It shouldn’t come as a surprise to anyone that times are economically tough. It’s not a pleasant experience for most people to watch their retirement funds and stocks rise and fall all the time. Some have taken matters into their own hands and set up DIY super funds. Self-managed superannuation is a great way to control things on your own, but it is up to the individual to decide if it is worthwhile.
Possibly the best part of DIY super funds is the ability to control the investments and personally oversee where funds are going. It should be noted, especially by those who have never traded stocks on their own, that trading takes practice. It is by no means impossible to do, (if it was, no one would invest in self-managing superannuation) it just may take some time to get good at it. Prior experience is valuable in that it allows for wise decisions. Because self-managers are often careful with their money, they often make conservative investments. Accepting the lower yield provided by low risk stocks is a small price for these investors to make for total control of their assets.
DIY super fund management requires a decent time commitment as well. Since these funds are completely self-managed and everyone involved maintains trustee status, the investor must manage books and stocks on his own. Researching the history of a stock takes time, as does deciding on its yield and risk. Also, if an investor wants to keep his portfolio in good shape, he needs to take time to make sense of the figures he will encounter and keep accurate and close records. Taking a good amount of time ensuring that records are accurate and up-to-date keeps unwanted attention off of investors from tax offices.
It takes money to make money, and DIY super funds have small price tags attached. They usually require around $1500-$4000 annually to maintain, but by taking time to make wise decisions and fewer transactions, ongoing fees can be kept to a minimum. Tax concessions are offered to super funds. They taxed at a maximum of 15%, often much lower than the marginal tax rate. These price tags are usually not much of an issue for investors looking to control their own money.
Self-managing investors looking to keep a handle on their money will certainly find DIY super funds worthwhile. With some time and wise planning, they will pay off to those who show dedication. Sometimes that isn’t too much to ask when it comes to money.
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