Is it time to change my super preference?

Discussion in 'Superannuation, SMSF & Personal Insurance' started by Dylan33, 31st Aug, 2015.

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  1. The Falcon

    The Falcon Well-Known Member

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    Geez. wow. don't know where to start with this, but briefly ;

    - "Super" is not Australian shares, or International shares for that matter. It is whatever asset class/s you choose.

    - 15% Tax environment. Salary sacrifice is pretty much a no brainer for top bracket PAYG earners, but not so for low income earners. There is a reason why most high net worth individuals and families use SMSF as part of their investment strategy. If you are low income, then yes salary sacrifice is not overly compelling.

    - Life cycle based asset allocation will mitigate the risk of major drawdown on your last day prior to retirement :) (like the old cop getting shot on last day at work trope). Some of the posters in this thread would be well served by researching the concept.

    - On Control ; we are all subject to macro forces well outside of our control. Sure, you can use your sweat equity and do stuff to property, but that's just that. Return on labour. If one has specific nous that contributes to outperformance in say property, it stands to reason others may have the same with regards to other assets. To a large extent I believe that control is a fallacy, but makes us feel better........and I guess there is value in that.

    - Super is not intended to be used in lieu of other investments but in addition to. Understand it for what it is - a very useful part of an investment portfolio.

    To each their own.
     
    marty998, Rusty12, Heinz57 and 2 others like this.
  2. wylie

    wylie Moderator Staff Member

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    Which post has you saying "gees" and "wow"?

    I think most of know that "super" is a vehicle. I would also think most posters understand the concept that we don't want to rely on our super value being "high" the day before we retire.

    For me (and hubby), super has always been something that we let hum away in the background. It has grown over the years and we have used it to minimise tax when we've made a gain. If we were counting on it to pay down debt we would probably worry more. That doesn't mean to say I'm not aware that we are taking a risk with it. I do worry that it could head downhill, and not bounce back in the event of some catastrophic world event, or depression, but baring that, I just hope that any dips will be followed by rises.

    We don't have an exit date. I have to say that recently, when the super balance equalled the loan balance, I was tempted to look at whether we cash it in, pay the tax and pay off our loans. I won't do that now the balance has dropped substantially. In four years, we can take out hubby's without paying tax. I hate the thought that I might look back and think "should have cashed it in back in 2015" :eek:.

    What I do know is that I know nothing about shares, so switching from mostly international shares into something safer is not something I want to try to "time the market" with.
     
  3. Perthguy

    Perthguy Well-Known Member

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    I agree. For example, my investment plan in my Super fund currenly comprises of a mix of Australian Shares, Property, Private Equity, International Shares, Infrastructure, Investment Grade Bonds and Cash. To date, the performance has been good and the value has not been affected by the latest share market crash (yet).

    I salary sacrifice into super. It's a flexible arrangement, so if I need the funds for property investing, I can cancel or alter my arrangement at short notice. It's worked out well for me.

    Yes, but I can choose how my super funds are invested. e.g. I can choose from a Growth Plan, Balanced Plan, Conservative Plan or Cash Plan. If I don't like one of those plans, I request a MY Plan, where I choose which asset classes I want my funds invested in (Australian Shares, International Shares, Property, Fixed Interest and Cash) and what percentage in each asset class. I could just go 100% property if I wanted to.

    I am balancing my investments inside super and outside super. I wouldn't want to rely on either in retirement. I want both! :)
     
  4. The Falcon

    The Falcon Well-Known Member

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    Not yours ;)
     
  5. The Falcon

    The Falcon Well-Known Member

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    Yes, spot on. My comment was a response to the concept of "no control" in Super as opposed to resi property.
     
  6. wylie

    wylie Moderator Staff Member

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    Phew! Thanks. I was wondering...
     
  7. Perthguy

    Perthguy Well-Known Member

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    Yeah, I saw that. It's a response to this comment:
    Given all my options on how my money in invested in my super fund, I don't agree with the concept that I have "no control". I have "no control" of property prices either but I invest in residential properties on "a chance on a hope" that the properties I buy will increase in value, so I could say the same thing about resi property. ;)
     
  8. Scott No Mates

    Scott No Mates Well-Known Member

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    Nailed it dude. Maybe, one day it might increase.
     
  9. Perthguy

    Perthguy Well-Known Member

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    They have, don't worry! ;-) :)

    But I guess that's my point really. Melbourne has been very volatile. I bought in 2007 for high 3's. Within a couple of years the area went up a lot and similar houses were selling for high 6's. Then it all slumped and next door (almost identical) sold for low 4's. Now the area is booming and similar properties are selling for mid 7's. I bought well and have done well, but I had no control over the price fluctuations. That said, I didn't "make" money when the price went up and I didn't "lose" money when it went back down again. Much like super really. :)
     
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  10. Waterboy

    Waterboy Well-Known Member

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    Good thing is all of my super is in international shares. Thank god for almighty American Dollars! Despite the recent volatility my super is still in positive territory.
     

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