March 25th, 2009 by Damian Papworth

The retirement industry in Australia is second to none in the world. It forces us to save money in a very comfortable way, a way that doesn’t impact our disposable income, so we all have a big pool of money to live off in retirement.

One of the things I always despise about our retirement industry though, is the way superannuation funds take control of the investment decisions away from me. It is my money, yet I cannot make any investment decisions. The situation has improved over the years, but it is still not good enough. For this reason I set up my own Self Managed Superannuation Fund (SMSF).

Without making this article too complex, all an SMSF is, is a structure which enables you to manage your own superannuation money. There are a number of responsibilities which come with running your own super fund, you can manage these yourself or outsource them as you see fit. Most of these responsibilities follow:

1. Your Trustee Responsibilities. Someone needs to legally own the assets of the fund. This is the trustee. The trustee is also responsible for the running of the fund, so if anything goes wrong, it is the trustee who is legally liable.

Secondly, there is the administration and accounting responsibilities. This is a time intensive role, keeping the books up to date and preparing the annual accounts, lodging tax returns and preparing reports for members.

c) Audit. Each year your superannuation fund should be audited to ensure it complies with the superannuation regulations. A successful audit will ensure you maintain your “complying” superannuation fund status and can continue to enjoy superannuation tax concessions.

4. Investments – The investment manager makes all the investment decisions, buying and selling investments to ensure the long term financial success of the fund, for the benefit of its beneficiaries. The investment manager must ensure that the investments made, comply with the superannuation laws, regulations and guidelines of the day. Failure to do so could result in a bad audit and the loss of taxation concessions.

In my situation, all I wanted was control over the investments. I wanted to manage where my money was invested and how much was invested. That way I always knew how much I had in my accounts (as opposed to waiting for the big surprise when my annual statement arrived) and I could feel comfortable knowing that my returns were well earned. They were my responsibility, so in the bad years when my investments fell, at least I wouldn’t get frustrated that I had no control. It also afforded me the luxury of managing my superannuation investment as part of my estate rather than as a separate entity. This meant my entire portfolio was significantly more balanced, which is crucial for long term financial success.

All other responsibilities I outsourced. To me, they were time consuming tasks which were better undertaken by experts in the relative fields. This left me with more time to research and make investment decisions.

Business, business;finance, family, Finance, investing, investment, Investments, mutual funds, pensions, personal finance, retirement, retirement savings, Savings, superannuation

March 5th, 2009 by Laura Macavoy

Companies, to raise capital, will sell small portions of their company to the public. These are called stocks. Someone who owns a stock is considered a shareholder. A shareholder has the right to voice his opinion about the companies management and share in the profits.

The reason a company sells stock is because they need. A company may want to purchase property, for example, selling stock will give them the capital to do this. The value at which the stock is sold depends on the growth and success of the company.

When a company is successful in the market, the stocks value will. The purchase of stock of a new company is a high risk because there is no assurance that new company will be successful. An investment in a well reputable company will have lower hazard, but great potential for a gain in value. As for example those who purchased the Reliance stock and held it in the beginning had a great return of their investment.

NASDAQ (the National Association of Securities Dealers Automated Quotation System) and NYSE (the New York Stock Exchange) are where companies sell their shares to the open market. You may buy stocks that are not listed through the exchange but this is a topic for another article.

Investors will have a stock broker that will make all the transactions for them. Brokers will be instructed by their clients to sell or buy stocks. Investors can instruct their brokers to buy or sell a stock when it reaches a determined value. The broker will then find a buyer or seller of the stock. A commission is granted to the broker for these services.

Business, economy, investing, Investments, investor, mutual funds, recession, Stock Exchange, stock market