Super or Negative Geared Property

That’s a bit unfair, my parents are into their sixties and have only just retired. They go overseas every year (last year Turkey, year before Greece) and even did some trekking through the Himalayas only a few years ago. No walking sticks there.

They also play tennis with similar aged people, golf, walk and are working on the huge gardens they put into their new house in country WA.

I think you will find that the average ‘walking stick’ age in this country is much higher than that now. 20 years ago maybe, but now it is 75+.

Standard superannuation will not sustain you completely anyway IMHO. You will need other sources of income (unless you have set up you own super fund that has performed really well)

‘Eat rich food, barbeque a yuppie’ [greedy]

Why don’t you look at setting up your own super fund. You can use the money to invest in whatever you want. You of course cannot touch it until 65 but if you are confident with your investments, it is a worthwhile thing. My Dad set one up 10 years ago and has invested in property, shares, funds and other ventures. He has made and lost money on various investments but in the long run, he is well ahead. In fact he pulls money out for Mum and himself to live on and has not reduced the capital.

Remember that super gets taxed at a much lower rate than income.

Speak to your accountant about the costs involved. It may be $1K – $2K but worth it IMHO.

‘Eat rich food, barbeque a yuppie’ [greedy]

The problem with super is you have no control over it (unless yu have a DIY super fund), you don’t control when assets are sold or when they are taxed, you don’t control what the fund is investing in, nor management of the fund and lastly many super funds have no downside risk control (through the use of options), so if the market falls big time (think back to the NASDAQ) you can lose everything, and because you don’t cntrol the tax situation, still be taxed on it.

That said super is better than nothing, and if you can find a good fund manager, it might be worth it. But I simply see Super (with Managed Funds) as enforced saving (Not investing).

There are two routes you can go to rectify this – setup a DIY super fund, or use the money to start investing in property.

As geo suggested start by paying off your house, as the interest off that is not tax deductable, also if you are forced to sell you have a asset that can give you alot of cash. Also you pay your house off, you’ve got more money for investments!

Rgds.
Lucifer_au

robo, I got my super statements the year before last and had lost lots of money because thetre had been some downturn somewhere blah blah :o( There goes the retirement! hehe. Property was booming and super funds were losing money! It might be the opposite in the bext few years- RE might be flat and super funds might make big money… but if they can’t make money during one of Australia’s biggest economic growth period in the last few decades… then I have very little faith in them. Go the property purchase, I say! Of course, make sure you pay yourself the 9% minimum super guarantee. And if you are a low income earner, there is the $ for $ “matching” thing the Fed govt is doing.

I see property as superannuation really. Say you buy 3 $100k properties now, with 30 years left wo work. And say those properties double within 15 years (conservative estimate). At 15 years left to work, the 3 props are worth 600k, and at retirement age, those properties might be worth $1.2 million. TRhat will be enough to retire on, they’ll be paid off by then, and you can sell them iff you want to and live the rest of your days (say 30 more years), living on 40k per annum from your props, PLUS having your minimum superannuation from work… and that’s only on 3 properties!

As an aside, my mum is 77 and is in absolutely perfect health. 80 is the new 70, 70 is the new 60… etc. We have an ageing population- and if people’s lifestyles are healthy, the stereotype of the walking stick older person is… well, excuse the pun, but it’s lame.

kay henry

Acey said:

“Now that’s a very different attitude towards working! I can’t see why anyone would choose to work for 30 years without being able to retire at any time. “I guess some people have been well conditioned to society’s work til you’re 60-65 brainwashing”

You may see it as brainwashing… I see it as my choice. I work in a well-paid profession, I enjoy my work, it utilises my skills etc. I didn’t do 4 University degrees, Acey, to sit on my bum. Some of us *like* to work. If you don’t, that’s all fine- make your choices. I make mine… see it as me being socialised and brainwashed if you will. But you might respect that some people actually *like* being doctors, lawyers, teachers, nurses, builders, gardeners.

I will work until I am 65. You are constantly referring to projects you are doing, and you run an internet site. If you call that “retirement”, go figure- I can accept your term. You suggesting that those who actually enjoy working are brainwashed- well, to use the word twice in one thread.. it’s lame.

kay henry

I am a computer consultant and do so little computer work these days its scary. My total focus is on properties and developing a great portfolio. Hit a snag. Found the “perfect house” to live in in Coffs and my focus is getting it all paid off by the end of the year.

Once that is done, a nice and healthy line of credit to go again. PAY OFF YOUR OWN HOME FIRST.It is the only one you dont get a tax break from. Then all of your efforts are shined upon by the tax gods. We will still have about 15IP’s after we sell 5 to pay tis new home off.

This to me is fun fun fun and now I have the luxury of not being a ‘wage slave’ as my first home in sydney is already mine. Take less now in the pocket to make your dreams come true.

Have a go. No one else will help you like you can.

DD

Actually Acey, I worked through all my degrees- except the first, which I got special leave to finish in 2 years – NOT that it’s any of your business, but your suggestion of me sitting around doing nothing is offensive.

kay henry