Hi All;
Just wondering what others think about managed funds. I've been taking a keen look at super lately, and it got me onto the idea that they would represent a good alternative to a savings account. Is it as simple as just buying units each week and (hopefully) watching them grow? Or is there more to it?
Would anyone recommend good managed fund which you can do everything with online –
Cheers, Tim
Hi Tim
As a Financial Planner of course i have to have Managed Funds in my arsenal of products as some clients like to spread their risk in this manner but more and more i work with clients who understand that the equity managed carry with them volatilty and prefer to look at rolling over their Super into a SMSF and buying a residential property with the aid of gearing and allow the tenant, tax man and employer to pay down the loan for them and create wealth over the longer term.
One of the downsides with Managed Fund especially as the equity markets have had a great run over the last 18 months is that the market will not rise indefinitely and of course we are all expecting a correction. This can be healthy in the long run but you have have the stomach to be able to accept the fact that you may have lost part of your superannuation and have to wait until it recovers.
For me property is an easier sleep at night remedy.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Thanks Richard;
For me, goal is to get to an IP (need about $10,000 more in the savings account to do it), but I liked the idea of putting little bits of money into a managed fund, with the ability to access it in my 40s or 50s, rather than contributing little bits to super and waiting til I'm 60. Either way, will keep sticking the cash in the redraw then and not worry about the managed fund. Thanks for your wisdom-
Hi Tim
Be very careful about utilizing a redraw facility especially if you are referring to a PPOR as you are likely to cause yourself real issues when it comes to the interest deductibility.
When you say you are $10K short are you sure that is the case ?
Personally i wouldn't suggest you use any of your own funds for an investment property purchase especially if you have a non deductibility home loan,
You would better off paying down your PPOR loan and then setting up a sub loan for the same amount to maximize the interest deductibility.
With many new exciting Investment loan products you might be surprised as to how much you actually need to go forward with your new purchase.
Have you considered setting up a Self Managed Superannuation Fund and taking out a SMSF loan to invest in direct property?
Certainly becoming more popular by the day with the number of enquiries we are receiving for such a product.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Richard; I accept what you're saying about redraw amount, house I currently live in, won't be my long term PPOR. Given that, I will start putting money into savings account instead! I'm sure I knew this, but it ain't been clicking.
Would be be impossible for me to utilise the SMSF option, I'm only 26, and having done the uni thing for 6 years, the full time income only started recently! What kind of investment products are coming out Richard?
Tim you can start a SMSF with a couple of thousand dollars but whether you would ever do so is a different matter.
Certainly i would never advise a client to start a SMSF with such a small amount.
In regards to new investment products there are a couple with close to 100% funding subject only to the security property.
We in fact as a private lender are re-launching our 100% investment property finance loans shortly.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
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