The following case study relates to a real life example of how we helped
Kathryn and Martin achieve the following results in 5 years

$6,387+

In annual SMSF tax savings

296.16%

Increased SMSF investment portfolio value

$660,552

Increase in net super wealth

Whilst this is an actual example, all personal details have been changed, for confidentiality purposes.

Our client

Kathryn and Martin established a self-managed super fund back in 2010. They had $580,940 in their SMSF cash account and were receiving combined employer contributions of $37,000 per annum. Both in their forties, they were looking for a long term investment strategy to tax effectively grow their super, so they can have enough money to fund their lifestyle when they stop working.

The problems before we got involved

  • Kathryn and Martin were so busy juggling their work and life commitments, they had no time to effectively manage their super taxes, administration or investments
  • All their super money was held in a cash management account, providing their fund with taxable interest income and no capital growth
  • Super taxes and inflation were eroding the return on their cash investments
  • They required SMSF guidance and expertise to help them take the hassle out of their super admin and reporting, as well as develop, implement and manage their funds investment strategy

How Tax Effective helped Kathryn and Martin

  • We carried out a financial health diagnostic to gain a better understanding of their financial goals and objectives for the future and what they wanted their super to achieve for them
  • We ran multiple scenarios and super options, and customised a tax effective investment strategy for their SMSF
  • We established a limited recourse borrowing arrangement and invested $180,000 of their SMSF account into a portfolio of exchange traded funds (ETFs), and borrowed an additional $120,000, increasing their ETF portfolio to $300,000
  • We established an additional two limited recourse borrowing arrangements which enabled them to purchase two investment properties for $600,000 each
  • We took over the administration of the fund and compliance obligations and placed their fund on an online reporting platform which gives Kathryn and Martin 24/7 access to their fund information and investment reports via their computer or mobile phones

The result so far

Kathryn and Martin have achieved the following over 5 financial years

  • We successfully increased the investable value of their SMSF from $580,940 to $2,301,462, significantly increasing its growth potential over time
  • Our recommended SMSF investment strategy reduced Kathryn and Martin’s super contributions tax and investment income tax from 15% to 0%. This has provided additional cash flow and funds to fast-track their fund’s wealth accumulation.
  • We structured their SMSF investments to ensure that they are self-funding inside their SMSF and required no additional SMSF contributions outside of their compulsory employer super guarantee contributions
  • Kathryn and Martin’s SMSF investment strategy has achieved a net return of $660,522

Post becoming clients

We meet with Kathryn and Martin once a year to ensure their self-managed super fund remains on track to reaching their super goals. They enjoy access to their portfolio online 24/7 and receive various communications to keep them up to date with their fund’s performance.

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