Name: Tony Negline
Age: 48
Family (are they members of the SMSF?): Married 25 years with four children. Currently one child is a member of our SMSF. One other will join soon. Not sure what we’ll do when the others leave school.
How long have you had your SMSF?
Since 2004. I’ve always had a corporate trustee and we paid the ASIC fee 10 years in advance. It’s the only way to run your fund.
Why did you start it up?
It’s my speciality and I wanted to invest in ASX Listed Invested Companies (LICs) cheaply. With large super funds, you’re just a number.
How big is it?
About $240,000 based on my best guess.
Is it more or less difficult to manage than you thought it would be?
A piece of cake to administer and very easy to run to be honest.
Are you pleased with its performance?
We invest to earn income, which is then reinvested to earn more income. I have no idea of the return on capital, as I never look. I check the financial accounts for accuracy but never concentrate on the values. I’m just interested in low costs and increasing income. It’s the income we’ll ultimately live on when we retire. I don’t want to use the capital for income purposes. That’ll go to our children when we die (but don’t tell them that!). Yes, our income has been increasing faster than inflation.
What is your asset allocation?
Typically 5% in cash and 95% in ASX-listed equities. We own small holdings in ANZ and BHP. Most is in the major Listed Investment Companies (LICs) such as Australian Foundation Investment (AFI), Argo Investments (ARG), Milton Corporation (MLT), Washington H. Soul Pattinson (SOL) and the SPDR ASX/S&P 200 (STW). We never sell even when market goes ‘ugly’. Sometimes cash is a bit higher if we haven’t invested in our preferred stocks for a while.
What are your favourite investments/stocks and why?
Listed Investment Companies (as detailed above). Their purpose is the same as my purpose and their fees are very low. More to the point, they’ve being doing a great job for longer than I’ve been alive. The risk is they all become like most other fund managers and become speculators with my money. If this occurs, we’ll switch to indexed-linked ETFs, like STW.
Do you use an advisor or any kind of service provider?
Yes for some investments but I don’t need help there. My motto is KEEP IT SIMPLE, STUPID. Most people get complicated without knowing why or the additional costs they face as a result. Most people have no idea about currency risk and put money overseas. I want to avoid all that drama.
I currently have high death and disability insurance needs (house debt, school fees, future income needs or survivors etc.) so advisers for these insurances are essential. We use an accountant and his selected auditor to prepare accounts, audit and annual return.
What investments do you have outside of superannuation?
House, goods and chattels and a margin loan (positively geared and all in ASX-listed equities.)
Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regards to your circumstances.
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