceless and just what the markets need.
Wall Street tumbles on major tech selloff
Wall Street ended significantly lower yesterday, as major tech companies registered significant losses, due to a profit-taking selloff. Apple tumbled more than 8%, Amazon fell more than 4.6%, Google slipped 5% and Tesla finished more than 9% lower. As a result, major indices finished in the red, as the DJ30 closed 2.8% lower, the SPX500 fell 3.5% and the NASDAQ100 finished nearly 5% lower. This morning, futures point to more losses when markets open. Wall Street may also be affected by job data, including the NFP report, to be released at 12:30 GMT.Lol. OP essentially repeated what my "self found professional" friend has told me back when Blackmore was on a rocket propeller.
I know a few fundies are active ozb users. :)
As a starting point:
https://www.ato.gov.au/super/self-managed-super-funds/settin…A couple of SMSF administrators (including set-up and admin):
https://www.esuperfund.com.au/fees/special-free-offer
https://www.superconcepts.com.au/smsf-administration/full-se…Or, have a chat to an accountant you are happy with.
Also, have a think about using some of the direct share options in large Industry and Retail/Wrap super funds if all you are after an SMSF for is share trading:
https://www.australiansuper.com/investments/your-investment-…And, just in case:
https://www.ato.gov.au/super/self-managed-super-funds/windin…Thanks heaps :)
just curious - has anyone compared ING Super vs Australia Super?
ING Super appears to be cheaper - $60 p.a fees and 0.25% fund mgmt fees
Who manages ING's fund?
i'm actually more interested in ING Super's access to buy Blackrock + Vanguard ETFs. ING seems to have the cheapest account fee ($60 p.a) and fund management me than Australian Super. Correct me if i'm wrong please.
Maybe have a look at Australian Super. You can only invest in the top 300 shares but it will be cheaper. That said you need to know what you are doing. Does your father invest in equities and have a good understanding of financial markets. I would also have thought at 70 years of age your fathers risk profile would be conservative, which equities are not.
I'm interested to know what better shares you would buy/ have bought? I would think a lot of these would be down more then 10% since COVID.