Is it a good idea to take out the 10k super and put it towards property?

Discussion in 'Investment Strategy' started by showtime94, 22nd May, 2020.

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  1. showtime94

    showtime94 Well-Known Member

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    Just wondering do you think it would be a good idea to take advantage and take out the 10k from super and take the other 10k after the financial year and save on top of that 20k and put it towards a deposit for a investment property?
     
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  2. Angel

    Angel Well-Known Member Premium Member

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    Will you qualify for finance if your income has dropped low enough that you can access your Super this year?
     
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  3. Lindsay_W

    Lindsay_W Well-Known Member

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    If you haven't been able to save a deposit, how likely is it that you will in the future, especially IF your income has reduced?
     
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  4. philm

    philm Member

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    I would do the same if I was able to access my super so I say go for it. I would take the lot out if I could and invest it elsewhere. People carry on about super as if it is some magical unicorn but I think that you are better off being able to invest it elsewhere.

    You can always catch up later by salary sacrificing into super but the next few years should see some good buying opportunities in property and shares. Cash is king as they say.
     
  5. Mark F

    Mark F Well-Known Member

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    It is a magic unicorn if you take the time to care for it properly. Just remember than the $10,000 you take out today was most probably $12-15k only a few month ago and it is likely to return to that level.
     
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  6. Scott No Mates

    Scott No Mates Well-Known Member

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    Not only is it magical but it lives in a tax haven and enjoys favourable treatment compared to property or other investment vehicles.
     
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  7. Indifference

    Indifference Well-Known Member

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    At best it might make you an extra few hundred dollars.
    At worst it could cost you over a thousand when market rebounds.

    They're not good odds...
     
  8. thatbum

    thatbum Well-Known Member

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    I'm so surprised at some of the negativity on here about taking out super. If I could take out all my super tax-free I would do so in a heartbeat.

    I can't think of many downsides at all assuming that you do anything halfway financially responsible with it.
     
  9. 2FAST4U

    2FAST4U Well-Known Member

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    Most industry super funds average 10% a year growth. If you have 10k and leave it for 35 years it will be worth 281k in 35 years time assuming 10% compounding growth. It would also depend on the size of your current super balance and your ability to make extra concessional contributions in the future. Personally I wouldn't be touching it.
     
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  10. PropDir

    PropDir Well-Known Member Business Member

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    My personal preference currently is to keep the super completely separated from my property investing activity. I have kept it separate for as long as I can remember except for recently where the markets were starting fall, when I changed all my investment options over to cash. Otherwise I keep it very hands off.

    Has anyone here used their super in the past to fund their property investments? What has been your experience?
     
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  11. Marg4000

    Marg4000 Well-Known Member

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    Do you actually qualify to withdraw super?
     
  12. Angel

    Angel Well-Known Member Premium Member

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    I haven't, but other people have. It's called Buying Property in a Self Managed Super Fund.
     
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  13. showtime94

    showtime94 Well-Known Member

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    I can save a deposit, i already have. I was just wondering if it would be a good idea to use the money towards another deposit tho
     
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  14. showtime94

    showtime94 Well-Known Member

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    Yeah thats what i was thinking , obviously the people that are pulling it out and wasting the money on nonsense they are better off not touching it , but pulling it out and putting it towards property may prove to be money better spent
     
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  15. showtime94

    showtime94 Well-Known Member

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    Yeah thats true .
     
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  16. showtime94

    showtime94 Well-Known Member

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    Well i lost my job , so i would assume so
     
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  17. Codie

    Codie Well-Known Member

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    Exactly. If you Take it out and buy a new tv and some furniture of course it’s a terrible idea.

    Super - might return 8-10% & let’s hope you can touch it at retirement age. Many don’t make it to 67

    Putting it into property - you gain 2-3% pa immediately depending on your interest rate, and will Benefit from capital growth over the same period/time frame as your super. Psychological benefits of owning the property, living standards, security etc. It’s a great use of the $20k IMO if it allows you to buy

    Shares - Put the $20k into a large fund trading at a discount right now, you’ll still get the rebound, and similar if not better growth than any super fund taking their huge chunk of fee’s and insurance. No different really except you have control of it right throughout your life & can use it at any stage, and may draw dividends much earlier than retirement age.

    Im in the opposite camp and think people should take it out as long as it’s used correctly
     
  18. Westminster

    Westminster Tigress at Tiger Developments Business Member

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    If your job loss means that it will be awhile before you can get funding again and you still want to use the $20k for a deposit make sure you put it in a term deposit/savings bonus account and get as much interest as you can.

    Alternatively you could leave the money in your Super and change your risk allocation to a riskier one so that you are more exposed to the share market and reap the gains that may occur over the next 1-3 years.

    It very much depends on your age, how much you have in your Super, risk profile and what you are going to buy with that deposit.
     
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  19. Lindsay_W

    Lindsay_W Well-Known Member

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    That's the issue though, most won't, new car, jet ski etc.
     
  20. AndyPandy

    AndyPandy Well-Known Member

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    What most people don't talk about is the fact that you eventually get to access super with about 5 years left to the grave. Ok, 5 years is a stretch, maybe 10 years but still, I'd rather reduce my home loan right now.
     
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