Thinking about an SMSF? Here’s part 2 of a 3 part series on what you need to know…
Running a SMSF isn’t all rainbows and unicorns, and there’s no shortage of bad decisions you can potentially make when it comes to your money. So here’s a few things to avoid on the SMSF path.
Here’s my top 7 mistakes when running an SMSF;
- Not having enough money – some people try to start an SMSF to buy or speculate in a certain asset or asset class. Unless you have around $100-200,000, that can be combined with other family members or your partner, it’s probably not worth starting a fund.
- Gambling with your money– your superannuation fund is there for retirement planning purposes only. It’s not there to gamble or day trade. That being said, it is possible to buy Bitcoin and trade shares however it needs to be consistent with a written investment strategy.
- Mixing the money– You can’t mix your personal money with your SMSF money. It’s important to keep separate bank accounts and set personal assets clearly apart from the assets of the fund.
- Not buying assets in the right name– further to the previous point, when you purchase assets, its paramount that you buy the asset in the correct name otherwise it may create a capital gain or stamp duty event to change the beneficial ownership.
- Living in a property– you can’t live in or rent a residential property to a family member. That’s counter to the rules of an SMSF. You can own, and your business can rent, a commercial property which is a key reason for business owners to have an SMSF.
- Accessing the money– even when times are tough, you’re not allowed to access your money inside the SMSF unless under very specific circumstances and often only just for a short time to pay bills or meet obligations.
- Having the wrong team- it’s paramount to the success of your fund, and ultimately your retirement, that you have the right advisors on your team for when you have questions that will affect your future.
If you’re thinking about setting up a SMSF and need some help, simply provide a few details below and we can work out if you need an Accountant or financial adviser to step you through the ways to reduce your tax and boost your super! We’d love the opportunity to help you or just answer some questions for you.