• About
• Latest Posts

Editor

Founder at The Passive Investor

The Editor is also the Founder of The Passive Investor website. He is a part-time practising General Practitioner (GP) with an interest in all financial and investment-related topics. He is particularly focused on the integrated use of residential property, commercial property and the sharemarket to develop effective financial strategies for wealth accumulation and distribution.

Latest posts by Editor (see all)

• DIY Commercial Property Valuation - March 2, 2014
• Controlling the Valuation Process - March 1, 2014
• Reducing Body Corporate Fees - February 28, 2014

Some people feel that investing inside a super fund or self-managed super fund (SMSF) is not worthwhile because of the ever present risk that legislative changes could adversely affect the strength and merits of using this particular investment structure.

This is true to the extent that successive governments may from time to time tinker with the super rules for various economic or political reasons, for example, in recent times changing the concessional contribution limits up and then down as well as allowing super funds to buy property with gearing involved using non-recourse finance.

And now also the proposal from the current Labor government to tax earnings of super assets supporting income streams over $100,000 p.a. at 15% p.a. (as opposed to being fully tax-free):

Wealthy targeted in superannuation changes

Depending on your personal situation these changes may either be good for you, or not so good for you.

And in the case of a few people it might even be to the point that investing inside super is no longer worthwhile.

On the whole however, for most people, we still feel that the tax advantages of investing inside super today are far too great to write it off as a useful long-term investment structure, regardless of potential legislative risk.

And the reality is that all investment structures, including discretionary trusts and companies, are subject to the same potential legislative risk as super – this is completely outside our control.

The difference of course though is that with super, once you put your money inside super, you won’t be able to take it out for a long time – but in some ways this may actually be better for us in the long-term!

As always, as investors we need to play by the investing rules of the day and use them to our advantage.

We feel the best way to mitigate against this legislative risk is to invest in more than one investment structure at the same time, ie. your individual name, a discretionary trust, a company, as well as super or a SMSF.

We discuss this in more detail in our article on What ownership structures should you use?.