The Super Cure

By Adam Carmody, CFP®

Inevitably we all need to test the health of our super, whether we do it now or at retirement. Many do this health check far too late and suffer the consequences.

Oddly we check the health of our bodies, our businesses, our pets, our cars and even our teeth, though many forget the health of their super and leave it to others to worry about on their behalf. For this reason I thought I’d suggest we take a minute for it, given we have a grand chance to improve it.

To start with let’s imagine super as a rose garden. A rose garden is not that dissimilar to super after all, it benefits and suffers from environmental factors, most of which can be addressed.

Your Super is a Rose Garden

Imagine you have a rose garden. It receives fertiliser, rain and sun regularly from the environment – like your super and the compulsory or personal contributions you make, the fees you pay and investments you choose.

Do you leave your roses in the hands of a gardener? & Did you choose him?

We often are left to hope that the gardener selected for us, or by us, is tending to our garden in the best way they know how – compulsory super may mean you have a manager you didn’t choose investing your money.

Did you forget about your roses?

Many times we see people that don’t worry about the state of their roses, worse still they may even forget they exist.

Do you pay more than one gardener?

Some of us start with more than one rose garden and pay fees to several different gardeners. All we can do is hope our gardeners are doing their best for us. What is their best and is it good enough to save the roses.


What can we do to improve our rose garden?

With a Self-Managed Super Fund (SMSF), YOU are the Gardener for your rose garden.  You can:

  • Water the roses whenever you want;
  • Fertilise them;
  • Prune them;
  • Protect them from the weather; &
  • Relocate them if they’re not getting enough sun.

You can make the necessary choices to ensure that by the time you reach your desired retirement, all you have to do is “sit back and smell the roses!”

SMSF’s are as individual as you are.

Self Managed Super Funds (or DIY Super Funds as they have become commonly known) have increased in popularity over the past 5 years due to their ability to allow you to decide your own future, to build and secure your wealth now for your retirement, and to protect and nurture your future estate for family.



  • CONTROL over where your money is invested;
  • FAMILY FUND where up to four members of your family can reap the rewards;
  • FLEXILIBITY to make changes to your investment strategy as you need to;
  • Greater SECURITY for you and your family with flexible insurance options;
  • The right PROTECTION in place.

Want to hold a direct property in your super?

In recent times, the Superannuation industry has been flexible to offer choice to an individual about how Super contributions and investments are managed. SMSFs are even able to borrow to purchase an investment property.

What this wonderful news means is:

  • Having Control over a larger asset than presently (property);
  • Ability to Leverage an asset;
  • Greater Flexibility of investment choices;
  • The opportunity for members of your family to Pool Their Super together to more greatly enhance retirement benefits;
  • Tax Savings and benefits;
  • Diversification of investment away from shares or managed funds
  • 10% Capital Gains if you hold the property for more than 12 months and potentially NIL if the property is sold when the fund is in pension phase.

The Power of Leverage

The following is an example on how a Self Managed Super Fund could work for you:

EXAMPLE – Managed Funds versus an SMSF invested in Property

When you compare investing in managed funds to an investment property, your return can be thousands more!. For this example let’s take the average couple, Joe and Alex both aged 45, with average super balances and run the numbers on using their superannuation to buy property versus investing in a managed fund.

The cash flow figures are provided below for year 1.


 Cash Flow Calculations




Super salaries  $  60,000  $  60,000  $ 120,000
Prospective purchase  $ 400,000
Super Balances  $  75,000  $  75,000  $ 150,000
Upfront Costs
SMSF Set Up Cost  $         –  $         – -$    2,200
Structure Cost  $         –  $         – -$    3,300
Stamp Duty  $         –  $         – -$    6,000
Total Upfront Costs  $         –  $         – -$  11,500
After Costs Deposit  $ 138,500
Super Guarantee (After Tax)  $    5,400  $    5,400  $    9,180 *
Possible Salary Sacrifice  $    5,500  $         –  $    4,675 *
Likely Rent  $         –  $         –  $  16,000
Total Inflow  $         –  $         –  $  29,855
Total Expenses
Interest  $         –  $         – -$  24,843
Ongoing FP Advice  $         –  $         –  $         –
Ongoing Accounting Fee  $         –  $         – -$    3,000
Agents Cost  $         –  $         – -$    1,120
Incidentals – Maintenance etc.  $         –  $         – -$    1,500
Total Expenses  $         –  $         – -$  30,463
Net Cash Flow  $         –  $         –  $       243
Required Loan  $         –  $         –  $ 261,500
LVR  65%


  • Total Contributions are after tax.
  • Capital growth on managed funds – 5%
  • Income from managed funds – 4%
  • Capital growth on property – 7%
  • Rental – 4% (reduced from 5% for the bank)
  • Interest Rate Assumption – 9.5% (Interest rates are assumed to be 2% higher by the bank when assessing finance, conservatively these have been used here).
  • Identical contributions go into the managed funds as do the SMSF example above.
  • Rental percentage remains the same and costs index to inflation.
  • The surplus accruals of funds where income outweighs the cost of running the SMSF are invested in line with the managed funds.
  • Totals

    SMSF  with

    Property Loan

    SMSF in
    Managed Funds


    5 yrs

    $   366,588

    $     320,128

    $       46,460

    10 yrs

    $   749,432

    $     584,572

    $     164,860

    15 yrs

    $ 1,381,337

    $     991,745

    $     333,157


    The above example indicates just how powerful leverage can be in superannuation, where the assumptions were accurate the outcome for Joe and Alex pictured above would be well worth the effort of their retirement.

    Do you think it’s worth a second look? – Finding out if this suits you takes very little time, and look at the potential benefits!

    A SMSF with a property investment might just be the vehicle by which you and your family can enhance your financial future, allowing you to accumulate the necessary funds required to accommodate your lifestyle choices during retirement.

    Notably, this is a specialist area that requires knowledge of your options, and circumstances. Should you wish to discuss your opportunity and want our help let us know by replying to this email and setting up a no-obligation appointment. The email response can be done by clicking here.

    Kind regards

    Adam Carmody CFP®

    Disclaimer:The analysis in this projection is provided to you as general information only and in no form represents investment recommendations or advice. It does not take into account your personal situation, attitudes to investing or circumstances. All due care and diligence has been taken by Investors Direct and its representative in the preparation of this information. Investors Direct accept no responsibility for any errors, inaccuracies or omissions or for loss or damage suffered by any person as a result of any errors, inaccuracies or omissions from this report.
    Please also note that performance herein is no guarantee of future outcomes. The returns provided in this report are for comparison only and should not be regarded as an indication of actual or potential future returns. The returns and principal value of an investment will fluctuate so that its value may be worth more or less than their original cost. Upon examining this data if there is anything you disagree with, or do not understand, please contact us on 03 98687500.


1300 663 836

Can a SMSF help you achieve your goals?

Go to our Events to book your place in a SMSF Workshop near you

Click here to download the Property Advisory Guide

follow us

Investors Direct Financial Group

Investors Direct Financial Group (IDFG) was established in 2001.
Our mission is to help our clients achieve and maintain their financial freedom.

Members of the IDFG Group include:
  • Nanmon Financial Services Pty Ltd, trading as Investors Direct Financial Group (ABN: 52 097 697 820 ; ACL: 402950)
  • ID Property Advisory Pty Ltd (ABN: 69 141 716 412 ; Real Estate Licence: 071792L)
  • Investors Direct Financial Planning Pty Ltd(ABN: 50 141 139 228 ; AFSL: 385827)
  • 8 Star Homes Pty Ltd (ABN: 83 135 066 876)