Is a self managed super fund the right strategy for you?

Meet Tracey…

Tracey and her daughter Michaela are a mother-daughter power team who work together in a florist Tracey set-up on her own twenty years ago. It is a successful business and has grown immensely over the last decade as they have won a few key commercial contracts. When Michaela finished school she joined her mother in the business. Tracey had been contributing to superannuation since it began in 1992, and when Michaela joined the business she set up a fund for her.

With the business going well, Tracey decided she wanted more control over the decisions on how she invested her superannuation, which was her third largest asset after her business and her apartment.

Tracey engaged the services of SD Life Insurance and Wealth Advice for some Financial Advice about establishing her own self-managed super fund (SMSF). As her super balance was close to $500,000 and she was willing to put time and effort in to the management of the fund, it made sense to her. Tracey was used to managing a business so the administration of the fund as a trustee came easily to her. As she now had more control, Tracey became a lot more interested in the investment markets and is expanding her knowledge. She regularly reads the newsletter SD Life Insurance and Wealth Advice sends her with the latest updates and information. Over time her fund grew at a pace she was happy with.

Tracey and Michaela decided to keep Michaela’s superannuation with an industry fund because she was young, had a low balance, and was not interested in monitoring and controlling her own super fund while she was busy studying, travelling and working in the business.

Last year, the space Tracey leased for the florist went on the market. The business was going well and a lot of goodwill was attached to its location. Tracey contacted SD Life Insurance and Wealth advice to make made an appointment to discuss how she might go about buying it.

SD Life Insurance and Wealth Advice suggested she use some of the money from her SMSF to buy the property and we borrow with Limited Recourse Borrowings in her Super Fund for the balance of the purchase. In doing this, she pays commercial rent into her super fund. The rent paid to her SMSF would go towards covering the repayments and her own personal contributions to her SMSF would provide the balance to pay off the debt in her SMSF.

If you feel an SMSF may be the right strategy for you, or you want assistance with setting up a new SMSF or reviewing your existing SMSF, contact SD Life Insurance and Wealth Advice  to start the discussion.

For more queries:

07 4033 0254