The Australian Government in its wisdom has decided that everyone has to look after their own retirement income and to that end all employers have been adding monies to superannuation funds for employees. At present the employer contribution is 9%.
Working Australians have been putting money into Super Funds out of their own pocket adding their employer’s contributions.
Supposedly super funds will have a growth factor of at least 9% and that there will be sufficient in the fund to support you in your retirement. The last year or two has been a wake-up call in this regard because the super funds have made nowhere near the amount of money that people have been expecting.
To a certain extent you can choose how your money is invested in the fund as in cash and shares or whatever you are offered by your fund manager, but it seems that the return is far lower than can be expected from a commercial market.
Super Funds do not seem to return the same money on property investments and they certainly do not return as well as professional traders on the share market. Super Funds in most cases have quite high fees and if you are only a part-time contributor your superannuation gets eaten up in fees.
The idea of adding extra funds to the super fund was to get the tax benefits in the end. To ‘get ahead in a Super Fund you really need to be adding extra monies to the employer contribution’ is what has been touted as the thing to do.
However, one could argue that by investing your own excess funds outside the super fund and also meeting your tax obligations, you can make more money than if you had your money in a super fund managed by someone else.
So how could you make more money than having your money in a super fund?
Run Your Own Super Fund
Property investing is now allowed under Self Managed Super funds and it is possible to put small amounts of cash say, $5,000 into Joint Ventures where you can get returns of up to 100%. Keep in mind the higher the return the higher risk. But in reality it is quite possible to get a 25% return on investing into Joint Venture property developing with very little risk.
When seeking Joint Venture investment ensure that the property has already received bank approval as this will show that the company has been searched and that a considerable amount of the units, houses or whatever have been presold.
Joint Venture investing where you are investing in a specific property means that you will receive a legal agreement, a Company Guarantee, availability to view a feasibility document and an interview with the developer either in a group situation or a one on one interview. This is how many people are making a lot more money than through their super funds.