Self-managed Super Fund can give you bad returns if not managed properly. If you are not from a financial background, it is bound to happen.
Let’s learn about the 10 common mistakes to avoid in SMSF:

SMSF Beginner Mistakes

1. Not thinking wisely
Many beginners, who are excited about SMSF returns and investment schemes, jump in very early without thinking wisely beforehand. The fund requires a certain capital and financial liquidity on your end to be set up and run smoothly. Do not do it without consulting your financial aid.

2. Ignorance is NOT Bliss
Some people think that as the name suggests they can really self-manage their own money. But ignorance is not bliss when it comes to money.

SMSF Trustee Mistakes
3. No Planning
An investment only fulfils its purpose if it is done in a planned manner. SMSF trustees make a common mistake in SMSF by not planning in advance and then facing the heat for their wrong decisions.

4. Poor investment choices
Since financial knowledge is a pre-requisite but not all SMSF trustees are financially wise – poor investment choices are made. This is the 4th common mistake to avoid in SMSF.

5. Paying unnecessary fee
If you plan and pay on time all SMSF trustees can save themselves from penalties and unnecessary fines. Some get started and hire people who charge them a bounty to set up their SMSF. So, the costs must be discusses to avoid the mistake of paying unnecessary fee.

SMSF Auditing Mistakes
6. Non-Compliant Penalties
ATO is strict with SMSF returns and other income returns. The investments and withdrawals are subjected to law and rules of the ATO. You need a specialist SMSF auditor to help you here; otherwise you will be charged non-compliant penalties.

7. Error in Financial Reports
Self filing your return is against the Superannuation Industry Supervisory Act, before it being audited by an approved auditor. Hence, get your SMSF audited and avoid errors in financial reports.

8. Error in Income Tax Returns
SMSF Auditing must be done by an approved auditor otherwise the errors in income tax returns can cause troubles. This is a very common mistake SMSF members should avoid.

SMSF Property mistakes
9. Location of Property
Property investments must be diversified to get maximum gains from it. Location of property is crucial and it must be bought in such an area where many developments are happening. Do not make the mistake of investing everything on one property or an area with single industry base.

10. SMSF Borrowing not compliant with ATO
There are certain restriction on borrowing from your SMSF, which all trustees interested in property, should know before setting up an SMSF. This is the last common mistake to avoid in SMSF.

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