Setting up a Self-Managed Super Fund can be an exciting step towards taking control of your retirement savings. But here’s the thing – one of the biggest mistakes we see people make is not fully understanding what they can and can’t use those funds for. And unfortunately, it’s a mistake that can really come back to bite you.
An SMSF is specifically designed to invest in assets like property, shares, and managed investments. It’s not a vehicle for purchasing personal assets and goods. This is where a good SMSF Home Loan Broker can help guide you through the rules before you make a costly misstep. We’ve had clients who’ve set up their fund with the best intentions, only to go out and buy something like a new work truck they’re driving around for personal use – that’s not what your SMSF is there for.
The Investment Seminar Trap
Just recently, we had a client come to us after attending an investment seminar. The property group running the event was enthusiastically pushing the idea of setting up an SMSF to purchase investment property. Sounds appealing, right?
Here’s the reality: she had $40,000 in her super fund. That’s simply not enough liquidity to cover a 20 to 30 percent deposit while still keeping enough funds in reserve for the SMSF to operate properly. These are the kinds of scenarios where people get caught out, often because they’ve been sold on an idea without receiving proper, personalised advice.
Get the Right Advice Before You Start
If you’re thinking about setting up an SMSF, please do yourself a favour – have a conversation with your accountant, your financial planner, and your finance broker first. Each of these professionals can help you understand the pitfalls that trip so many people up, and make sure you’re getting the education and guidance needed to set things up correctly from day one.
It’s not about being cautious for the sake of it. It’s about making informed decisions that will actually serve your long-term financial goals, rather than creating headaches down the track.
We’re always happy to chat if you have questions about SMSF lending or want to understand your options better. That’s what we’re here for.
