What are some of the pros and cons of actually owning Bitcoin or other cryptocurrencies within a self-managed super fund? Hi, I'm Mike white the CEO of New Brighton capital and what we do is help Australian cryptocurrency enthusiasts get exposure to cryptocurrencies within their superannuation. Quick disclaimer we are not financial advisors we do not offer financial advice.
We'll start with some of the pros and we'll give three.
1. Pro - Exposure
For those who are interested in cryptocurrencies kind of understand the fact that there's a chance that this technology is going to fundamentally underpin how the entire world stores and transfers value. So it's going to be the value layer of the Internet, so it's kind of a big deal. Having the ability to just have a portion of your super exposed to something like that might not be a bad idea.
2. Pro - Diversification
So with your normal retail super fund they can only actually buy stocks they can't short they can't own other assets so when the market go is going up you're going to make money when markets going down you're going to lose money having the ability to own another form of asset like cryptocurrency really does allow you to diversify your assets. Because cryptocurrencies really do not actually track the way the normal market moves, so that gives really smoothes out the results of your of your super fund performance and that is generally a really good idea.
3. Pro - Control
When you own assets within an SMSF you control the asset if it's something like a share obviously that's kept on the exchange but if it's something like property or gold or crypto you actually physically hold or control those keys.
1. Con - Risk
Cons in involved in running a self-managed super fund and that is the risk. Obviously if you are running a self-managed super fund you in effect become two people. You become the fund manager of your super fund you've got the super fund in the middle and you're also the member of that fund. The risk comes in the fact that you you at the top and now responsible for your superannuation, so you shouldn't take it lightly.
2. Con - Cost
There are costs in actually setting up and running a self-managed super fund. Those costs involved around abouts $1,000 to $1,500 of setup costs. Plus around abouts $1,200 to $1,500 a year actually running the fund. The beauty about those costs though is that they stay the same regardless of how much money you have in your super. Whereas if your money is in a retail super fund you actually pay fees around one to two percent of what's in your super, so the more money you have the more fees that you actually pay. And one other thing on the costs is you can actually have up to four people in the super fund next year that like you'd be six people and the cost to run it are the same so there is a crossover point. Understanding about the cost of how that affects you but you just need to be aware about that.
3. Con - Compliance
When you do run a self-managed super fund there is there are a lot of kind of rules and regulations that you need to adhere to. Every year you need to do a tax return you need to do an audit you need to make sure everything you're doing is compliant. What we do at new bright and capital is look after all of that for you, so you can focus on building your portfolio. In regards to risk obviously this is an area that could perform fantastically and there definite profits to be made. The reality is there are going to be many of these projects which end up being nothing, just like during the dot-com boom and bust so you do need to be very have a very clear understanding of the fact that a lot of these things can go to zero. The responsibility is obviously up to you.
If you would like more information on finding out exactly how an SMSF could apply to you head over to New Brighton capital com we've got plenty of information discussing all the ins and outs and if you'd like to have a chat to anyone you can give us a call or you can also book in a time from the website for a twenty minute consultation with either myself or one of the other guys were very well-versed in all areas of SMSF - to find out exactly how it can help you get exposure to crypto within your own superannuation.