Reduce borrowing, buy shares or pay extra into super?

General question, I know but -

Does anyone have any opinion on whether a regular monthly lump sum would currently be better employed

- reducing borrowing (by increasing offset balance)
- increasing share portfolio
- investing maximum additional contributions into super?

JB

 

impossible to answer as too many variables.

Super is not an investment class but a 'structure' so you could be diverting money into that and then into shares for example.

 

I personally wouldn't just shovel extra money into super unless you have a clear vision as to what will happen to that money when it arrives in super and be comfortable that it will move your balance upwards to look after you in your retirement. Just dumping money in there and hoping that the fund manager will do well with it may not be wise. Super can be very powerful if driven carefully. But it's not a sole investment strategy. It's normally "driven" at the same time as strategies outside of super. Unless your age is getting close to retirement age anyway.

 

As others have said, too many variable to comment on. In my case, young couple in 30's, I am building the share portfolio outside super (current economic situation helps ), looking at other creative investments (e.g. Managed funds, Insurance bonds, Crowdfunding, etc...) and this year I'll salary sacrifice maximum amount to my super, once it reaches 150K around so in next year I can start SMSF and start controlling that well...Not happy at all with how my fund is performing. As jacqui mentioned you need to know what you'll do with money in super relying on fund can be costly...

 

Maybe give some consideration to either of the two following courses of action then:

• Look at which "option" your superannuation money is invested in. No point salary sacrificing extra into it if all that will happen is it gets lots of the stock market. Look at options such as the "fixed interest" or "cash" options or whatever your fund essentially considers the same as a savings account. You want the option that cannot go down (but understand it also won't go up); OR
• Start the SMSF first, plunge its money into a SMSF term deposit account and then start salary sacrificing. Then the SMSF could invest in suitable assets when it has enough money.

 

Thanks Jacqui. I am looking at the relevant strategy but thinking more of going the high risk option than conservative in meanwhile...I may have to consider leaving existing fund open until replacement insurance cover is found....

I've not started anything on yet and keen to do some reading around this. Any book recommendation on starting ground research for SMSF setup...

 

Hi @S0805

Your lawyer or accountant would set the SMSF up for you (if accountant, they'd second lawyers to produce the documentation). I run my own SMSF and would be more than happy to share knowledge with you regarding the setup experience and management thereafter. Feel free to get in touch re this.

 

I use my super fund as I would trade the stock market. I move my funds between safe haven cash and bonds when the stock market is experiencing high volatility (preferably before or in the early stages) and then move it back to high performing/high risk when the stock market performs accordingly.

It seriously doesn't take a bunch of my time........and the expense of switching super investments is minimal considering risk/rewards. During bull markets, you can double your super fairly quickly. During market corrections, you don't lose because you've moved your money into safe havens.

Do the same over years, and you will always beat the performance of most super funds. It seriously isn't that hard to learn how to do it.