If you’ve always wanted more independence over your superannuation funds and always wanted more say in how you can spend it, then SMSF might just be the thing for you. Not only do you get to have a say in how you get to spend your retirement funds as well as on what you get to invest it on, but you also get to have complete control over the whole process, which is a bonus if you’ve ever felt uncomfortable about how your retirement funds were being handled. That said, you also need to know what you’re doing before you get down to it.
Learning to read between the lines
If you’ve ever dreamt of having your own smsf, then we sure hope that you’re also ready for the consequences, which, aside from just your independence over your funds, also comes with a lot of stress and work, as well as proper investment skills, without which, you’re doomed.
Anyone can tell you how liberating the experience of managing your fund by yourself can be, and as uplifting as all these positive comments may be, you also need to look at it critically and realistically. For one, this is a major investment in itself because of the startup amount that you will have to invest. On top of that, if you plan on having any other members with you in this account, then you will also be held responsible for them. Do you really think you’re up for all of this? That is precisely the reason why SMSF is just not for everybody, even if they happen to have the entrepreneurial streak in them.
You need the skills as well as the time and money to make such a major investment. This will, after all, determine how you spend your retirement years. Therefore, before you rashly decide to start your own SMSF[https://www.moneysmart.gov.au/superannuation-and-retirement/self-managed-super-fund-smsf], think long and hard, are you really up for this?
All this aside, you really need to prep for it, just like you would have back in your student days, by doing a thorough research on it. Read as much as you can on SMSF and learn from other people’s experiences. If you walk in on this without having read and without having done your research, that is no different from saying that you walked into it blindly, and we’re sure that that’s the last thing you want to do.
They say that good writers are likely to be good readers, and although we don’t expect you to be the Wilde or the Poe of the world of finance, your skills in documentation and writing business reports should, at least, help enhance your skills of reading fine print and thinking critically when looking at a potential investment, for example. It is extremely important that you read everything as thoroughly as is possible, since preparation, both mental as well as practical, is key to succeeding in the maintenance of your SMSF; so do not take reading lightly.
For more information on what SMSF is, read https://www.dixon.com.au/smsf/what-is-an