How do you know if an SMSF is right for you and that you need one? Do you know the responsibilities that come with being a trustee and what happens if you do not comply to the rules and laws of the government? It is important to know what you are getting into and if you are cut out for it, when starting something new. Here are a few points to consider before starting an SMSF account.
Know where you want to be – Everyone is going to have different aspirations after their retirement. Understanding how your investment strategy can help you achieve your goals is crucial to a great outcome.
Understanding risk – Once the goals are clear, it is important to understand your risk profile. You need to know how much risk are you ready to take and how much risk can you afford.
Investing your funds – Investing in the market can sometimes be scary but rewarding in the long run. There is no surety of when the market will rise or fall, but over the long term there are always benefits to look forward to.
Knowing where to invest – There is no proven formula of what will work and what won’t. But if SMSF is well diversified across Australian Equities, International Equities, Domestic Fixed Interest, International Fixed Interest, Property and Cash there are greater chances of reducing risk.
Understanding your role – Not knowing what you are getting into can cost you a fortune. Before you set up a SMSF, make sure you have good governance in place and an understanding of what you will ultimately be responsible for.
Have anymore questions in mind? Look forward to our next blog on more points to consider before starting an SMSF. We are there to guide you on anything you need to know in regards to SMSF, write to us at [email protected] or call us on 1300 707 326