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Can a SMSF Buy a Classic Car? Discover What’s Really Possible · TFS WealthCast

• 0:04
  SPEAKER_01: This is the TFS Podcast, where money markets real and financial freedom is more than just a goal.
• 0:12
  SPEAKER_01: Without further ado, let's dive in.
• 0:17
  SPEAKER_02: Welcome to TFS Wealthcast.
• 0:20
  SPEAKER_02: I'm your host, Ramo Rodrigo.
• 0:22
  SPEAKER_02: Today I've got Sonali Rodrigo joining me.
• 0:25
  SPEAKER_02: Today we're going to talk about self-managed super funds, or we call it SMSF.
• 0:30
  SPEAKER_02: I'm going to ask a few questions from Sonali, because she's been the financial planner for pretty much all her career.
• 0:40
  SPEAKER_02: We're going to ask a few questions from her about this SMSF.
• 0:43
  SPEAKER_02: There are so many things I want to ask her.
• 0:44
  SPEAKER_02: Let's see what she's going to tell us.
• 0:48
  SPEAKER_02: Sonali, welcome.
• 0:50
  SPEAKER_00: Thank you.
• 0:50
  SPEAKER_02: All right, let's dive in.
• 0:52
  SPEAKER_02: What is an SMSF?
• 0:55
  SPEAKER_00: So, in short, an SMSF is essentially a DIY superannuation fund.
• 1:01
  SPEAKER_00: So typically when you're working or even if you have your own business, you can have a self-managed uh superannuation fund set up to provide retirement benefits.
• 1:12
  SPEAKER_00: It's almost like your retirement nested.
• 1:15
  SPEAKER_00: Um, people have it with large retail funds, industry funds, that sort of thing, typically.
• 1:22
  SPEAKER_00: But if you decide to, you can set up your own superannuation fund where you have a fair bit of flexibility and control over it, but also it comes with you know certain responsibilities and compliance obligations.
• 1:37
  SPEAKER_00: So um, in short, it's an it's a DIY superanimation fund.
• 1:42
  SPEAKER_02: But it is a is a it's a complex DIY.
• 1:44
  SPEAKER_00: It is a little bit complex.
• 1:46
  SPEAKER_00: There are quite a few rules around it.
• 1:48
  SPEAKER_00: So you have to be careful if you are thinking of setting one up.
• 1:51
  SPEAKER_00: You don't want to sort of get into trouble after setting it up and then have the ATO come in and find and pretty much take half your assets.
• 2:00
  SPEAKER_02: So Sonali, um if I if I ask you the question, what are what are the basics uh that you need to do when you're setting up SMSF?
• 2:11
  SPEAKER_00: So first, um so usually this is set up um like typically by family members, um, it can be business partners or say husband and wife.
• 2:25
  SPEAKER_00: Um so the minimum number of people that can be in a fund is one, maximum number is six.
• 2:33
  SPEAKER_02: Do they need to be living in Australia all the time?
• 2:36
  SPEAKER_00: Yes.
• 2:37
  SPEAKER_00: So there is a requirement.
• 2:39
  SPEAKER_00: You can have temporary absences, but typically you the the essential control um needs to be in Australia.
• 2:48
  SPEAKER_00: So the members need to be in Australia.
• 2:53
  SPEAKER_02: Is that this temporary absence?
• 2:55
  SPEAKER_02: Is it uh is there a time limit like you know, is it six months, twelve months, or two years, three years?
• 3:01
  SPEAKER_02: Because I know there are quite a lot of people out there who would love to uh add their siblings or their friends or their parents into their self-managed fund as well, because the contributions can come from different parts of the world.
• 3:15
  SPEAKER_02: Uh what was the uh uh uh absence?
• 3:21
  SPEAKER_00: So uh, like I said before, the central management and control um of the fund has to be ordinarily in Australia.
• 3:30
  SPEAKER_00: So um they look at you know how the contributions are made, um, and at least 50% of the fund's value must be attributable to members who are Australian residents.
• 3:43
  SPEAKER_00: So you can't just go willingly and do whatever you want with it.
• 3:49
  SPEAKER_00: Um there are certain rules and regulations around who can contribute, um, how the decisions are made, where the members are when these decisions are made.
• 3:59
  SPEAKER_00: So, like I said, there is a temporary absence rule.
• 4:02
  SPEAKER_00: Um, you can be overseas temporarily for up to two years without the fund breaching basically the central management and control test.
• 4:14
  SPEAKER_00: Um the key point to note is obviously that the absence must be temporary, the trustee must have every intention to come back to Australia.
• 4:23
  SPEAKER_00: So you it can't be where you know you you know for sure that you you're never gonna come back.
• 4:28
  SPEAKER_00: Um and if the absence extends beyond the two years, you risk the SMSF becoming a non-complying fund.
• 4:37
  SPEAKER_00: So, which is something you want to avoid.
• 4:39
  SPEAKER_02: Okay, so listeners, you you you don't see this.
• 4:42
  SPEAKER_02: Um I sort of uh asked uh uh certain types of questions, and Sonali was rolling her ice whatever you're asking.
• 4:50
  SPEAKER_00: Uh but I want to We jump straight into quite a complex section.
• 4:55
  SPEAKER_00: What I was trying to explain what an SMSF was, but okay.
• 4:58
  SPEAKER_02: But but but this is the beauty about it.
• 5:00
  SPEAKER_02: Um we we get a individual like Sonali into our show, and we need to get into the business straight away.
• 5:09
  SPEAKER_02: We need to ask these things, we need to get we I I want all of you guys to understand uh this individual has quite a lot of quite a lot of uh uh experience and knowledge in the financial planning.
• 5:23
  SPEAKER_02: And when it comes to compliance, um trust me, she's very good.
• 5:29
  SPEAKER_02: Okay, right, enough of that.
• 5:31
  SPEAKER_02: So Sunali self-managed fund.
• 5:36
  SPEAKER_02: Simple mom and dad want to set up one.
• 5:38
  SPEAKER_02: Now they want to uh invest in their superanimation.
• 5:43
  SPEAKER_02: They uh husband could have 200,000, wife could have uh 200,000 or maybe 250.
• 5:49
  SPEAKER_02: Um just to put summising on the cake casual.
• 5:52
  SPEAKER_02: Wife could have 250, husband could have 200,000,$450,000 in the self-managed superfund.
• 5:59
  SPEAKER_02: What kind of investments can they do?
• 6:03
  SPEAKER_00: As usual, you're up to your usual antics asking me um what kind of investment can these hypothetical guys do?
• 6:10
  SPEAKER_00: It depends on their risk profile.
• 6:13
  SPEAKER_00: I keep saying this all the time.
• 6:14
  SPEAKER_02: Let's see, listen.
• 6:16
  SPEAKER_02: Let's put it to a level that the risk profile is.
• 6:21
  SPEAKER_00: No, let's answer it this way.
• 6:22
  SPEAKER_00: Hang on, hang on.
• 6:23
  SPEAKER_00: Let me answer it this way.
• 6:24
  SPEAKER_00: What are the investments that you can do in an SMSF first?
• 6:28
  SPEAKER_00: So you can you do the usual, you know, shares, exchange traded funds, managed funds, bonds, term deposits.
• 6:36
  SPEAKER_00: Those are standard your typical vanilla sort of investments that you could do possibly even in your retail super funds, where um, you know, some of our clients um contribute to.
• 6:48
  SPEAKER_00: Um some of the extra investments you can do in an SMSF is one you can invest in residential and commercial property, direct property.
• 6:58
  SPEAKER_00: So that is, you know, typically the reason like a majority of people set up to buy property in the SMSF.
• 7:05
  SPEAKER_00: Um you can also do things like collectibles, but there are a lot of restrictions around that.
• 7:14
  SPEAKER_00: Um, so we we need to be mindful of that.
• 7:17
  SPEAKER_00: But those are some of the investments that you could do.
• 7:19
  SPEAKER_00: So there's a lot more um flexibility when it comes to um an SMSF when compared to your standard industry fund or your you know larger sort of retail fund.
• 7:34
  SPEAKER_02: Interesting.
• 7:34
  SPEAKER_02: So that is that is pretty much, I would say, what 60-70% of self-managed super owners are doing these kind of investments.
• 7:44
  SPEAKER_02: Yeah.
• 7:44
  SPEAKER_02: So is that right?
• 7:45
  SPEAKER_00: Yeah.
• 7:45
  SPEAKER_00: So typically, one of the questions I usually ask people when they want to set an SMSF up is why they want to do that.
• 7:53
  SPEAKER_00: What are you not getting in your current fund that you want to go and do your own super fund?
• 7:59
  SPEAKER_00: So usually, majority of the time, people do it because they want to invest in property.
• 8:03
  SPEAKER_00: Um, one of the things that comes with that is the fact that with property, you can leverage.
• 8:10
  SPEAKER_00: So I think I talked about this months before as well, where you know, in a in a standard sort of uh super fund, you are investing just your account balance.
• 8:22
  SPEAKER_00: Whereas in an SMSF, you can have the account balance and borrow against that as well, leverage up and invest in a property so that your returns are on the leveraged amount as well.
• 8:35
  SPEAKER_00: So you get a larger return.
• 8:36
  SPEAKER_03: So um can you simplify it?
• 8:40
  SPEAKER_00: Yeah.
• 8:40
  SPEAKER_00: So let's say you have a hundred thousand dollars in your superfund outside outside an SMSF, you can invest that at 10%, you will get$10,000.
• 8:52
  SPEAKER_00: But within an SMSF, you can use that same hundred thousand, you can borrow a further, let's say, five hundred thousand and then invest six hundred thousand.
• 9:06
  SPEAKER_00: And then if you get 10% return on that, that's$60,000.
• 9:11
  SPEAKER_00: So you get the benefit of leveraging inside an SMSF, um, which is not something that you typically see in your standard sort of industry funds.
• 9:22
  SPEAKER_00: Um, so that is one of like the biggest benefits of um doing an SMSF for most people, because you get larger returns because you can leverage.
• 9:34
  SPEAKER_02: So now this is why you gotta have a financial planner to set your SMSF.
• 9:40
  SPEAKER_02: Some of the things what she explained, I didn't even know.
• 9:43
  SPEAKER_02: Trust me.
• 9:45
  SPEAKER_02: I've been in this industry for a long time.
• 9:47
  SPEAKER_00: No, can I say there's a lot more to it.
• 9:50
  SPEAKER_00: Why you need to have a financial plan to set it up?
• 9:53
  SPEAKER_00: I'm gonna come to it as opposed to just going and doing it yourself, because there are risks in rolling out of your existing funds into the SMSF.
• 10:04
  SPEAKER_00: There are benefits that you lose.
• 10:05
  SPEAKER_00: So you want to make sure that you know things like insurance um that you would lose in your current fund when rolling into the SMSF.
• 10:12
  SPEAKER_02: So do they need to set it up in the name of SMSF?
• 10:15
  SPEAKER_02: Yeah, yeah.
• 10:16
  SPEAKER_02: Correct.
• 10:17
  SPEAKER_02: So these are the these are the things that you that you need to be mindful of.
• 10:20
  SPEAKER_00: Yeah.
• 10:21
  SPEAKER_00: Checklist.
• 10:21
  SPEAKER_00: Checklist, yes.
• 10:23
  SPEAKER_00: There are the you could also have made contributions into your um current retail fund uh on which that you wanted to claim tax deductions, for example.
• 10:33
  SPEAKER_00: So if you roll it over without doing that, then you would lose the came on tax deductions.
• 10:38
  SPEAKER_00: So there are lots of things, um, you know, just small, small things like that that a lot of people aren't aware of that can cost you.
• 10:46
  SPEAKER_00: So yeah.
• 10:47
  SPEAKER_02: So guys, uh uh the please remember this is general advice.
• 10:51
  SPEAKER_02: This is yes, financial advice, right?
• 10:54
  SPEAKER_02: Uh, this is general advice.
• 10:56
  SPEAKER_02: Um I'm gonna ask a few questions from Sonali for me to understand quite a lot of things.
• 11:02
  SPEAKER_02: Now, a question I wanted to ask you.
• 11:06
  SPEAKER_02: Now, everybody, everybody wants to go down the path of uh no uh uh uh manage funds, property, residential, commercial, shares.
• 11:17
  SPEAKER_02: They all want to do this, right?
• 11:19
  SPEAKER_02: Now it's like you know, buying a car.
• 11:22
  SPEAKER_02: Everybody wants to buy a car.
• 11:25
  SPEAKER_02: I want to know from you.
• 11:28
  SPEAKER_02: You know, there are people who want to do things differently.
• 11:33
  SPEAKER_02: Sometimes, you know, you have seen those kind of people.
• 11:38
  SPEAKER_02: Can I ask you a question, very straightforward question?
• 11:40
  SPEAKER_02: Can a person can a person buy classic cars under self-managed super fund?
• 11:49
  SPEAKER_00: The short answer is yes, you can.
• 11:54
  SPEAKER_00: But there's a lot of um caveats around it.
• 11:59
  SPEAKER_00: It's a restricted asset.
• 12:01
  SPEAKER_00: There are a lot of rules around it.
• 12:03
  SPEAKER_00: If you are thought to be there, even if there's even a hint of personal use with these sorts of assets, you will be in breach and then the ATO will be all over you.
• 12:16
  SPEAKER_02: So but you can you can use the classic cars into into a business perspective and start yielding on them, right?
• 12:24
  SPEAKER_00: I am not gonna answer that.
• 12:26
  SPEAKER_02: So you can rent it out.
• 12:27
  SPEAKER_00: I'm not gonna answer that.
• 12:29
  SPEAKER_02: So far?
• 12:30
  SPEAKER_02: No.
• 12:30
  SPEAKER_02: No.
• 12:30
  SPEAKER_02: So she's now I'm not gonna answer.
• 12:32
  SPEAKER_02: So, ladies and gentlemen, you know, uh, she this is how scenarios.
• 12:36
  SPEAKER_02: Yeah, she she she she will she will advise, she will give the uh transactions, how it needs to be done.
• 12:46
  SPEAKER_02: But uh, you know, a person like me when asked things uh questions like that, she rolls her eyes and she's like she's right now in front of me saying, What are you doing?
• 12:54
  SPEAKER_02: What are you doing?
• 12:55
  SPEAKER_02: What are you asking?
• 12:55
  SPEAKER_00: No, I don't want to put um like incorrect information out there or give like very, how do you say it, um the risk takers ideas or definitions.
• 13:09
  SPEAKER_02: So I was I was I was actually to be to be fair to the question, I was coming from a business aspect of it, whether you can buy classic cars and start renting under self-managed super fund.
• 13:18
  SPEAKER_02: But okay, let's make it simple.
• 13:19
  SPEAKER_02: Now you have passions.
• 13:21
  SPEAKER_02: A lot of people have passions, right?
• 13:24
  SPEAKER_02: A lot of people have passions.
• 13:26
  SPEAKER_02: Can they invest in in their self-management?
• 13:30
  SPEAKER_02: I I have seen it, I have read read about these kinds of things.
• 13:33
  SPEAKER_02: Uh whiskey collection collectors, gin collectors, wine collectors.
• 13:40
  SPEAKER_03: Uh is is there something that can be done from sales management funds as well?
• 13:46
  SPEAKER_00: See, yes, again, you can invest in collections, but my concern there is you said passions.
• 13:55
  SPEAKER_00: SMSF is meant to provide retirement benefits, not meant to, you know, satisfy and may and um you know uh work in with your passion.
• 14:08
  SPEAKER_00: So if you are a whiskey lover who wants to collect whiskeys and have it at home and display it and you know, um show off your whiskey collection, no, you can't do that.
• 14:19
  SPEAKER_00: You can't show show.
• 14:20
  SPEAKER_00: No, so it's there are there are rules around these restricted assets.
• 14:25
  SPEAKER_00: So things like you have to have insurance in the name of the SMSF, it has to be done within a certain number of days, it has to be stored securely, and it can never be at home for personal use.
• 14:38
  SPEAKER_02: You have to place totally different place, can't be at your friend's place, it to be right, it needs to be a uh a proper place that you uh store it.
• 14:52
  SPEAKER_02: You can display it in that place, right?
• 14:55
  SPEAKER_00: It can't be at a friend's place.
• 14:57
  SPEAKER_00: No, it can't.
• 14:58
  SPEAKER_00: You're trying to come up with all sorts of ways how to circumvent this.
• 15:02
  SPEAKER_00: No, you can't be.
• 15:03
  SPEAKER_00: Because the reason is you get audited every year, you have to provide proper documentation to show the storage, the insurance, you know, the auditors, if they, you know, like I said, get even a hint of it being used for personal use, they have to red flag it.
• 15:21
  SPEAKER_00: And it can potentially be a breach.
• 15:23
  SPEAKER_00: So you really don't want to do that.
• 15:24
  SPEAKER_00: This is your retirement funds, you don't want to risk doing that.
• 15:28
  SPEAKER_00: If you're genuinely um thinking that, you know, a whiskey collection or whatever particular barrel of whiskey or whatever it is is a good investment, yes, then go ahead and do it.
• 15:38
  SPEAKER_00: But insure it properly, store it properly, and have the necessary documentation every year for that.
• 15:43
  SPEAKER_00: So um, yeah.
• 15:44
  SPEAKER_02: Yeah, uh thank you, Sonar.
• 15:46
  SPEAKER_02: Look, guys, uh the the questions I ask, it's it's these are sophisticated investors who eat these things, by the way.
• 15:54
  SPEAKER_02: Right?
• 15:54
  SPEAKER_02: You need to know about your whiskey, you need to know about your uh wine or classic cars, you keep art art.
• 16:01
  SPEAKER_02: Yeah, I mean the list goes on.
• 16:03
  SPEAKER_02: Yeah, so it it it when I when I mention about the passion, passion is not for you to go and consume it.
• 16:09
  SPEAKER_02: That's passion is the education behind these assets, where they come from, who who made them.
• 16:15
  SPEAKER_02: The they are I I've I've met people who who who knew uh the the person who created the car uh uh uh what what do you call these vehicles carbonators or something like that?
• 16:28
  SPEAKER_02: That person knew about the person's name who who who who made it to that vehicle.
• 16:33
  SPEAKER_02: So this guy is next level, right?
• 16:35
  SPEAKER_02: So these are the people who go and invest in these cars because these guys really never drive the car.
• 16:40
  SPEAKER_02: It's for them to see it.
• 16:42
  SPEAKER_00: So you mean you can't even have it in your driveway.
• 16:46
  SPEAKER_02: It needs to be uh uh stored in a secure place like Sanali C.
• 16:50
  SPEAKER_00: You can't take it to weekend rallies, no.
• 16:54
  SPEAKER_00: So yeah.
• 16:55
  SPEAKER_00: So uh it has to be genuinely an investment, not something you do because you know you like to do.
• 17:01
  SPEAKER_02: So so so so guys, don't get uh please don't get ideas from these.
• 17:06
  SPEAKER_02: Uh this this is this is I'm a I'm a passionate guy when it comes to certain types of cars, not every car, they said certain types of cars.
• 17:13
  SPEAKER_02: So uh there are vehicles uh I want to buy, and I already have few um that I don't even want to drive, but fortunately they're not under myself, man.
• 17:24
  SPEAKER_02: It's super fun.
• 17:25
  SPEAKER_02: So if I want to, I can drive.
• 17:27
  SPEAKER_02: Now, Surali.
• 17:29
  SPEAKER_00: I d I have to say one thing though.
• 17:31
  SPEAKER_00: So I said um a majority of the assets that you buy can't be for personal use.
• 17:37
  SPEAKER_00: There is one small exception to the rule uh for business.
• 17:41
  SPEAKER_00: Um, so like the two of us also, we have our office space owned through our SMSF.
• 17:48
  SPEAKER_00: So um a lot of people are interested in that.
• 17:52
  SPEAKER_00: So for that to happen, you have to have everything at arm's length, market value.
• 17:59
  SPEAKER_00: So transactions.
• 18:01
  SPEAKER_00: So um the rent that your company pays to what's the property needs to be proper market terms.
• 18:10
  SPEAKER_00: So you will have to provide evaluation, you will have to provide the lease agreement, all of the expenses related to it, all of it gets audited.
• 18:20
  SPEAKER_00: But if it is all about board, yes, you can use your SMSF to buy your business property that you operate out of.
• 18:31
  SPEAKER_02: Within the market conditions, you need to rent your business.
• 18:34
  SPEAKER_02: Correct.
• 18:35
  SPEAKER_02: Essentially, I think I don't think it's it's own occupied, right?
• 18:39
  SPEAKER_02: It it uh yourself management fund is a third party, is a separate entity who rents it's almost like, yeah, you consider it as a completely different person.
• 18:49
  SPEAKER_00: Um, but that is one of the powerful strategies that is available in an SMSF and you rent a house to yourself to live.
• 18:56
  SPEAKER_02: No, you can't even now, guys.
• 18:58
  SPEAKER_02: Now the this is this is why it's it the complexity of these things you can to learn.
• 19:03
  SPEAKER_02: Yeah, so you cannot rent a house for you to live, but you can rent uh commercial property for you to operate your business.
• 19:12
  SPEAKER_02: Yes.
• 19:14
  SPEAKER_02: I hope I made it clear.
• 19:15
  SPEAKER_02: Right.
• 19:16
  SPEAKER_02: So now service management funds done, investors invest investments are done correctly, right?
• 19:24
  SPEAKER_02: You come to 60, 65 years of age.
• 19:28
  SPEAKER_02: What do you do?
• 19:30
  SPEAKER_00: So you can do the same sort of things you would do in a normal industry fund or retail fund.
• 19:35
  SPEAKER_00: You can convert your money into a pension, um, draw money from it to live.
• 19:40
  SPEAKER_02: Like a salary, you mean?
• 19:42
  SPEAKER_00: Yeah.
• 19:42
  SPEAKER_00: So if with anything with your superannuation funds, once you retire, you can convert it into a pension.
• 19:48
  SPEAKER_00: And it's one of the most tax-effective vehicles out there.
• 19:51
  SPEAKER_00: So you draw almost like a salary to live on every month or quarter or whatever frequency you want.
• 19:57
  SPEAKER_00: Um, and within an SMSF as well, you can do that.
• 20:00
  SPEAKER_00: So there are things that we do, like if you do have property in there, if you're thinking of selling some of them, we do the timing accordingly to make sure, you know, it's the most tax-effective way of doing it.
• 20:11
  SPEAKER_00: Um, so yeah, there are a lot of planning um items we have around that age, when people come to that age when they have SMSF.
• 20:21
  SPEAKER_00: So um yeah, can't get into all of it right now.
• 20:24
  SPEAKER_00: But um, yeah, there are a lot of powerful strategies that we can do.
• 20:28
  SPEAKER_02: So basically, listeners, if you if you take care of yourself manage super fund or your superanimation in a in a manner that's supposed to work for you, you will have a good retirement.
• 20:42
  SPEAKER_02: Is that is that is that fair to say, Sanat?
• 20:46
  SPEAKER_00: Yeah, it depends obviously on uh what you've been doing in the accumulation phase, but if you've you know um made use of some of these strategies and other you know contributions into super and really thought it out and planned it properly, yes, you will have a good retirement.
• 21:02
  SPEAKER_02: Yeah, so there you go.
• 21:03
  SPEAKER_02: All right.
• 21:07
  SPEAKER_02: Last week at the at this episode, what are the three things or five things?
• 21:14
  SPEAKER_02: It doesn't matter whether you want to go three or five, what are the most important three things or five things that you will tell our listeners if you're planning on doing a self-managed superpun for yourself and thinking about retiring in a classy manner or whatever the way that you want to retire?
• 21:34
  SPEAKER_00: So I think one thing that I always say is you have to look at the account balance that you have because I I keep talking, I we didn't touch on the fees.
• 21:45
  SPEAKER_00: So SMSFs usually have flat fees.
• 21:48
  SPEAKER_00: Uh, accounting, auditing, those sorts of fees are a standard dollar figure.
• 21:52
  SPEAKER_00: So it's not a percentage of your account balance.
• 21:55
  SPEAKER_00: So that's why I keep saying it has to be above a certain threshold.
• 21:58
  SPEAKER_00: So typically we say 200 to 250 um uh account balance as a whole for it to be you know worthwhile.
• 22:06
  SPEAKER_00: Otherwise, you're paying quite a bit in fees.
• 22:08
  SPEAKER_00: So just be mindful of that.
• 22:10
  SPEAKER_00: Also be mindful as trustees, you make all the decisions, you're responsible for it.
• 22:16
  SPEAKER_00: There's not a lot of protections in place for an SMSF where you know if you win a retail fund, there might be, you know, um, you know, like uh complaints resolution um options available to you, but with an SMSF, the the onus is on you to manage the funds.
• 22:35
  SPEAKER_00: Um so it's your responsibility.
• 22:37
  SPEAKER_00: It's your responsibility.
• 22:38
  SPEAKER_00: It's your base.
• 22:40
  SPEAKER_00: Managed.
• 22:42
  SPEAKER_00: Yeah, so uh there's that.
• 22:45
  SPEAKER_00: So like I said, you have to consider the cost versus scale, the fact that you know it it's entirely your responsibility.
• 22:52
  SPEAKER_00: Um, like I said, there are a lot of you're bound by the same rules, essentially, that the bigger super funds are bound by.
• 22:59
  SPEAKER_00: So that means the ATO expects you to know all these rules and to make sure that you abide by them.
• 23:07
  SPEAKER_00: So non-compliance is non-negotiable.
• 23:11
  SPEAKER_03: Okay.
• 23:12
  SPEAKER_00: Um so uh if yeah, so auditing, ATO reporting, all of that is essential.
• 23:18
  SPEAKER_00: There are strict rules on what you do with the funds.
• 23:21
  SPEAKER_00: You can't loan yourself money, pay it back later, do all these funny things like that.
• 23:27
  SPEAKER_00: You can't loan money to family members and you know, all do all these funny things thinking no one has oversight.
• 23:33
  SPEAKER_02: But can you use an SMSF for lending purposes?
• 23:36
  SPEAKER_00: You can.
• 23:38
  SPEAKER_02: Yes, it's the fund to lend to other people to earn interest.
• 23:41
  SPEAKER_00: Yes, you can.
• 23:44
  SPEAKER_00: But then again, so that's most of our private lending, you know, we do it that way.
• 23:51
  SPEAKER_00: Um obviously, not that we don't we don't use the money that our clients have with SMSF to lend to other people.
• 23:59
  SPEAKER_00: Uh that's the lending side.
• 24:01
  SPEAKER_02: Entities have been set up to do that specifically, man.
• 24:04
  SPEAKER_02: Yeah.
• 24:04
  SPEAKER_02: Um Ali.
• 24:06
  SPEAKER_02: Yeah.
• 24:06
  SPEAKER_02: It's about a very good 25 minutes of SMSF.
• 24:11
  SPEAKER_02: SMSF, right?
• 24:12
  SPEAKER_02: I think a lot of people could get bored, but this episode, I think, is one of those episodes that people are not bored because we are straight into the point.
• 24:21
  SPEAKER_02: It is a boring sub subject, but we were uh in pretty much onto the point.
• 24:26
  SPEAKER_02: I want to ask you, is it for is SMSF is it for everybody or not?
• 24:32
  unknown: No.
• 24:32
  SPEAKER_02: Can everybody give you?
• 24:34
  SPEAKER_00: It's definitely not for everybody.
• 24:35
  SPEAKER_00: Everybody can do it.
• 24:36
  SPEAKER_00: There's no restriction.
• 24:38
  SPEAKER_00: However, they shouldn't do it, right?
• 24:41
  SPEAKER_00: Because you need to know what you're doing.
• 24:43
  SPEAKER_00: For one, you need to have enough of an account balance, two, you need to have um enough of knowledge about these things.
• 24:50
  SPEAKER_00: Um, because as trustees, you're responsible.
• 24:53
  SPEAKER_00: You can get, you know, professional guidance, you can get the right strategies.
• 25:00
  SPEAKER_00: So, you know, we we have quite a few clients um that we know um who come to us for these things.
• 25:06
  SPEAKER_00: So with the right strategy, professional guidance, all of that, it can be a powerful retirement tool.
• 25:13
  SPEAKER_00: It is a very powerful retirement tool.
• 25:16
  SPEAKER_02: Um fellow listeners, I can tell you this from the experience I have seen.
• 25:22
  SPEAKER_02: Um, pretty much majority of my of our TFS high net worth clients have self-managed super funds and they are they are accumulating assets, they are they are creating the wealth inside self-managed super fund.
• 25:39
  SPEAKER_02: Their retirement is next level because they understand what they are doing, and at the same time, they give the trust to the right professional.
• 25:51
  SPEAKER_02: You really need to get this thing right.
• 25:54
  SPEAKER_02: I can be very blunt about this because I'm not the financial planner, so now it's a financial planner.
• 25:59
  SPEAKER_02: I will tell this you cannot just do financial planning and and get advice from a person who just walks around, who just bought one, two, maybe one property, two property, three properties.
• 26:12
  SPEAKER_02: You cannot do that.
• 26:13
  SPEAKER_02: Okay, you cannot go and take advice from your accountant who doesn't have a financial planning license.
• 26:19
  SPEAKER_02: You cannot do that.
• 26:20
  SPEAKER_02: It's a very different subject at all.
• 26:23
  SPEAKER_02: People who understand this will agree.
• 26:26
  SPEAKER_02: People who don't understand this will not agree.
• 26:29
  SPEAKER_02: I know that for a fact.
• 26:31
  SPEAKER_02: But if you really want to make some money, if you really want to secure your retirement, you gotta have a financial planner in your portfolio who will make sure that you will do the right thing and you will have a secure retirement.
• 26:48
  SPEAKER_02: And with a good amount of money for a bit of fun when you retire.
• 26:52
  SPEAKER_02: Sonali, thank you so much for coming.
• 26:54
  SPEAKER_02: It's a it's a beautiful episode.
• 26:57
  SPEAKER_02: I loved it.
• 26:58
  SPEAKER_02: I learned a lot.
• 26:59
  SPEAKER_02: I I I hope that I can get you again and ask a little bit more about SMSS and what are the other things we can do.
• 27:08
  SPEAKER_00: So, guys, that is really that's another another episode.
• 27:12
  SPEAKER_00: Thank you, Sonali.
• 27:13
  SPEAKER_00: Thank you for having me.
• 27:15
  SPEAKER_01: Thank you for tuning in to another episode of the TFS Podcast, where we turn knowledge into action and big goals into real results.
• 27:24
  SPEAKER_01: Now, don't forget to like and subscribe and share this episode with someone working towards their next financial step.
• 27:34
  SPEAKER_01: Now, with that being said, until next time, keep building.