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. Marg4000

    Marg4000 Well-Known Member

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    I accessed my super over 5 years ago and am still going strong.
    Happily retired on a (joint) 6 figure income.
    Hoping for at least another 20+ years.
     
  2. MoneyMan

    MoneyMan Well-Known Member

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    Does anyone here have enough to purchase a property through an SMSF? You may only need about $180k combined super, then you can enjoy tax free rent in retirement.

    Tax exemptions in the retirement phase
     
  3. Jerms

    Jerms Active Member

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    My wife, applied last week as she is eligible (Stay at home parent) I am not, as my employment was not affected.

    We were/are planning to purchase a property at the end of this year (September onwards), the property will be an investment initially (1-2 years) and then we plan to move in at some stage. We already have a cash deposit (covers stamp duty, legals etc) + equity from our other investments (positively geared). Being on one income banks are very conservative in their lending to us and the extra $20k should broaden our options of purchase choice and give a good quality of life benefit now a opposed to waiting 20 odd years for it.

    The application was a very easy for to fill out, and at this stage has not been approved.
     
  4. Always Learning

    Always Learning Member

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    Why not invest in yourself?

    take the $10000 super

    start a business, something real simple that you can do as a side hustle While still working. eg buy $10000 worth of xyz product, sell for $20000 which leaves you $10000 profit . Even if you got taxed 40% and then had another 10% costs associated with running the business you are still left with $5000.

    Repeat the process once more

    you now have your $10000 to put back into super (if that’s what you want) and $10000 to buy more xyz product

    you can repeat the process as many times as you want now, the returns are infinite and you have created an income stream that YOU control.
     
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  5. Lindsay_W

    Lindsay_W Well-Known Member

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    That sounds way too simplified - could you expand on what product you would buy and sell using this strategy and how long the process would take ? Any other costs to set up something like this, storage of goods etc etc
     
  6. mr_alex

    mr_alex Well-Known Member

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    Mmm that wouldn't be a good idea to take from super in the hopes to start a successful business, much better to just cashflow your side hussle/business startup expenses or save abit extra.
     
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  7. Always Learning

    Always Learning Member

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    Yes it is a simplified version to make a point

    The point being to invest in yourself

    Anyone can start with a $300 website, business registrations (maybe $500) a spare room at home to store stock, time to build website and research products, time to learn how to run a business.

    There are many products out there that you can buy at wholesale and sell at a profit. You could even create your own products.

    Like anything worthwhile it takes sacrifice and hard work and lots of time spent building it with no money coming in to start with. Most won't do it
     
  8. Lindsay_W

    Lindsay_W Well-Known Member

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    I get your point, it sounds nice in theory but in reality much more effort required which granted some might do but as you rightly say, most won't.
    So the idea to take $10K from super and do it is not great advice IMO
     
  9. Always Learning

    Always Learning Member

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    I agree, it takes a mindset change and most are happy to go to a job every day and have someone else promise to take care of their "investments"

    I just hope that the money is there when it comes time to access it. Sadly I saw this happen to my parents just before retirement age, they lost a fair chunk of their super and were forced back into a job they hated as they had no other way of making money. This happened right before the first of the baby boomers were eligible to access their money.

    Now we are looking at a huge volume of baby boomers on the verge of retirement.
    I can't see how the huge number of baby boomers that will be cashing out in the next decade won't have an effect on the whole superannuation system, or property for that matter.

    If superannuation and property crash in the next ten years would you still be happy putting your money into it ?

    Or would investing in yourself and your ability to look after yourself be something that we could teach our younger generations so that they can be self sufficient and have options at any age
     
  10. Lindsay_W

    Lindsay_W Well-Known Member

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    Seeing as I have more than 10 years left in my working life I'm confident I could ride it out and still come out on top, although I certainly won't be relying on Super as my only means to retire on. We are on a property investment forum after all.
    Back to the mindset thing, it's a slippery slope if you only plan for a stock market/property market crash or think that the only way is down, similarly risky to think the only way is up, so it's about balance and risk management isn't it?
    Owning and running a business is certainly not without it's own risks as well, some people bust their humps running business, working 7 days a week only to break even.

    Out of interest, what do you do to earn a living?
     
  11. Always Learning

    Always Learning Member

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    I run three business that I have built

    I also have property and shares and super

    When there is a downturn I have control over how those businesses perform as opposed to super/property/shares that I have no control over.

    Because I have taught myself to create money through business I can start another business any time when I see opportunities - I don't have to ride out a downturn

    I had been working on my third business for the last three years at night time and weekends - a hobby business that I have a passion for. The website was all ready to go , just needed the funds for stock. I withdrew $10000 of my Super and had around $3000 worth of stock already (purchased from savings over the three years). I spent around $2000 of my super on extra stock and made about $3900 in sales in the first four weeks. I sold out of a lot of items and now would like to use more of my Super money to buy more stock as I have had good feedback about the products and once more marketing is done I can grow my customer base. The business has great potential and is a delivery business so is working out well in the current environment.

    I am not against super or property or shares

    I just don't like being told when I can have my money I suppose :)
     
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  12. mr_alex

    mr_alex Well-Known Member

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    you're obviously doing well. If you are confident that you can turn that 10k into hundreds of thousands of dollars by the time you are 60, then go for it, because that's just about what it will turn into having leaving it in super. There is a lot more risk of failure to start from scratch and a lot of learning
     
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  13. Always Learning

    Always Learning Member

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    If this idea scares you you could always put the 10K back into super once the business is up and running and then tip in all the profits that the business makes for the next 30 years - now you have supercharged your super

    or

    you could put your 10k back in super once the business is up and running and use your profits from the business to choose your own investments - shares/super/property/more businesses
     
  14. AndyPandy

    AndyPandy Well-Known Member

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    Considering the ASX recovery, seems like a good time to withdraw the $10k if someone was planning on doing it anyway.
     
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  15. Lindsay_W

    Lindsay_W Well-Known Member

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    Sounds great! Although not sure I could give up 3 years worth of my weekends and night time for no profit yet (but that's just me, lazy i suppose)
    So you had a reduction of income of at least 20% to qualify for the release of Super? And was the superannuation money funded by your own business'? My understanding is that self employed do not have to super or is that not correct?
    What are you selling? Can I check out your website??
     
    Last edited: 9th Jun, 2020
  16. Always Learning

    Always Learning Member

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    Yes I was eligible for the super release

    The super money was from my younger days when I was an employee

    I value my privacy so I don't share my private details but I sell homewares/giftware, nothing super hard or tricky about it, there are heaps of other people doing the same thing
     
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  17. wilso8948

    wilso8948 Well-Known Member

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    $10k, an entrepreneurial mindset and an Alibaba account goes a long way.
     
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  18. Heinz57

    Heinz57 Well-Known Member

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    It would be interesting if you could start a new thread on this Topic?
     
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  19. Lindsay_W

    Lindsay_W Well-Known Member

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    Great Idea!
     
  20. Scott No Mates

    Scott No Mates Well-Known Member

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    Glad someone has picked up on that, Now there are two classes of super withdrawers. Those that took it out when the market tanked and locked in their losses with lower market values & those who waited for the recovery and applying for it now (at pre-crash values).
     

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