Other members of the SMSF
Wife. I think it’s best not to have any of our three children in the fund because of the four-member limit. How would you choose?
Where do you live?
Glen Waverley, Melbourne
What investments do you have outside of superannuation?
Family home, small share portfolio.
How long have you had your SMSF?
I started my own SMSF in 2011/12.
Why did you start it up?
The world is full of sharks and ticket clippers and everyone wants a piece of your hard-earned cash, so I was wary of getting involved with a lot of financial planners out there pushing product with high commissions and trailing fees.
I started my SMSF up to plan for my retirement and also because I was running a business from an industrial property and I knew I could take advantage of certain ATO small business concessions to move that property into the SMSF.
How big is it?
It’s about $1.4 million.
Is it more or less difficult to manage than you thought it would be? Are you glad you have it?
Yes it is more difficult, but yes I am glad I have it.
Are you pleased with its performance?
Yes and no. A large part, 50%, is in the property and it has had a very good tenant there for five years but he is moving out. Hopefully a new tenant should move in soon.
All the rest of the money was in cash up until recently. I could see the way that interest rates were heading, but my wife was very risk adverse so I said let’s try a little bit in the equity market first.
I followed Peter Switzer’s formula for a high dividend portfolio exactly as published in the newsletter. It seems like the day I picked to do that (January 8) was the perfect day and I’m very happy with the way it’s gone. It’s up 12.5% ($14,000) since then, and I haven’t even begun to collect my dividends!
I know your (Switzer Super Report) advice is to buy in the dips so I’m waiting for another dip to do that.
What is your asset allocation?
Currently it’s property 50%, shares 10% and cash 40% so I may be looking at increasing the shares to somewhere about 25%. I think with the size of the fund that will give us a comfortable living. We don’t have to chase high returns at high risk. And there will be a certain amount of capital growth on the factory
And this year I will be declaring I have retired from full-time work so it will be in pension phase.
What are your favourite investments/stocks and why?
I’m a long time fan of BHP, but I don’t even follow my advice. I’ve often said to people if you’ve put half your money in BHP and CBA you could just sit back and relax but I haven’t done that. I was personally buying shares in BHP at $8, and $12 (but also at $36), however, overall, BHP has done well. I bought CBA in the original float and held on to them till I got to about $50 when I thought they had got a bit expensive.
Do you use an advisor or any kind of service provider?
I initially started my fund with an advisory firm but grew a bit disenchanted with them pushing a lot of in-house product. I just didn’t like the way they did that. Their price for advice I thought was extravagant. They weren’t much help with getting my property into the SMSF either. I used a solicitor who was familiar with all the aspects of that.
Why did I go with the SSR?
I was getting the free newsletter for a while begging me to join up, the advice just appeared to be solid and conservative and the suggested portfolios seemed to have a few runs on the board. I couldn’t ask for a better way to start the year.
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