"Discover how you may be able to conservatively INCREASE your Australian Super Fund yield?
Instead of receiving dividends through managed funds, have you considered buying high quality commercial property in your super fund to create a passive retirement income stream?
Your Invited to this
LIVE MELBOURNE SEMINAR!
Wednesday 10th of July 2019 at 6:30pm
Blackburn Hotel, 111 Whitehorse Rd, Blackburn, VIC, 3150
We'll show you Real Examples of Melbourne customers who are already achieving $500 per week passive income stream in their Australian Superannuation Funds for retirement
Managed Funds vs Commercial Property
These are just a few examples of how Commercial Property may be another alternative to Managed Funds for your retirement income. Keep scrolling to find out how you can get started on buying a commercial property in your Australian super fund.
|Paid Quarterly||Paid Monthly|
|Non Physical Assets||Physical Assets|
|Wide Spread of shares||Only Select Properties|
|Concerns over 2019 Stock Crash||Stable Commercial Property Prices|
|No Control over company that you've invested in||More Control, Flexibility to renovate|
|Banks will lend little amounts of shares||Banks will lend lots of money for commercial loans|
|Global Market||Local Market (more isoalated from Global trends)|
Managed Funds $90,000 vs Commercial Property $150,000
Here's an example of how you may be able to conservatively INCREASE YOUR YIELD.
Mr Jones had approx. $1.5m of his Australian Super Fund money invested in Managed Funds for his retirement and was receiving approx 6% return.
He was receiving approx $90,000 pa. Mr Jones was happy until his shares starting losing $80,000 in value in the space of a few weeks. At that point, he realised he had no control over his own hard earned money in the fund.
The solution? He ended up financing and buying a commercial property with govt backed tenants. Now he has control over his funds and the best bit he is making approx. $3000 per week or $150,000 per year.
If you'd like to know more details as to how this may be done you are welcome to come along to one our seminars in Sydney or Melbourne, where you can learn how it may be possible to conservatively INCREASE the yield in your Australian Super Fund.
So what could the numbers possibly look like?
Approximately 10% yield
+ Possible capital gain
(should the commercial property appreciate inside the Superannuation Fund?)
+ You control your own hard earned money.
*The above is an example only and uses an average managed fund yield of 6%. Some managed funds may return less and some may return more. It is an example only Past performance is not an indication of future performance. The above is information only and is no way advice. You must consult a licensed professional adviser before you take any investment decision.The adviser will take into account your personal position before any decision is made.
Are you happy with your Superannuation returns?
The Productivity Commission has finally released their condemning review of Australia’s seriously flawed $2.7 billion superannuation sector calls for a major overhaul. MySuper funds being one of the key offenders with 1.6 million underperforming accounts.
The review highlights that 2 of the biggest problems are:
- Multiple accounts that incur unnecessary fees
- Superfund insurance (zombie policies)
These issues are not just relevant to MySuper but relevant to around 5 million accounts across Australia which are constantly underperforming. The expected loss in performance could be equated to 13 years pay over a workers lifetime.
Another finding that came from the report was that of all the super accounts, around a third of super accounts (roughly 10 million) are unnecessary given that those members already have a primary fund with another company.
Along with the above issues, the commission had scathing remarks on how individual super funds are managed. It also attributes some of the problems on outdated structures and a closed shop mentality. What’s a closed shop mentality? ‘Closed shop’ comes from when a business employer could only hire union members. So it symbolizes any business that only hires the same types of people all the time or only thinks the same way. This relates to superfunds cause every time you start a new job, chances are you put with whatever superfund the company that hires you uses.
One of the remedies that the Productivity Commission would like to see take place is that it wants members to only ever hold one account. So when people change their jobs, their super contributions would go to their current active super account unless specifically mentioned otherwise. This may be good for the consumer but this change could shake up the super fund industry as this could deny the companies millions in new accounts and unnecessary fees.
The Commission is even recommending changes to the default super system. Proposing the idea of choosing from a best in show model, which would feature 10-20 super funds that are likely to continue performing strongly in the future. Any fund that repeatedly falls short by more than 0.5% a year (over an 8 year period) would have 12 months to sharply lift performance or risk being forced out of the market. By simply moving out from the bottom 25% of funds could see an average gain of over $180,000 to someone’s retirement fund.
Aside from this proposed change to default super funds, the commission made over 30 more recommendations and believe that if their recommendations are followed then then consumers entering the workforce could end up with $533,000 extra by the time they retire compared to before recommendation changes. Even with people already working in their mid-50’s could see as much as $79,000 increase in their retirement fund.
Now sure you could use a super fund and hope that the commission can get these changes through, but in the event they don’t, do you trust your super? Why not take control yourself on how you invest your future savings? The great news is that you can. Register Now for the next upcoming seminar. We'll show you Real Examples of customers who are already achieving $500 per week passive income stream in their Australian Superannuation Funds for retirement
Your super fund is probably your single biggest asset
that you own. People are spending less time thinking about their super fund and more time planning their next holiday. Set and forget type super funds was appropriate before the GFC. Seeing 1.6 million default accounts ending up in underperforming products means that ignoring your super is no longer a smart idea.
Too few members know what kind of super fund they have, let alone what kind of returns they are receiving. So its important to be annually benchmarking how your superfund is performing relative to it’s peers.
The Productivity commission calculated that a 21 year old starting on a salary of $50,000 who has a superfund in the bottom quartile would be $500,000 worse off when they retire at 67. Switching funds much later in life can also pay off with a 50 year old who moves from the worst performing fund to the best one could see an increase of $198,729 better off at 65. Ideally you want your fund to be in the top quartile.
No one can perfectly predict the future of a super fund performance based on past performances. As a rule of thumb though, the best funds tend to deliver almost twice the returns of the worst funds. There also seems to be that there’s a 70% chance that a fund in the top quartile group 3-5 years ago will stay in the top performing continuing forward. This also applies to low performing funds.
When you purchase commercial property for your super fund, you know what you’re buying and are in complete control over life savings.
The Fees of SMSF
It’s common for super fund members to pay fees for their accounts. Fees members pay to super funds have come down significantly in recent years, excluding insurance premiums (which still pay $30 billion plus in fees each year).
Retail funds generally remain to be the biggest fee collectors, though they now offer low fee options too. These fees are generally comprised as a percentage of funds under management. Most super fund members would be expected to pay between 1% - 2%. However 2 million accounts remain in what are called “legacy” accounts or old style funds which are charged on average 2.2%. Super funds that have a fee rate of over 1.5% would be considered high fees. The lower the super balance the greater the impact that fees will have on fund performance.
Key driver of outperformance is access to alternative asset classes such as infrastructure, emerging markets and hedge funds. Access to these kinds of resources are not normally cheap. Funds accessing these types of asset classes tend to be at the top of the performance tables.
Over time, higher fees can cost your fund dearly. Studies suggest that a 1% difference in fees can lead to a 20% difference in value of the balance over 30 years. Fund need members to watch out for the exit fees too that are charged on around 60% of super fund accounts. Non-profit and retail funds generally charge a modest fixed fee while others can charge exit fees as a proportion of assets.
Whose in control of your hard earned Super Fund money?
This website contains general information only. It is not investment advice. You must consult a team of professional advisers before making any investment decision. These professional licenced advisers will take into account your personal circumstances.
Some Potential Risks for Australian Super Fund commercial property investors:-
The main risk is the loss of a tenant which is the income stream. Because of the borrowing within the SMSF this may lead to being not able to meet your SMSFs loan obligations. Of course there are ways to mitigate this risk, such as properties with strong tenants on strong leases.
- There may also be a change in your personal circumstances.
- Financial fall in property value The value of your commercial property investment can fall for a few reasons, such as a general fall in property market prices.
- Taxation risk: The rules that govern Australian Super Funds can and do change.
We always end with the good news!
Here are some possible advantages for self managed superannuation fund commercial property investors.
- As investor you are able to control your own money.
- Due to the leverage there is the possibility for increased returns. Even with a simple gearing of 50% a clever investment strategy together with a Limited Recourse Borrowing Arrangement (LRBA) can potentially improve your SMSF's return on investment.
- Diversification: Many Financial Planners recommend Managed Funds for Australian Superannuation Funds. We are saying that as well as managed funds, with the use of commercial property as well, a diversified portfolio may lessen risk and improve returns over time. Using a LRBA can help in getting diversification in your SMSF.
- Tax advantages: Any tax payable within an Australian Super Fund may be lessened as Interest and other borrowing expenses may be generally tax deductible to your SMSF.