Why superannuation should be risk free

Here's another reason why the superannuation system should not include risky investments.  This particular one should never have been allowedv to even get off the ground and has contributed significantly to our current housing affordabilty disster.

SMSFs borrowing to buy property.

Scams are being revealed showing huge losses and banks are ceasing to lend to SMSFs because of the risks.

This should also apply to all SMSF investment restrictions, better still, put all investements into superannuation into a government controlled fund such as the Future Fund and remove all the $billions being lost or paid to banks and financial advisers.

 

 

6 comments

Grateful, if Superannuation "has contributed significantly to our current housing affordabilty disster" and if "Scams are being revealed showing huge losses and banks are ceasing to lend to SMSFs because of the risks" then how long will it take before house prices drop?

Grateful, nothing is risk free. Market forces are fairly simple in reality except where the government steps in to influence behavioural activity. We have seen this in the energy sector.

We could bring electricity prices down significantly by generating more power and tell the government to butt out.

We have high prices because of scarcity. Same as the property prices. If we are going to allow about 15% of properties to be purchased by foreigners then stop locals from buying with their SMSF we will see a rise in the number of foreign buyers to take up the slack. I dont know why anyone would buy a residential property with their retirement savings? Sure its tax advantaged, but it has low income and can be quite volatile. Wouldnt it be better to buy Res Property with a discretionary trust? Or as an individual?  

The most risky investment you can have in your super fund is cash in the bank. After tax and inflation it rarely has a positive return. 

To have too much super is idiotic unless you really have plenty, to lose the Age Pension just because you have $600'000 in super is crap unless you use it for a bigger property we do not really need. Investing it gives you less than the pension. Just think about it, seriously.

Grateful

1. Do you think the Government Future Fund doesnt have protfolios of investemnt that are far higher in risk than others? How do you think they make their money? 

2. Risk--Reward. The higher the risk, the higher the reward so funds that do better than others, people who do better than others usually have a certain amount of moneyset in riskier investments

3. Risk appetite--one persons low risk is another persons high risk--you can't legislate this!!! People have to make their decisions based on data, evidence, their own experiences, and what they can afford to LOSE

Oh yeah! Give the government all the super money to steal like they did the pension fund years ago. Let them control billions and leave the people with NOTHING for all their hard work and saving. Great idea Grateful!  Do you want to plunge everyone with savings into poverty? Are you that envious that you are determined to ensure we are all equally poor?  Do you know what happened to the Future Fund? I suggest you find out before making such idiotic suggestions.

My super will be out in a flash if they decide to let the government control it.

Absolutely keep the Govt away from OUR Super. Dangerous idea!

Grateful's suggestion would be valid only if that applied to the 7.5% tax deducted from taxpayers (used to be for the Pension Fund).

There is an old truism, "the higher the rate, the higher the risk" and if those who choose to have a SMSF then let them take their chances. As long as people are allowed to run their SMSF's then there will be greedy people who think that they know everything about investing. If they fail it is only their money that disappears, not anybody else's. I have little sympathy for those who don't do enough research into an investment but only see dollar signs dancing before their eyes.

I would not have super if I could not have a SMSF. It is as simple as that for me. 

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