Super Contributions, Shares or Invest in Property?

Why would I invest in property instead of shares or increased super contributions to build wealth?

Following the market upheavals since England voted to leave the European Common Market, I have a series of questions from a listener to my radio segment on Emerald 4HI.

An answer to the first question above.

If you are into shares, now would appear to be a good time to buy as markets overreact in times of fear, but in the long term, you are still better off investing in property than shares. Why?

Residential property has the lowest risk and the highest ratio of profit to funds employed, in other words, because it is safe and low risk, your borrowing ratio is higher and interest rates are lower.

The next question is, “why not increase super contributions to my Superannuation?”

Unless you set up a Self Managed Super Fund (SMSF) to build a property portfolio, I would not suggest contributing more to Super. Why?

The Government keep changing the rules and generally you can’t access the funds until retirement. Most Superannuation is invested in share markets and accordingly, most Superfunds have again suffered heavy losses in recent days. Most people wouldn’t realise how much the value of their super has gone down in the last few days. At Steve Taylor & Partners we talk with clients about “real Superannuation” as in real bricks and mortar that you can see, touch and feel. Houses are real and they do not disappear with the click of a computer mouse.

A brief overview

Most people are now aware that in future years they are unlikely to get their Super in a lump sum on retirement, but as a form or pension so what can they do about it?

If you have a minimum of $200,000 in yours or combined Super with your partner, you can pull it out now and set up a Self Managed Superfund, buy a $500,000 investment home and contribute nothing to pay it off as your employer Super contribution of 9.5% or more, it pays it off for you. I have one client working for a university whose employer contribution is 17%!

Can you sell it before retirement? Yes, you can but why would you? It is surprising the size of the property portfolio you can build up by buying and accumulating rather than buying and selling.

So, ask yourself, what would you prefer something tangible and solid or something that can disappear with the click of a mouse? I know what I would prefer.

If you are interested in enquiring about buying property to start your Residential Property Portfolio, please contact our office to schedule a free, no-obligation consultation.

Steve Taylor

If you prefer to listen here is my radio interview on Emerald 4HI:

At the helm of Steve Taylor & Partners, Steve Taylor has been delivering expert advice and product knowledge to clients for over 30 years. Steve Taylor & Partners provide individuals, couples and families with the right strategies to create wealth and change their lives with solid bricks and mortar.