Self Managed Super Funds: Benefits and Risks of Going Solo

Self managed superannuation funds have really taken off within the last few years and you cannot blame as to why they are now looking at these funds. There is a lot of potential and promise with them as they really appeal to thousands of people worldwide and it’s not slowing down either. However, are they really as good as they appear? What are the risks and benefits of going solo and choosing a self managed super fund?

You Have All the Control

You are effectively the trustee with these funds so that can be a real advantage to say the least. The great thing about this is that you are the one who remains in control and that means you can be the one to say how much money you’re contributing. You can also have the final say over which investments you are going to choose which again is fantastic. A lot of people find they are happier with their self managed super fund since they get the control they so desperately need. It’s something that can prove more than useful and it can put your mind at ease also.

You Need To Educate Yourself before Going Solo

However, while you’re the one effectively in control of your super fund, it’s not always plain sailing. You have to know a little about these for you to see any good results. This isn’t all about luck; you absolutely have to understand how the self managed superannuation funds work. If you don’t know a little about them things can go badly within a very short space of time. That is a downside really because educating yourself on such things can take up a lot of time and energy. For some, they don’t want to have to do this.

Flexibility and Great for the Family

There is great flexibility however with a self managed super fund and that is fantastic. Being able to have a little more flexibility can ensure you feel at ease and aren’t rushed into making a decision about any investments which is great. This gives you plenty of time to look at what investment options there are available to you personally and which offers the most potential. What is more, it’s good as you can bring the family into this and pool money together. Of course, this has to be something you like to do but again it does offer so much potential.

If You Don’t Have Much to Invest, They Aren’t As Rewarding

In order to use a self managed superannuation fund, you need to have a bit of spare cash lying around. You might think it’s OK to go into this with say a few hundred but at times it isn’t going to be as effective as say when you have thousands or indeed millions to work with. That is why these are so popular with big businessmen and women because they have the money to play with. Self managed superannuation funds are great but if you don’t have a lot of money to contribute or start up with then it can be not as profitable. What is more, when you invest, even with these funds, there is the big risk of losing it all.

Making a Careful Decision

Self managed funds look great and they can be great if you’re willing to spend time learning about them and making the right investments. However, these take a lot of work especially if you know very little about these things, never mind investing. It’s a personal choice at the end of the day but you need to look at the risks as well as the positives. Yes, there is the potential to make money but to also lose it so you have to be very careful indeed. A self managed super fund does offer a lot of promises but it must work for you personally.