Welcome to How Do They Afford That, the podcast that peaks into the financial lives of everyday Australian. So I'm Michael Thompson. I'm an author and the co host of the podcast Fear and Greed business news. As always, I'm with Canna Campbell, financial planner and founder of SugarMammaTV, the financial literacy platform that you'll find just about everywhere podcasts, books, Instagram, threads, TikTok and more. Hello, Canna, what are we talking about today?

Welcome to How Do They Afford That, the podcast that peaks into the financial lives of everyday Australian. So I'm Michael Thompson. I'm an author and the co host of the podcast Fear and Greed business news. As always, I'm with Canna Campbell, financial planner and founder of SugarMammaTV, the financial literacy platform that you'll find just about everywhere podcasts, books, Instagram, threads, TikTok and more. Hello, Canna, what are we talking about today?

I love that you asked me that we are talking about bit of context. First, I was talking recently with a friend about superannuation, which don't laugh. Don't laugh, because that is actually the kind of conversation that I have with people now, because that is the effect that you and doing this podcast has had on me. They asked me if I had a self managed super fund because they didn't know whether they needed one as well. I don't have a self managed super fund, but it did make me wonder who does have a self managed super fund? Kind of why would you have a self managed super fund? Who benefits from having a self managed super fund? How much it costs, what a self managed super fund actually is probably should have started with that one. So this is what we're going to get into today. Do I need a self managed super fund? Before we get into it though? And I know that you are itching to set me straight on all of this. Just please remember that everything we talk about is always general in nature. It is never personal investment, strategic or product advice. It is purely for financial education purposes only.

I love that you asked me that we are talking about bit of context. First, I was talking recently with a friend about superannuation, which don't laugh. Don't laugh, because that is actually the kind of conversation that I have with people now, because that is the effect that you and doing this podcast has had on me. They asked me if I had a self managed super fund because they didn't know whether they needed one as well. I don't have a self managed super fund, but it did make me wonder who does have a self managed super fund? Kind of why would you have a self managed super fund? Who benefits from having a self managed super fund? How much it costs, what a self managed super fund actually is probably should have started with that one. So this is what we're going to get into today. Do I need a self managed super fund? Before we get into it though? And I know that you are itching to set me straight on all of this. Just please remember that everything we talk about is always general in nature. It is never personal investment, strategic or product advice. It is purely for financial education purposes only.

That's correct. We don't think about your financial situation, so always reach out and speak to a financial planner on us then for personal advice in reference to your own situation.

That's correct. We don't think about your financial situation, so always reach out and speak to a financial planner on us then for personal advice in reference to your own situation.

Yeah. Absolutely, Let's start with the basics, shall we, Right at the very very start. What exactly is a self managed super fund?

Yeah. Absolutely, Let's start with the basics, shall we, Right at the very very start. What exactly is a self managed super fund?

All right? Think of it this way. So a normal, everyday, you know, retail super innuation fund is like going to a restaurant for dinner. You walk in, you get greeted, you get served, you can pick from the menu, it gets delivered to you, gets taken away, and you don't need to worry about cleaning up whatsoever. It's very easy and you can just sit back and relax and enjoy your time in the restaurant.

All right? Think of it this way. So a normal, everyday, you know, retail super innuation fund is like going to a restaurant for dinner. You walk in, you get greeted, you get served, you can pick from the menu, it gets delivered to you, gets taken away, and you don't need to worry about cleaning up whatsoever. It's very easy and you can just sit back and relax and enjoy your time in the restaurant.

You haven't been to a restaurant with me, have you? I'm the most indecisive person. And so if there's a group of people, I always make sure that I go last to order because I need the extra time to decide. And even then, by the time the waiter comes around to me, I will not have decided. And it is only the pressure put on me by the waiter to make a decision so that they can in fact do their job, that is what will help me decide.

You haven't been to a restaurant with me, have you? I'm the most indecisive person. And so if there's a group of people, I always make sure that I go last to order because I need the extra time to decide. And even then, by the time the waiter comes around to me, I will not have decided. And it is only the pressure put on me by the waiter to make a decision so that they can in fact do their job, that is what will help me decide.

It's not annoying at all.

It's not annoying at all.

That's exactly what Sean says, Please go on.

That's exactly what Sean says, Please go on.

So a self managed super fund is like hosting, say a dinner party instead of going to a restaurant, So all the responsibility falls back on you. You need to think about who you can invite, picking a date, time, organizing a menu, going to the supermarket and buying all the ingredients, obviously doing all the cooking, setting up the table, making sure everyone's happy, has a glass of wine in their hand or a refreshment, and that everyone's enjoying their meal, and then obviously cleaning up after everyone has left. So essentially that's the difference between the two.

So a self managed super fund is like hosting, say a dinner party instead of going to a restaurant, So all the responsibility falls back on you. You need to think about who you can invite, picking a date, time, organizing a menu, going to the supermarket and buying all the ingredients, obviously doing all the cooking, setting up the table, making sure everyone's happy, has a glass of wine in their hand or a refreshment, and that everyone's enjoying their meal, and then obviously cleaning up after everyone has left. So essentially that's the difference between the two.

So essentially one everything most things are done for you, and the other one you're doing it.

So essentially one everything most things are done for you, and the other one you're doing it.

All your stuff exactly but with most self management funds you can only have maximum of six members, so your dinner party is quite limited, unless, of course, you have like a corporate trustee, which makes it a little bit different. But this is quite popular and more and more people have self managed super funds these days.

All your stuff exactly but with most self management funds you can only have maximum of six members, so your dinner party is quite limited, unless, of course, you have like a corporate trustee, which makes it a little bit different. But this is quite popular and more and more people have self managed super funds these days.

How popular are they? I'm assuming that they are growing in popularity over time, particularly as there is a greater focus on superannuation and what we're all doing with our superannuation. There is more money going into super so I would just assume that as an extent that there are more people investigating smsfs as an option. That is a very hard acronym to say. I'm just going to continue calling them self managed super funds.

How popular are they? I'm assuming that they are growing in popularity over time, particularly as there is a greater focus on superannuation and what we're all doing with our superannuation. There is more money going into super so I would just assume that as an extent that there are more people investigating smsfs as an option. That is a very hard acronym to say. I'm just going to continue calling them self managed super funds.

Yes, you're right, about twenty five percent of all superinnuation assets are actually a self managed super fund. Really, there's over six hundred thousand self mensagent funds in Australia and one point one million members and there's a I believe, just under nine hundred billion assets in a self masup fund structure.

Yes, you're right, about twenty five percent of all superinnuation assets are actually a self managed super fund. Really, there's over six hundred thousand self mensagent funds in Australia and one point one million members and there's a I believe, just under nine hundred billion assets in a self masup fund structure.

That is a lot. It's a lot lot more than I was expecting. But if we look at the logic behind it, and it probably leads me to my next question of who is actually using a self managed super fund that perhaps they are more perhaps savvy investors, possibly earning more money, having a larger structure behind it, more assets to put into this self managed super fund, so they might actually be kind of sophisticated. Yeah, and as a higher represent of higher income earners and things.

That is a lot. It's a lot lot more than I was expecting. But if we look at the logic behind it, and it probably leads me to my next question of who is actually using a self managed super fund that perhaps they are more perhaps savvy investors, possibly earning more money, having a larger structure behind it, more assets to put into this self managed super fund, so they might actually be kind of sophisticated. Yeah, and as a higher represent of higher income earners and things.

However, I will share a stat with you in a few minutes that actually contradicts that.

However, I will share a stat with you in a few minutes that actually contradicts that.

Okay, come on, this is turning out, this.

Okay, come on, this is turning out, this.

Will say, I'll save it because we need to talk about.

Will say, I'll save it because we need to talk about.

Who is actually it is on track to become the most confusing episode we have done. We started with the most convoluted restaurant analogy I have ever heard. It was good until you suddenly said no, your dinner party is only allowed to have six people unless you have a corporate structure for your dinner party. Or okay, all right, this is this is getting intense. So okay, so who does tend to have one? Were sophisticated investors? Yes?

Who is actually it is on track to become the most confusing episode we have done. We started with the most convoluted restaurant analogy I have ever heard. It was good until you suddenly said no, your dinner party is only allowed to have six people unless you have a corporate structure for your dinner party. Or okay, all right, this is this is getting intense. So okay, so who does tend to have one? Were sophisticated investors? Yes?

So business owners, high income earners often mum and dad and investors as well, like to have a self manage super fun But you are right, it's typically people who have, you know, a large amount of experience when it comes to investing, and you know they have a you know, sophisticated investment strategy, because one of the key reasons why people would use a self manag super fund is because you have more control over the underlying investment. You know. I was talking to someone the other day who is actually invested in racehorse breeding in their self made a super fund. And I know people who've looked at including art as part of their overall investment strategy.

So business owners, high income earners often mum and dad and investors as well, like to have a self manage super fun But you are right, it's typically people who have, you know, a large amount of experience when it comes to investing, and you know they have a you know, sophisticated investment strategy, because one of the key reasons why people would use a self manag super fund is because you have more control over the underlying investment. You know. I was talking to someone the other day who is actually invested in racehorse breeding in their self made a super fund. And I know people who've looked at including art as part of their overall investment strategy.

So imagine it's hard to invest in racehorse breeding going through your your main super fund if you were.

So imagine it's hard to invest in racehorse breeding going through your your main super fund if you were.

Going on under a retail fund. Absolutely, so it does give people that sort of control and flexibility.

Going on under a retail fund. Absolutely, so it does give people that sort of control and flexibility.

All right, is there then? And going back to the question asked of me by my friend and kind of do I have one? Why would I have one? And at what point should I start considering one? Is there a threshold at which it's something that you might actually start considering? For instance, I know that part of what part of the reason you would do it would be to have greater control over the assets and things within your superannuation. But is there a minimum amount that you need to have in order to make it at least Worthwhile.

All right, is there then? And going back to the question asked of me by my friend and kind of do I have one? Why would I have one? And at what point should I start considering one? Is there a threshold at which it's something that you might actually start considering? For instance, I know that part of what part of the reason you would do it would be to have greater control over the assets and things within your superannuation. But is there a minimum amount that you need to have in order to make it at least Worthwhile.

There's no official threshold as such, but because it's expensive to set up and to maintain, the general rule of thumb is between about two hundred and fifty thousand to five hundred thousand in order for to be cost effective.

There's no official threshold as such, but because it's expensive to set up and to maintain, the general rule of thumb is between about two hundred and fifty thousand to five hundred thousand in order for to be cost effective.

Okay, And that says the minimum the starting point, and then from there you're growing exactly. Okay, big one for you. Now, how do they work? I know this is a meaty, meaty question and there is no one set kind of structure for them, but just broadly, how do they work?

Okay, And that says the minimum the starting point, and then from there you're growing exactly. Okay, big one for you. Now, how do they work? I know this is a meaty, meaty question and there is no one set kind of structure for them, but just broadly, how do they work?

Well, you have to apply online and then you have to register them with the ATO, and then you have to open up a bank account, and if you're going to be having an online trading account, you need like a broker account as well. So there is a lot of paperwork involved, and there's a lot of documentation about the investment strategy behind it, and also understanding all the rules and regulations that go into making sure that it is compliant and you understand like for example, the reports, the tax obligations, the audio and so forth. It's a lot of time involved.

Well, you have to apply online and then you have to register them with the ATO, and then you have to open up a bank account, and if you're going to be having an online trading account, you need like a broker account as well. So there is a lot of paperwork involved, and there's a lot of documentation about the investment strategy behind it, and also understanding all the rules and regulations that go into making sure that it is compliant and you understand like for example, the reports, the tax obligations, the audio and so forth. It's a lot of time involved.

To be honest, there really is. It does sound as though it is the kind of thing that if you are considering it, it is a conversation straight away with a financial advisor, financial planner.

To be honest, there really is. It does sound as though it is the kind of thing that if you are considering it, it is a conversation straight away with a financial advisor, financial planner.

And an accountant, and so they really do need to sit down and go through all the expenses and the responsibilities because they all those responsibilities and risks actually come back onto your own shoulders. So it's not for everyone.

And an accountant, and so they really do need to sit down and go through all the expenses and the responsibilities because they all those responsibilities and risks actually come back onto your own shoulders. So it's not for everyone.

Okay, So if I was just to put together a bit of a checklist, you want to make sure that you have got enough assets to make it worthwhile to begin just as your initial kind of starting point. You want to actually make sure that you have a need for it that can't be met by an existing industry fund or a retail super fund, in that you want more control over where it is going, or that you've got very particular ideas for what you want to do with the money and the assets within your superannuation, something that can't be met by one of these other funds where they manage the whole process for you exactly.

Okay, So if I was just to put together a bit of a checklist, you want to make sure that you have got enough assets to make it worthwhile to begin just as your initial kind of starting point. You want to actually make sure that you have a need for it that can't be met by an existing industry fund or a retail super fund, in that you want more control over where it is going, or that you've got very particular ideas for what you want to do with the money and the assets within your superannuation, something that can't be met by one of these other funds where they manage the whole process for you exactly.

And you also need time. You know, there is a lot of time that is involved in running a self manage super fund as well as the risk and the responsibility.

And you also need time. You know, there is a lot of time that is involved in running a self manage super fund as well as the risk and the responsibility.

I want to get to some of the risks and the responsibilities as part of it, but just finishing off the checklist. Then you need to make sure that you're having this conversation with your accountant, with your financial advisor to see whether it is actually going to be beneficial for you or whether you're just going to be making a massive amount of work for yourself that could potentially put you in a hole exactly.

I want to get to some of the risks and the responsibilities as part of it, but just finishing off the checklist. Then you need to make sure that you're having this conversation with your accountant, with your financial advisor to see whether it is actually going to be beneficial for you or whether you're just going to be making a massive amount of work for yourself that could potentially put you in a hole exactly.

And one of the most important conversations I'd recommend someone speak to a financial planner and an accountant about whether or not a self manship fund is right for them is what are the tax benefits. So I talk a lot about this thing called in specie transfer benefits and essentially is where you can avoid triggering capital gains tax when you go to retire because with most industry and retail superannuation accounts, when you shift your assets from accumulation phase to a pension phase, use trigger a capital gains tax. Now, obviously that capital gains tax depends on how long you've held that asset, but it ranges between ten to fifteen percent. However, with some special retail supernuation accounts, and there aren't many, but with self managed super funds, you can actually, depending on the structure, avoid having to pay this tax because they have this thing called an n specie transfer benefit within a self manage super fund, So asking your accountant and financial planner to sit down and explain and see whether that is actually relevant and applicable to you. If you have this self married super fund may actually give you some great long term tax savings if it's not available in your current retail or industry supernation fund.

And one of the most important conversations I'd recommend someone speak to a financial planner and an accountant about whether or not a self manship fund is right for them is what are the tax benefits. So I talk a lot about this thing called in specie transfer benefits and essentially is where you can avoid triggering capital gains tax when you go to retire because with most industry and retail superannuation accounts, when you shift your assets from accumulation phase to a pension phase, use trigger a capital gains tax. Now, obviously that capital gains tax depends on how long you've held that asset, but it ranges between ten to fifteen percent. However, with some special retail supernuation accounts, and there aren't many, but with self managed super funds, you can actually, depending on the structure, avoid having to pay this tax because they have this thing called an n specie transfer benefit within a self manage super fund, So asking your accountant and financial planner to sit down and explain and see whether that is actually relevant and applicable to you. If you have this self married super fund may actually give you some great long term tax savings if it's not available in your current retail or industry supernation fund.

Okay, we're going to take a quick break. When we come back, I want to talk a little bit more about some of the benefits. Some of the big risks though, because you do need to go into this process with your eyes very much wide open, some of the costs associated with the regulation. We talked about, the paperwork and the red tape. It's starting to sound I'm not saying you've turned me off an SMSF, but you are certainly making it very very clear to me that there is a lot more involved.

Okay, we're going to take a quick break. When we come back, I want to talk a little bit more about some of the benefits. Some of the big risks though, because you do need to go into this process with your eyes very much wide open, some of the costs associated with the regulation. We talked about, the paperwork and the red tape. It's starting to sound I'm not saying you've turned me off an SMSF, but you are certainly making it very very clear to me that there is a lot more involved.

I'll explain why in second very good.

I'll explain why in second very good.

Cana. We are talking today about superannuation. We are talking more specifically about self managed super funds and do you need one, who are they suited to, how do they work? Everything that you could possibly need to know about smsfs. We did touch on the main benefits. It is all about having greater control over your money, over your assets, and being able to be quite directive in terms of where it's going. Is that the number one benefit along with the tax kind of reasons as to why you might do it.

Cana. We are talking today about superannuation. We are talking more specifically about self managed super funds and do you need one, who are they suited to, how do they work? Everything that you could possibly need to know about smsfs. We did touch on the main benefits. It is all about having greater control over your money, over your assets, and being able to be quite directive in terms of where it's going. Is that the number one benefit along with the tax kind of reasons as to why you might do it.

I'd say that the two sort of key reasons. Obviously, you know, the bigger the self managed super fund is the potential savings as well, and obviously you have maybe some state planning benefits along the way. But also you can you know, if you've got say up to six members, you can potentially buy an asset that you wouldn't be able to afford to buy in your superannuation alone. So you know, you might see a commercial property and between you and your other members you can afford to buy that commercial property, whereas you wouldn't have been able to have that wasn't an opportunity that you can consider it was just you on your own and these other members.

I'd say that the two sort of key reasons. Obviously, you know, the bigger the self managed super fund is the potential savings as well, and obviously you have maybe some state planning benefits along the way. But also you can you know, if you've got say up to six members, you can potentially buy an asset that you wouldn't be able to afford to buy in your superannuation alone. So you know, you might see a commercial property and between you and your other members you can afford to buy that commercial property, whereas you wouldn't have been able to have that wasn't an opportunity that you can consider it was just you on your own and these other members.

Are they typically kind of family? For instance? Is that what you would most often see or are you talking about kind of It wouldn't be colleagues and things. It is more the people that you are actually planning for retirement with, right.

Are they typically kind of family? For instance? Is that what you would most often see or are you talking about kind of It wouldn't be colleagues and things. It is more the people that you are actually planning for retirement with, right.

Yes, is the most common with families, and occasionally you know business partners.

Yes, is the most common with families, and occasionally you know business partners.

Okay from a dad investors, Yeah, sure. That is interesting though, that you would do it in order to buy a larger asset, which because I have heard about people that are buying property, buildings, et cetera, and then setting it all up with their financial planner and their accountant to actually make the most of having access to a larger asset and potentially an asset that's that's got a fairly good return attached to it. So in some circumstances different types of property.

Okay from a dad investors, Yeah, sure. That is interesting though, that you would do it in order to buy a larger asset, which because I have heard about people that are buying property, buildings, et cetera, and then setting it all up with their financial planner and their accountant to actually make the most of having access to a larger asset and potentially an asset that's that's got a fairly good return attached to it. So in some circumstances different types of property.

Yes, exactly. And I've seen situations where people have gone in together and they're you know, knocked things down or rebuilt things or renovated things and onsold them and they've never been able to have that opportunity when they're on their own.

Yes, exactly. And I've seen situations where people have gone in together and they're you know, knocked things down or rebuilt things or renovated things and onsold them and they've never been able to have that opportunity when they're on their own.

The risks, and this is probably the big one, and we've there are so many. Okay, all right, well let's try and condense them down into say two minutes. If you had to rank them, What would be the biggest risk here? Is it getting in over your head.

The risks, and this is probably the big one, and we've there are so many. Okay, all right, well let's try and condense them down into say two minutes. If you had to rank them, What would be the biggest risk here? Is it getting in over your head.

There are huge responsibilities, so you've got to comply with some pretty complicated superannuation laws and the penalties are quite scary. So penalties up to forty five percent of the fund's market asset value.

There are huge responsibilities, so you've got to comply with some pretty complicated superannuation laws and the penalties are quite scary. So penalties up to forty five percent of the fund's market asset value.

Oh wow, So it's not just a monetary figure that they nominate. It is actually based on the amount within the fund itself.

Oh wow, So it's not just a monetary figure that they nominate. It is actually based on the amount within the fund itself.

It can be so it can be fines that you know, and then of course there's legal costs as well, and even up jail time up to five years if you haven't intentionally that is of course broken the laws. So this is why it's so important. You've got to go in eyes wide open to know that you are completely comfortable taking on all these risks and they stack up on your advantage. The other risk is obviously it's time consuming. I don't know a single person right now who has the time to take on these types of responsibilities. And I know I probably I am a bit anti self managed super funds, which I'll explain in a second, but you know, there's a lot of ongoing management required, investment decisions, huge amounts of paperwork. You know, you've got to make sure you've actually got the time to stay on top of these responsibilities and also all the deadlines that go along with the paperwork. It also can be really expensive for small superannuation balances, which is why I said you want to make sure that you've got a decent amount of money between you, because there's all the annual fees, the compliance costs, the professional co of an accountant, and I find your partner if you're using them, So sometimes it's not necessarily efficient. And then you've got the investment risk and only you'll put yourself to blame if things go wrong. And if you've got family members involved or so you're doing with friends, if they aren't happy that the returns and the results, it can cause issues, especially if you then need to wind things down and you need to debate buy someone out. And it's not a liquid asset. This is where the wheels can come off quite quickly.

It can be so it can be fines that you know, and then of course there's legal costs as well, and even up jail time up to five years if you haven't intentionally that is of course broken the laws. So this is why it's so important. You've got to go in eyes wide open to know that you are completely comfortable taking on all these risks and they stack up on your advantage. The other risk is obviously it's time consuming. I don't know a single person right now who has the time to take on these types of responsibilities. And I know I probably I am a bit anti self managed super funds, which I'll explain in a second, but you know, there's a lot of ongoing management required, investment decisions, huge amounts of paperwork. You know, you've got to make sure you've actually got the time to stay on top of these responsibilities and also all the deadlines that go along with the paperwork. It also can be really expensive for small superannuation balances, which is why I said you want to make sure that you've got a decent amount of money between you, because there's all the annual fees, the compliance costs, the professional co of an accountant, and I find your partner if you're using them, So sometimes it's not necessarily efficient. And then you've got the investment risk and only you'll put yourself to blame if things go wrong. And if you've got family members involved or so you're doing with friends, if they aren't happy that the returns and the results, it can cause issues, especially if you then need to wind things down and you need to debate buy someone out. And it's not a liquid asset. This is where the wheels can come off quite quickly.

Wow, there's a lot of risks.

Wow, there's a lot of risks.

I sound negative and blank's main.

I sound negative and blank's main.

Why So why are you antiet? I mean there could be any one of those those things, but is there a main reason?

Why So why are you antiet? I mean there could be any one of those those things, but is there a main reason?

Well, speaking from experience, so I have had so many people come to me and say, Canna, we've got this self managed super fund. There's so much involved. We didn't really understand what we were signing up to in the first place. Our accountant recommended it. It's expensive and when I sit down and look at what's going on most of the time. That money has been sitting in cash for the last five, six, seven years, So you know, and I think it was not recommended in the right type of way for these particular people. The money wasn't managed properly, and it's potentially have compliance issues because it hasn't followed necessarily an investment strategy, because the documentation wasn't done correctly. So you know, that could have sat in a retail or an industry fund in cash and they would have had no stresses, no paperwork. Yes, they would have had to pay some fees, but probably would have been cheaper than the self managed super fund. So I feel like a lot of people that they have been sold a self managed super fund for the wrong reasons. And you look at, okay, the retail fund and even industry funds really up their game in the level of services and product offering an ability to diversify your money. So it just is disappointing to see so many people get burned. And so I've so many times I've had to wind people's self made super funds down with the assistance of an accountant and get them into something that actually suits their needs and gets them back on track and make sure that their money is actually complied and it's actually aligned to their goals. So I'm not a huge fan and personally someone that she asked me the other day with her, I would set a self man super fund that you. Tom asked me, should we be looking at this? And I was like, as soon as I spoke Tom about it, and I was like, oh my god, forget it. Stop right there. Don't even bother talking to me about it again, because there is a lot of work involved, and there are great quality superinherotion platforms that do I think a superior job keeping your time and energy back.

Well, speaking from experience, so I have had so many people come to me and say, Canna, we've got this self managed super fund. There's so much involved. We didn't really understand what we were signing up to in the first place. Our accountant recommended it. It's expensive and when I sit down and look at what's going on most of the time. That money has been sitting in cash for the last five, six, seven years, So you know, and I think it was not recommended in the right type of way for these particular people. The money wasn't managed properly, and it's potentially have compliance issues because it hasn't followed necessarily an investment strategy, because the documentation wasn't done correctly. So you know, that could have sat in a retail or an industry fund in cash and they would have had no stresses, no paperwork. Yes, they would have had to pay some fees, but probably would have been cheaper than the self managed super fund. So I feel like a lot of people that they have been sold a self managed super fund for the wrong reasons. And you look at, okay, the retail fund and even industry funds really up their game in the level of services and product offering an ability to diversify your money. So it just is disappointing to see so many people get burned. And so I've so many times I've had to wind people's self made super funds down with the assistance of an accountant and get them into something that actually suits their needs and gets them back on track and make sure that their money is actually complied and it's actually aligned to their goals. So I'm not a huge fan and personally someone that she asked me the other day with her, I would set a self man super fund that you. Tom asked me, should we be looking at this? And I was like, as soon as I spoke Tom about it, and I was like, oh my god, forget it. Stop right there. Don't even bother talking to me about it again, because there is a lot of work involved, and there are great quality superinherotion platforms that do I think a superior job keeping your time and energy back.

Okay, it sounds to me as though starting point is not even so much the amount of money you have in your super It is whether you are a savvy investor that you have the time and the knowledge and the willingness to devote what is going to be a fairly significant chunk of time and effort and energy into making sure that this is that this is working for you exactly, that it is not just something that you go. Okay, I know that there are multiple options out there for my superannuation. I'm going to go with SMSF because I know that you can do more with your money. For instance, I can.

Okay, it sounds to me as though starting point is not even so much the amount of money you have in your super It is whether you are a savvy investor that you have the time and the knowledge and the willingness to devote what is going to be a fairly significant chunk of time and effort and energy into making sure that this is that this is working for you exactly, that it is not just something that you go. Okay, I know that there are multiple options out there for my superannuation. I'm going to go with SMSF because I know that you can do more with your money. For instance, I can.

Access something that's not available on an industry or retail superinnuation account.

Access something that's not available on an industry or retail superinnuation account.

Okay, it just sounds like it is absolutely something where you need to be talking to a financial advisor and an accountant to see whether it is genuinely right for you. It does worry me that you say that a lot of people have been kind of sold into self managed super funds, because presumably it is somebody within the industry broadly who has suggested it to them, but it's not quite right for them.

Okay, it just sounds like it is absolutely something where you need to be talking to a financial advisor and an accountant to see whether it is genuinely right for you. It does worry me that you say that a lot of people have been kind of sold into self managed super funds, because presumably it is somebody within the industry broadly who has suggested it to them, but it's not quite right for them.

And that leads me to my stat approximately sixteen percent of self manage super funds are sitting wholly in cash. So this is a problem that's still lingering, and you know it leads the question, hang on, are you really upholding all your members' best interests at heart? If you all this money is sitting just in cash doing not much, especially when you look at inflation, and that's when you like, you're opening yourself up to like your investment strategy being questioned, what's the game plan behind this?

And that leads me to my stat approximately sixteen percent of self manage super funds are sitting wholly in cash. So this is a problem that's still lingering, and you know it leads the question, hang on, are you really upholding all your members' best interests at heart? If you all this money is sitting just in cash doing not much, especially when you look at inflation, and that's when you like, you're opening yourself up to like your investment strategy being questioned, what's the game plan behind this?

And so just in terms of the fees, the fees can be quite high, I would assume, because it's not just the administration fees and the fees associated with registering and maintaining it, but also the fees that you additional fees that you would need to pay in order to get the professional support from an accountant or from a financial advisor to put it all together and to maintain it right.

And so just in terms of the fees, the fees can be quite high, I would assume, because it's not just the administration fees and the fees associated with registering and maintaining it, but also the fees that you additional fees that you would need to pay in order to get the professional support from an accountant or from a financial advisor to put it all together and to maintain it right.

You've got to pay for those reports to be completed, and you've got to obviously pay for all the auditing involved and returns to be lodged. So look, it can vary, but as a as a rough ballpark, between two to five six thousand dollars a year.

You've got to pay for those reports to be completed, and you've got to obviously pay for all the auditing involved and returns to be lodged. So look, it can vary, but as a as a rough ballpark, between two to five six thousand dollars a year.

Okay, that's a decent whack.

Okay, that's a decent whack.

When do you think we've got five hundred thousand dollars in super and you caught five, you know, years just going just to maintain it. And okay, you sometimes might find something better value for money elsewhere.

When do you think we've got five hundred thousand dollars in super and you caught five, you know, years just going just to maintain it. And okay, you sometimes might find something better value for money elsewhere.

You know. I don't like being negative on this show, and I don't like the this idea that we are kind of coming in here just to say, hey, don't try something. But it is just one of those situations where you need to have the conversation with a professional to see whether this is suited to you. It is not the kind of thing where you can just rush into it because you've heard something about it. You might have seen something online. You might have seen an influencer or something online going on about how they've got assets within their self managed super funds that they can't access somewhere else. You need to have the conversation for yourself and make sure that there's one hundred percent suited to you.

You know. I don't like being negative on this show, and I don't like the this idea that we are kind of coming in here just to say, hey, don't try something. But it is just one of those situations where you need to have the conversation with a professional to see whether this is suited to you. It is not the kind of thing where you can just rush into it because you've heard something about it. You might have seen something online. You might have seen an influencer or something online going on about how they've got assets within their self managed super funds that they can't access somewhere else. You need to have the conversation for yourself and make sure that there's one hundred percent suited to you.

Absolutely.

Absolutely.

Ah, that was a very serious episode. It was minimal fun. My favorite part was the restaurant's analogy. I thought, Oh, here we go, we're going to be We're going to be in for something here, and then it complicated and convoluted. And then at the end of the restaurant like you left with this massive, massive bill of kind of five thousand dollars. That was a one.

Ah, that was a very serious episode. It was minimal fun. My favorite part was the restaurant's analogy. I thought, Oh, here we go, we're going to be We're going to be in for something here, and then it complicated and convoluted. And then at the end of the restaurant like you left with this massive, massive bill of kind of five thousand dollars. That was a one.

Are the restaurants the cheap version?

Are the restaurants the cheap version?

Oh that's right, that's the dinner party isn't much?

Oh that's right, that's the dinner party isn't much?

You're around the wrong way.

You're around the wrong way.

Who could have seen that coming? That was the most compl catered analogy in the first place. Of course I was going to stuff it up.

Who could have seen that coming? That was the most compl catered analogy in the first place. Of course I was going to stuff it up.

I thought it was brilliant.

I thought it was brilliant.

It was. It was quite good at times. Canna. If somebody wants more information from you, where do they find you?

It was. It was quite good at times. Canna. If somebody wants more information from you, where do they find you?

The best place is to send me an email or a DM sorry on Instagram at Sugar Mama TV.

The best place is to send me an email or a DM sorry on Instagram at Sugar Mama TV.

And you can hear me every day with Sean Aylmer on Fear and Greed daily business news for people who make their own decisions. Thank you for listening to how Do They Afford That? Remember to hit follow on the podcast. And the best thing you can do is tell somebody else or Betty at send them this podcast if if you, like me, have had a conversation with a friend about starting a self managed self managed super fun which I know is probably a fairly niche category of people that have had this conversation in the last few weeks, But if you have had that conversation, then send them the link to this episode so that they can get a bit of a starting point for the research. Spread the word about how do they ford that? Thank you for your company. Join us again next week.

And you can hear me every day with Sean Aylmer on Fear and Greed daily business news for people who make their own decisions. Thank you for listening to how Do They Afford That? Remember to hit follow on the podcast. And the best thing you can do is tell somebody else or Betty at send them this podcast if if you, like me, have had a conversation with a friend about starting a self managed self managed super fun which I know is probably a fairly niche category of people that have had this conversation in the last few weeks, But if you have had that conversation, then send them the link to this episode so that they can get a bit of a starting point for the research. Spread the word about how do they ford that? Thank you for your company. Join us again next week.