Let’s talk self-managed super funds with Sigo Siriphokha transcript

by 26 Oct 2023Podcast

Kylie – Host (00:06):

Hi, wealthers. Welcome back to another episode of The Money Brew, my podcast. I’m the host, Kylie Sultana and today, I have a special guest, Sigo Siriphokha.

Sigo – guest (00:23):

That’s right.

Kylie – Host (00:24):

I pronounced it correctly.

Sigo – guest (00:25):

That’s right.

Kylie – Host (00:27):

Perfect. Sigo is an advisor and he works for us at Creo Wealth. [00:00:30] You’ve been with us since the beginning of this year. So 2023, we’re in right now. And you have just become a Self-Managed Super Fund specialist.

Sigo – guest (00:43):

That’s correct, yes.

Kylie – Host (00:44):

So what does that mean, Sigo.

Sigo – guest (00:47):

So what it means is that, it’s a qualification that you do through the Self-Managed Super Fund Association, essentially.

Kylie – Host (00:53):


Sigo – guest (00:55):

It just gives you an extra credit or qualification in terms of Self-Managed Super Fund specialty. So it’s just a point of difference that I want it to be an [inaudible 00:01:06].

Kylie – Host (01:06):


Sigo – guest (01:07):

Concentrate on, yeah.

Kylie – Host (01:08):

Yeah. So you want to concentrate on Self-Managed Super Funds, but what else? So what other sort of advice do you do? What’s your passion? What sort of clients do you like to help?

Sigo – guest (01:18):

So with advice, I generally provide, you could say, super, insurance, investment, debt management, cashflow advice. Self-Managed Super Funds is a bit more niche with things, but I enjoy helping out clients, looking at their holistic, you could say, holistic approach with things. So what I mean by that is, when you look at, you could say, the foundation of anything, it’s the budget. Once you know what the budget is, that’s when you can allocate funds into savings, investing, and all those things. So predominantly as an advisor, that’s what we’re kind of looking at in terms of how are you able to build wealth, how are you able to accumulate, how are you able to build up your, you could say, investment portfolio over time.

Kylie – Host (01:59):

Yep. [00:02:00] So when somebody first contacts you, somebody calls and says, “I need help. I want to build wealth. I want to retire early,” or whatever their goals are. What’s one of the first things that you would look at?

Sigo – guest (02:13):

First things? Well, the first things is trying to find out if they have an idea of what their budget is and what their expenses are.

Kylie – Host (02:21):


Sigo – guest (02:22):

Because 99 out of a 100 clients call up and they don’t know what that is. And it’s always-

Kylie – Host (02:30):

[00:02:30] Or goals. A lot of them don’t know what they want, even-

Sigo – guest (02:32):

Yeah, that’s the second part.

Kylie – Host (02:32):

They just know they want to do something. They’re not quite sure what it is.

Sigo – guest (02:32):

Yeah. The second part is the goals because clients call up and they don’t have any goals in mind. They don’t know when they want to retire. They don’t know how much they need for retirement. They don’t know how to use the assets they’ve got to build and generate wealth. So it’s kind of finding out what their budget is, but also what their goals are in terms of things.

Kylie – Host (02:48):

And I think it’s a common myth too, that people think you need to be earning a lot of money to start investing or saving. It’s not necessarily the case, is it?

Sigo – guest (02:55):

No, it’s just being consistent over time. It’s like going to the gym. You just got to show up every day, [00:03:00] just like investing. You’ve just got to invest over a long period of time, essentially.

Kylie – Host (03:04):

So small little things along the way, add up to one big thing.

Sigo – guest (03:08):

That’s right.

Kylie – Host (03:08):

So compound interest, right? Our best friend.

Sigo – guest (03:10):

That’s right.

Kylie – Host (03:12):

So going back to the SMSF, so Self-Managed Super Fund. So we don’t want to use too much jargon here. If you do do that, I will put you up, but I did forget to say that anything we talk about here, is general only. So this is not personal advice, it’s not intended to be personal advice or investment advice. So seek professional help before you do anything. Yes?

Sigo – guest (03:33):


Kylie – Host (03:34):

And we can give you Sigo’s number if you need. So Self-Managed Super Funds. So this is actually a special interest that you have. Why do you have a special interest in Self-Managed Super Funds? What’s the attraction?

Sigo – guest (03:45):

Well, the attraction for me is, the differences between that and a normal, you could say, super fund account. With a Self-Managed Super Fund, you’re given, you could say, accessibility to different investment options. You’ve got more control. It can be including up to six other trustees or directors. So you can have your family involved in the whole process, pulling your assets together with things. So it’s much more interesting as compared to a normal, you could say, super fund where, for instance, you’re just investing by yourself essentially.

Kylie – Host (04:17):


Sigo – guest (04:18):

With a Self-Managed Super Fund, you can look at intergenerational wealth, looking at building up your assets along with your family or other, you could say, trustees or directors, but you kind of have more control in the whole process with things because you kind of direct and you could say, advocate what needs to happen with it.

Kylie – Host (04:37):

Okay. So what are the key… Would you say they’re some of the key advantages of having a Self-Managed Super [inaudible 00:04:43]… An SMSF?

Sigo – guest (04:45):


Kylie – Host (04:45):


Sigo – guest (04:45):

Yeah. Well, you’re looking at, you could say, accessibility to different investment options, different diversification in terms of assets because you can invest in, you could say, commercial assets and residential or investment assets with things.

Kylie – Host (04:58):

Now there’s other assets that you can invest in as well. Isn’t there?

Sigo – guest (05:01):

Yes, there is.

Kylie – Host (05:01):

Some people, is it like art and-

Sigo – guest (05:03):

Yes, artworks, like you’ve got behind you. There’s collectibles that you can’t really use for personal use. You can have, within a Self-Managed Super Fund. Other things like gold bars, other collectibles such as motor vehicles, crypto. That’s something that’s not common, but there is, you could say, some clients kind of looking into that space. But more or less, it gives you options to a diverse range of investments.

Kylie – Host (05:28):


Sigo – guest (05:28):


Kylie – Host (05:29):

So coming [00:05:30] with all of that, if you don’t have any knowledge in any of those investment vehicles, it would be important to seek professional advice [inaudible 00:05:38]?

Sigo – guest (05:38):

That’s right, yes.

Kylie – Host (05:39):

Yep. So somebody comes to you and says, I want to buy some gold bars. What’s the first thing you could think of? What’s the first questions you’d be asking them?

Sigo – guest (05:47):

Well, why do you want to buy gold bars? That’s probably the first question because gold bars aren’t, you could say, you can’t move around gold bars that easily, can you?

Kylie – Host (05:55):

No, you can’t.

Sigo – guest (05:55):

It’s quite heavy. Where are you going to store it? That’s the second part because for SMSF or Self-Managed Super Fund Assets, you can’t really have it for personal use or you could say, it can’t be used for the members either. So what I mean by that is that you’ve got to have a storage facility to house the artworks and the gold and the collectibles, essentially.

Kylie – Host (06:13):

Right. So you can’t keep it on your wall in your home.

Sigo – guest (06:14):


Kylie – Host (06:16):

You can’t have your gold bar under your pillow or anything.

Sigo – guest (06:17):

Unfortunately, it’s not for personal gratification.

Kylie – Host (06:19):


Sigo – guest (06:20):

It has to be stored somewhere. And that has to be, you could say, put in… You could say, the Self-Managed Super Fund trust, deed, and…

Kylie – Host (06:26):


Sigo – guest (06:27):

It has to be kind of all compliant from that perspective [00:06:30] as well.

Kylie – Host (06:30):

That’s interesting. And how often is the fund meant to be audited?

Sigo – guest (06:35):

So audits happen every year. Financial statements also have to happen every year. So an accountant would organize the financial statements for the fund. They would also organize the auditing of the fund as well, to make sure we don’t have an issue like Melissa Caddick.

Kylie – Host (06:49):

Oh, gosh, yes.

Sigo – guest (06:50):

But to ensure that you could say the funding’s operating correctly, but more or less, adhering to the guidelines and the rules of the Australian Tax Office or ATO.

Kylie – Host (06:59):


Sigo – guest (07:00):

[00:07:00] Yeah.

Kylie – Host (07:00):

So you were talking before about trustees of the fund?

Sigo – guest (07:03):


Kylie – Host (07:04):

Can you explain that to me?

Sigo – guest (07:05):

Yep. So there’s two different, you could say, structures that a Self-Managed Super Fund can be set up as, there’s something called individual trustees and there’s something called directors, essentially. So individual trustees, there needs to be a minimum of two individual trustees, which means that there’d be two people part of the fund essentially. The issue with that is unfortunately, people have a habit of dying. So if someone passes away, what needs to happen is that that fund needs to be wound up essentially.

Kylie – Host (07:35):

Oh, really?

Sigo – guest (07:35):


Kylie – Host (07:35):


Sigo – guest (07:36):

And the fund’s got six months to do so.

Kylie – Host (07:37):


Sigo – guest (07:39):

The difference between that and you could say, a corporate trustee or a company, is that a company, or you could say corporate trustee, they can be, you could say, one director.

Kylie – Host (07:51):


Sigo – guest (07:53):

It doesn’t need to be anybody else. So that’s pretty much the differences between the structures. With individual trustees, it’s more cheaper to set up, but it becomes more difficult when somebody passes away or becomes deceased. With a corporate trustee, it’s irrespective. They can just be one person directing the activities.

Kylie – Host (08:11):


Sigo – guest (08:11):


Kylie – Host (8:13):

So we were talking about… Oh, actually, let’s just stay there for a minute. What are the responsibilities and obligations that they have?

Sigo – guest (08:22):

Responsibilities and obligations. So there’s obligations that the fund be invested for sole purpose. And what that means is that for the members, it has to be invested as per, you could say, for the benefits of the members’ retirement or the directors’ retirement benefits, essentially. The other, you could say, compliance parts is ensuring that the fund is compliant, which adheres to, you could say, the tax concessions by the Australian Tax Office.

If a fund becomes non-compliant or you could say, not complying with the standards, there’s different tax rules that apply. So with the tax concessions, the ATO provides 15% and that’s with the Self-Managed Super Fund assets. If you don’t adhere to that and the fund becomes non-compliant, it can be as high as 45 up to 50%.

More or less, the other rules is pretty much around residency. So ideally, you want to be living in Australia. If you’re living overseas, there’s certain rules that are kind of applied to living overseas. You’ve got to have someone still Australian-based for that, essentially, just to put it in without too much jargon and without too much, you could say… Without too much jargon and without too much complexity. It’s probably the easiest way to put it.

Kylie – Host (09:41):

Yep. So for a Self-Managed Super Fund, there’s a certain amount that you would need to start the fund. So what is the ideal, or what does ASIC, which is the Australian Securities Investment Commission, what do they say is the ideal?

Sigo – guest (09:56):

So ASIC kind of implies that you need about 200, $250,000 to start up a Self-Managed Super Fund. It’s different to our guidelines. Part of the licensee, which it’s about $500,000 to start up a Self-Managed Super Fund. Me personally, ideally, you’d have to have about $350,000 to about $400,000 to start up a Self-Managed Super Fund.

The reason for that is that’s kind of a price point where you’d be able to make it cost-effective for the trustees involved because you’ve got to have an advisor to direct the investment options. You’ve got to have an accountant in the process as well, doing the financial statements, order reports, and overall administration of the fund. So that’s what I give as a guideline, but more or less, around that mark to have appropriate diversification.

Kylie – Host (10:46):

Yep. So going back to the investment choices. Are there any traditional super funds or are there any other way you can structure your super without starting a Self-Managed Super Fund, if you don’t want the complexity of that?

Sigo – guest (11:02):

More or less, there’s industry super funds or retail super funds that provide similar options in terms of what’s available in the Self-Managed Super Fund. So you’ve got the likes of Australian Super, Australian Retirement Trust, there’s other, you could say, industry super funds as well. And then you’ve got retail funds such as AMP, Macquarie, you’ve got BT or Mercer. You’ve also got Colonial.

With those, you could say, platforms or fund managers essentially, they’ve got the diversification that’s similar to a Self-Managed Super Fund, but more or less, they’ve got… Each provider that I’ve listed kind of have different… A different number of investment options available. That’s very similar, but there are some differences in terms of the other investments that you can have in a Self-Managed Super Fund.

Kylie – Host (11:51):

Yeah. So I guess that would be something you would assess. If somebody comes in and they think that they want a Self-Managed Super Fund because they want a little bit more control over their money. They’re showing an interest and they want to kind of make some of their own choices.

Sigo – guest (12:04):

That’s right.

Kylie – Host (12:05):

So that’s when you would look at their situation. So if they didn’t have quite enough money or if it wasn’t going to be viable for them to start a Self-Managed Super Fund, so that’s when you would look at the other options and then they could potentially… Because I think you can buy and sell shares, there’s different things you can do.

Sigo – guest (12:18):

That’s right.

Kylie – Host (12:19):

You can choose your investments and how it’s spread.

Sigo – guest (12:21):

Yeah, that’s right. So if the clients aren’t appropriate for a Self-Managed Super Fund at this stage, it doesn’t discount them from being appropriate [00:12:30] for them at a later stage.

Kylie – Host (12:30):

Of course.

Sigo – guest (12:31):

So what our main priority would be, it would be wealth creation. So ensuring that they’re contributing into super, they’re investing it correctly to be able to reach that balance. After we kind of reach that balance, that’s when we kind of have a discussion, whether or not it would be an appropriate structure for them. If not, that’s fine. We can keep going the way that we’re going and building up and accumulating wealth. But if it’s an appropriate structure, that’s when we’ll have further discussions and we’ll let the client know what needs to be involved in the whole process with things.

Kylie – Host (13:01):


Sigo – guest (<13:01):


Kylie – Host (13:02):

So I just want to talk about superannuation for a moment. It’s a real misconception. At the moment, people just forget about it, they just kind of leave it. What would you say to somebody who just gets their super statement and just kind of files it away and doesn’t even consider… Their employer puts the money in and that’s enough. What would you say to them?

Sigo – guest (13:29):

I think being more hands-on would benefit you over the long run. That’s what I think, because those statements, if you’re not paying attention to them, you don’t really know how your super balance is actually going, whether or not that’s, you could say, increasing or decreasing forwards or backwards.

So what clients or people need to understand is that, that super balance kind of shows you what investments that you’ve got in super, whether or not you’ve got insurance within the fund. I remember I had a client that was relatively young and he was invested in cash for five years for some reason.

If you’re not paying attention to the funds or the super statements, you’re not really knowing where you’re going. And the sooner you kind of take on a more hands-on approach with looking at those statements, I think the more engaged that you would be with super moving forward. Because I know for some people, it’s a 30, 20, 10-year plan.

Kylie – Host (14:21):


Sigo – guest (14:22):

But more or less, the earlier that you pick it up and kind of look at things, that’s when you become more engaged and want to find out more about, for instance, investing, managed funds, ETFs, and shares.

Kylie – Host (14:32):

And where your funds are invested, right?

Sigo – guest (14:34):

That’s right.

Kylie – Host (14:34):

Because there’s a lot of social issues and everything now. So if you don’t want to be invested in say, coal or things like that, so it pays to have a look at those sort of things.

Sigo – guest (14:46):

Definitely. Yeah, there’s a lot of ethical investing going on at the moment around the world. I think that’s kind of a bigger part of the investing for younger and older people moving forward.

Kylie – Host (14:59):


Sigo – guest (15:00):

But it’s definitely something that’s only been introduced in the last three years.

Kylie – Host (15:04):

Yeah. I know we had a client years ago, I think they had family members that died from lung cancer, so they were very adamant that they didn’t want anything that was invested in tobacco. So I think Anthony had to find some investments where there was no tobacco or no related companies to tobacco companies. And I fully understand and support that, which is fantastic. Okay. Sigo.

Sigo – guest (15:30):


Kylie – Host (15:31):

I’ve heard Sole Purpose Test thrown about with Self-Managed Super Funds. Can you explain that to me a little bit more?

Sigo – guest (15:38):

So more or less, the Sole Purpose Test is ensuring that the funds or the Self-Managed Super Fund is invested for the benefits of the trustees or the, you could say, corporate trustees or directors’ benefits for retirement. So what that means is, essentially, you want to be accumulating and building up wealth for that purpose. It shouldn’t be used, you could say, as a ATM or you could say, taking funds out of that environment, essentially.

Kylie – Host (16:04):

Yep. Have you seen that happen while you’ve been advising? Have you seen that happen and the consequences of that?

Sigo – guest (16:10):

I personally haven’t seen misconduct like that, but it’s definitely in the news articles and you hear about the articles about, for instance, an advisor that’s taken out from the client’s Self-Managed Super Fund cash account using their funds for personal benefit, things like that.

Kylie – Host (16:27):

Oh, lovely.

Sigo – guest (16:27):

So it’s not a good outcome because what you should be doing as an advisor is to kind of build up these clients to build up their wealth, to be able to meet their goals, and essentially, enjoy retirement when that time comes.

Kylie – Host (16:40):

Exactly, exactly. And that’s where the whole Royal Commission came about, wasn’t it?

Sigo – guest (16:42):

Yes. A lot of people-

Kylie – Host (16:43):

[inaudible 00:16:44].

Sigo – guest (16:43):

Yeah, some people doing the wrong thing makes, unfortunately, all of us look bad.

Kylie – Host (16:48):

It does. Yeah. Unfortunately. And the whole Melissa Caddick thing did not help, did it?

Sigo – guest (16:51):


Kylie – Host (16:53):

No. But that’s a whole other issue. Let’s just not even touch on that.

Sigo – guest (16:55):


Kylie – Host (16:56):

Yes. Let’s not get too political. So talk to me about estate planning for a Self-Managed Super Fund. What are some things that people need to do?

Sigo – guest (17:03):

So for estate planning, one consideration actually is, even though if a client has a will, their Self-Managed Super Fund is still bound by the superannuation, you could say, beneficiary nominations. So this is one thing that’s, people that have a Self-Managed Super Fund may be confused because they may think that the funds would be allocated to the will and the executor of the will kind of, you could say, execute the assets and liabilities, and kind of have a look at what assets are left over.

Kylie – Host (17:32):


Sigo – guest (17:32):

And distribute accordingly to the beneficiaries, nominee.

Kylie – Host (17:35):


Sigo – guest (17:36):

But in actual fact that with a Self-Managed Super Fund, you’ve actually got a beneficiary. And what that means is that with your normal super account, you’ve actually got beneficiary nominations that you can make, right?

Kylie – Host (17:47):


Sigo – guest (17:48):

With a Self-Managed Super Fund, it’s essentially the same thing.

Kylie – Host (17:51):


Sigo – guest (17:51):

So it’s good to have a beneficiary nominated in the event that something happens to the member, but essentially, what would happen is that the funds would be distributed to, for instance, based on the beneficiary nomination. And thereafter what happens is that after that, it’s kind of up to them to spend, you could say, the proceeds accordingly.

Kylie – Host (18:15):


Sigo – guest (18:16):

There’s a misconception that the Self-Managed Super Fund would go straight to the will, but the first point would be the actual superannuation beneficiary nomination.

Kylie – Host (18:24):

Of course, because it comes under the same rules as the retail funds.

Sigo – guest (18:26):

That’s right.

Kylie – Host (18:26):

Yeah, of course, of course. So Sigo, insurance within super. When you start a Self-Managed Super Fund, is it… You need to have some sort of risk insurance with that or…?

Sigo – guest (18:39):

Definitely. When you’re looking at a Self-Managed Super Fund, or you could say, insurance, what you want to be covered for is essentially, your liabilities.

Kylie – Host (18:49):


Sigo – guest (18:49):

So having your, for instance, principal residence, the liabilities against that, investment properties, any other, you could say, medical expenses, any, you could say, schooling fees, any other costs in relation to the funeral.

Kylie – Host (19:04):


Sigo – guest (19:05):

Essentially, you want to have those insurances covered in the event that something happens to you, right? So there’s different insurance types. There’s life insurance, there’s total and permanent disablement insurance, which is TPD insurance, and you’ve got income protection insurance. Basically, they can be all held within the Self-Managed Super Fund,

Essentially. So what I mean by that is that the premiums would be funded from the Self-Managed Super Fund balance. There’s also trauma insurance cover and that’s held outside super. And that’s pretty much covered by the member essentially outside super.

With the three covers that I mentioned inside super, such as the life, total and permanent disablement cover, and income protection, that can also be held outside super as well. And looking at the tax advantages, it may be worthwhile speaking to an accountant or an advisor in terms of how you structure it, but predominantly, it would be based on your cashflow and whether or not you can afford to structure it [inaudible 00:20:00].

Kylie – Host (20:00):

Yeah. And I mean, that’s just another benefit of coming to see an advisor because you can work out those strategies for them, the best way to do that.

Sigo – guest (20:06):

That’s right.

Kylie – Host (20:08):

So with the super, so let’s talk about the contributions that we can make just so the listeners know what kind of contributions can go into. So it’s mandatory that your employer pays at this date in 2023? It’s-

Sigo – guest (20:24):


Kylie – Host (20:24):

It’s at 11%.

Sigo – guest (20:25):

Yes, that’s right.

Kylie – Host (20:26):


Sigo – guest (20:26):

It’s 11%. So it’s going to go up to 12%, you could say, by the financial year 2025.

Kylie – Host (20:32):


Sigo – guest (20:33):

So we’re currently in the 23/24 financial year, which is 11%. Next financial year will be 11.5% and the year following would be 12% [inaudible 00:20:43]. So those contributions are added to the concessional cap, which is for anybody, it’s $27,500. And essentially, that cap is essentially, just to ensure that people don’t go over that cap.

Kylie – Host (20:59):


Sigo – guest (20:59):


Kylie – Host (20:59):

And when you say concessional-

Sigo – guest (20:59):


Kylie – Host (21:00):

What does concessional mean?

Sigo – guest (21:02):

So concessional means that it’s part of the employer benefits or you could say, the SG contributions that the employer makes to a person or employee. And that’s the maximum that someone can be able to contribute to that.

Kylie – Host (21:15):

Yep. And there’s a special tax rate that’s applied to that, isn’t it?

Sigo – guest (21:17):

That’s right. Yep. And that’s 15%. If anybody that earns above the $200,000 mark, they’d be paying a different tax, which is called a Division 297 tax. And that’s based on, you could say, your income and the super contributions that would be made. Yes.

Kylie – Host (21:35):

So apart from those contributions, you can also contribute your own money that you’ve already paid tax on.

Sigo – guest (21:42):

Yes. And that’s called after-tax, you could say, contributions or non-concessional contributions.

Kylie – Host (21:47):

And so why would someone want to do that? Why would you want to just throw some money into super?

Sigo – guest (21:51):

So the reason why you may decide to do a non-concessional contribution or after-tax contribution is, for instance, if you’ve sold your home, you’ve received an inheritance, you want that money to go into super to compound and build up your wealth. Those are considerations that most clients would have contributing after tax money. But more or less, some clients for instance, don’t know what to do with it. They don’t want it to be sitting in a cash account, cash at bank or under the mattress, essentially. So what they do is, if they’re approaching retirement, it may be a suitable strategy to be actually putting that money into super to be able to compound and grow over time.

Kylie – Host (22:29):

Yeah, exactly, exactly. And I mean, I think too, a lot of the younger generation kind of don’t think that super’s viable for them because they’re so young. And I mean, they do have a long time before they can access that money, but I personally see it as a way to put that money away and you can’t actually touch it. And then therefore, it’s kind of like in a tax haven, I guess you say, because that can turn into a tax-free income once it gets there. So at what age does that turn into a tax-free income?

Sigo – guest (22:58):

So the earliest that [00:23:00] someone can be able to access the money is 60, and that’s dependent on, you could say, the preservation age. It really depends on what year you’re born, essentially.

Kylie – Host (23:08):


Sigo – guest (23:08):

But rule of thumb, in most general cases, it’s age 60. So if you’re retired by age 60 and you meet the conditions of the release, that’s when you can start accessing your super or retirement benefits. But yeah, at 60 would be the earliest age. And it really depends on you meeting the conditions of release. So conditions of release is retirement. There may be other reasons such as financial…

Kylie – Host (23:34):


Sigo – guest (23:36):

Hardship, yeah, that’s it. Yeah, financial hardship.

Kylie – Host (23:39):

Yeah, there’s a whole process [inaudible 00:23:41] for that. Yeah.

Sigo – guest (23:40):

Yeah, that’s right. But there’s also other reasons, but yeah, the earliest would be age 60.

Kylie – Host (23:44):

Yeah. Don’t tell Anthony, I’m quizzing you on this. I’ve got eight years to go. That’s our secret, Sigo.

Sigo – guest (23:46):


Kylie – Host (23:53):

So thank you for sharing those insights. So I’m going to ask you a couple of top three tips. So top three tips for say, somebody that’s earning say, $80,000 upwards. They’ve got a bit of spare money after their expenses and they’re kind of thinking about investing, they’re kind of looking at their super, they’re not quite sure. What’s your top three tips for them? What should they do first?

Sigo – guest (24:24):

Top three tips is basically, depending on how much you are earning, save more than you’re spending. That’s probably the first tip because a lot of young people kind of just go all out.

Kylie – Host (24:36):

Live for the here and now, right?

Sigo – guest (24:37):

Yeah. YOLO, right?

Kylie – Host (24:38):

Live for the Gram.

Sigo – guest (24:38):

That’s it.

Kylie – Host (24:38):

Yeah, yeah.

Sigo – guest (24:39):

You only live once, right?

Kylie – Host (24:40):


Sigo – guest (24:40):

That’s probably my first tip. The second tip is to be more attentive to your finances. So not just the budgeting, but kind of looking at your overall situation. You’re not really going to be generating too much from cash at bank over time, but look at the different investment option vehicles and take a keen interest in investing. The third one is, look at the power of compounding.

Kylie – Host (25:08):

The eighth wonder of the world.

Sigo – guest (25:09):

That’s right. So there was this book I was reading, I can’t remember the book, but it was about what outcome is better or what outcome would you take? Would you rather take a penny that doubles every day for 31 days or would you rather take the $3 million cash? The power of compounding is that the penny that doubles or compounds within that 31 days, actually provides a larger, you could say, outcome. It’s about $5 million at the end of the 30 days.

Kylie – Host (25:41):

Wow. Okay.

Sigo – guest (25:43):

So just have a look at the power of compounding because the earlier that you do start, the more that you’re going to have at the end of the…

Kylie – Host (25:50):


Sigo – guest (25:50):


Kylie – Host (25:50):

And I think too, the earlier you get into investing, and I think people worry about market corrections and share prices going down, housing prices, but if you start younger, you’ve got more time to recover from those corrections. Is that right?

Sigo – guest (26:06):

Yeah, that’s correct. So as someone has a long investment timeframe, they’ve got time to go through the market up cycles and down cycles. So essentially, what you can do is generally, you can take a bit of risk with things because if you’ve got 30 years, that’s 30 years for you to go through the ups and downs. However, once you get or approach retirement such as, if you’ve got five years left, there’s something called sequencing risk that is, you could say, an issue. Because essentially, that’s when your retirement savings or super is at its most high.

And if there’s a market correction at that point, what it means is that, markets can fall down in the, you could say, in the six-month period, but it can take five to eight years to recover to that amount pre, you could say, recession or pre-market downturn. So that’s something that we would look at in terms of the client’s situation, whether or not they want to retire in the next five years because ideally, you want to prevent someone losing money just before they’re about to retire, essentially.

Kylie – Host (27:09):

Yeah, of course, because they’ve worked hard all their lives for that money, right? The last thing you want to see is it going down before you’re about to retire and access it.

Sigo – guest (27:16):

That’s right. Yes.

Kylie – Host (27:16):

Yeah, definitely. Thank you for that. So my next top three is, if someone is considering a Self-Managed Super Fund. I didn’t twist my words on that one, an SMSF. If they’re considering an SMSF, what are your top three tips for them?

Sigo – guest (27:30):

Top three tips is, have a sizable balance. So what I mean by sizable balance is something within the vicinity of $300,000 to start with, up until a million dollars plus. So that’s kind of the range that you want to be ideally looking at a Self-Managed Super Fund. The second one is basically, know that there’s duties, obligations, and responsibilities as trustees. So you can’t be sitting around doing nothing. There’s things and paperwork that you’ve actually got to sign as part of it.

So that’s something that’s the advisor or the accountant would organize with the client. But there’s a more hands-on approach with things. And what I mean by that is there’s meeting minutes, there’s paperwork that needs to be signed, there’s financial statements that needs to be looked at. There’s the order report that needs to be done. So it’s a much more engaging process as opposed to a normal retail fund or industry super fund.

Kylie – Host (28:24):

Yeah, because I mean, there can be quite high fees involved in a Self-Managed Super Fund.

Sigo – guest (28:28):

That’s right.

Kylie – Host (28:29):

So you want to make sure you’re getting the most out of it.

Sigo – guest (28:31):


Kylie – Host (28:32):

Sorry, and what was your third tip?

Sigo – guest (28:33):

And the third tip was looking at the investment classes that you want to be invested in. I know that there’s a lot of people that want to be invested in so-called property, but one of the questions that I need to ask clients is, have you looked at the price range that you want to be investing… The price of the property that you want to be investing in? Have you looked at the area geographically, whether or not the rental income is going to be suffice to pay off the mortgage?

But more or less, it’s just understanding what your goals are because the property would only be a part of the asset classes invested within a Self-Managed Super Fund. So what I ask clients is pretty much what your goals are, how are we going to achieve that, and what strategies we can implement to be able to achieve those goals.

Kylie – Host (29:17):

And I love that. Everything’s driven around the client goals. It’s obviously, because we’re working hard for them so that they get the retirement of their dreams, essentially.

Sigo – guest (29:25):

Pretty much. And if the client can’t tell me what their goals are, there’s no, you could say, benchmarking or direction with things. So it’s pivotal that clients know what they want because if you don’t know what you want, I can’t help you, unfortunately.

Kylie – Host (29:39):

Unfortunately. And that’s fair. I mean, for anyone we see, if you don’t really know what you want… It’s actually interesting. Sorry, I’m digressing a little bit. And I know Anthony’s often seen couples that just are not on the same page when it comes to their goals. Have you ever had anything like that? A couple that are-

Sigo – guest (30:00):


Kylie – Host (30:00):

Completely on different pages.

Sigo – guest (30:02):

Clients can be, you could say, in two frames of mind. So it could be a husband and wife, for instance, or two partners, and they see life in two different perspectives. So one wants to be a spender, a big spender, no pretender. So he wants to go overseas, wants to travel around the world, and have fun. Right?

Kylie – Host (30:23):


Sigo – guest (30:24):

And then you’ve got, you could say, the saver, which is a person that just wants to stay at home and really do nothing, just wants to enjoy their lives because they’re more… Probably introverted.

Kylie – Host (30:33):

They’re tight-arse.

Sigo – guest (30:35):

Yeah, tight-arse. But more or less, with that-

Kylie – Host (30:37):

I say that with so much respect. This goes back to Anthony.

Sigo – guest (30:39):

But with things, right? I think the best investment that someone can have is basically choosing the right financial partner or partner, financially. Because if you’re not on the same page or if you’re universes apart, it doesn’t really help to what your overall goals are. Because if you’re a unit or a couple, ideally, your vision or goals are aligned with things.

Kylie – Host (31:00):

They are.

Sigo – guest (31:01):

So it’s very difficult to speak to those clients because one will go that way, the other will go that way. So it’s something that coaching and kind of understanding what their goals are, and helping along them the process with things.

Kylie – Host (31:16):

Yeah. It’s interesting because I think you just explained Anthony and myself. I’m the spender no pretender and Anthony’s the tight-arse.

Sigo – guest (31:22):


Kylie – Host (31:24):

I’m going to get a shirt made with that. Anthony’s going to love it.

Sigo – guest (31:29):


Kylie – Host (31:29):

So Sigo, thank you so much for chatting with me today about just superannuation, but the Self-Managed Super Funds, because I know a lot of people think that it’s a glamorous thing, a Self-Managed Super Fund, and they can control their money and they think they can do this, that and the other. But there’s a very serious aspect to an SMSF and it can become costly, particularly if you don’t get the right advice.

Sigo – guest (31:50):

That’s correct.

Kylie – Host (31:51):

Before I go, have you seen what’s happened if somebody has not gotten the right advice or if they’ve not gotten advice at all, and just kind of set it up themselves?

Sigo – guest (32:03):

So in some instances where a person doesn’t want to pay for the advice or doesn’t want to pay for an advisor to have a look at things, I’ve seen Self-Managed Super Funds invested just in cash. You’ve got $250,000 in cash for instance or $300,000 in cash. Unfortunately, with the past 10 years, it’s been, you could say, more of a bull market. So what’s happened during a bull market is that with shares and investing, it’s gone upwards like that. With cash, unfortunately, interest rates being at all time lows, you’re not really going to be generating a great return from that, are you?

Kylie – Host (32:41):


Sigo – guest (32:41):

So that’s pretty much the worst, I’ve seen it with things because you need an advisor to develop an investment strategy that’s specific to your circumstances, right? And so the advisor would go through the different types of assets such as shares. You’ve got property which are growth assets, and then you’ve got defensive assets just like cash, term deposits, and bonds.

Kylie – Host (33:03):


Sigo – guest (33:05):

But more or less with the growth assets and defensive assets, you want to have a proportion that’s based on your risk tolerance with things. With that, if you’re invested in the wrong investment options, unfortunately, you’re not really making your money work hard for you.

Kylie – Host (33:22):

No, exactly.

Sigo – guest (33:23):

And that’s at a detriment to your sole purpose. It’s just-

Kylie – Host (33:26):

And it’s your money, right? You want to make it work hard.

Sigo – guest (33:28):

Yeah. And you want the money to be working hard to generate as much as possible prior to retirement, so you can live the life that you want to live in retirement.

Kylie – Host (33:35):

That’s it. Cocktails on the beach, that’s me.

Sigo – guest (33:37):

That’s right.

Kylie – Host (33:38):

Drinks with little umbrellas and [inaudible 00:33:40].

Sigo – guest (33:40):

That’s right. So if you’re not seeking advice, that’s something that you should have a look at because with things, you want to ensure that you’re making the most money from the money that you have.

Kylie – Host (33:51):

And I think it’s easy for us to say that because we see the value and we can see the difference that we make in clients’ lives, financial lives, and what it means to them. I mean, Anthony’s had clients for 20 odd years and we’ve just changed their lives with the advice that he’s gotten. And so, you’ll be doing the same thing, so…

Sigo – guest (34:09):

Well, like a-

Kylie – Host (34:10):

And you’re not quite at 20 something years yet. I mean…

Sigo – guest (34:13):

Well, I like to say that I’m a [inaudible 00:34:15] in the industry. So I’ve got a long investment timeframe or you could say, career timeframe. So what that means, is that as clients come on board my train or my journey, I’ll be taking them along with their kind of, you could say, life with things. And that’s always been the reason why I became an advisor, to help out others, just like for instance, my mom’s situation with things. For me, that’s why I got into advice to help others and assist them in the process and provide guidance.

Kylie – Host (34:44):

Yeah, because it’s interesting, because a lot of advisors left the industry after the Royal Commission. So having younger advisors, I won’t tell them how old you are. Having younger advisors coming through for us, it’s nice because there’s still interest in the industry and that people still want to become advisors and have a passion.

Sigo – guest (35:04):

It’s a good thing seeing younger or young advisors still coming into industry or seeing people study financial planning.

Kylie – Host (35:12):


Sigo – guest (35:12):

I think it’s definitely an industry that got really wound up during the Royal Commission with things, but as time goes on, it would be good to see more people enter in the industry because there is a big advice need at the moment, as you see-

Kylie – Host (35:26):

There is.

Sigo – guest (35:27):

The baby boomers kind of reach retirement and retire.

Kylie – Host (35:30):

There is, there is. And all that generational wealth as well, that’s going to be coming through.

Sigo – guest (35:33):

That’s right.

Kylie – Host (35:35):

And is it the sandwich generation that they talk about? So that can be another podcast. So again, thank you Sigo for coming in and chatting to me and…

Sigo – guest (35:45):

Thanks for having me.

Kylie – Host (35:45):

We will definitely get you in and talk to you about [inaudible 00:35:50].


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Kylie is the Yin to Anthony’s Yang.

With a Diploma in Financial Planning, she’s spent over 25 years in the financial services industry, using her knowledge and skills to successfully weave an adoration of style and travel, alongside business, into her life.

While Kylie brings experience and knowledge from brands like ANZ, HSBC, Deutsche Bank and Merrill Lynch, she also brings heart and inspiration to Creo Wealth. This shows in how she manages the Creo Wealth team who feel appreciated by Kylie (oh, and Anthony too!)

But Kylie’s heart and inspiration doesn’t stop there. She’s a huge spender and certifiable shoe addict. This, along with her upbringing, means Kylie truly understands how hard it is to get in touch with your money story.

She’s on a mission to educate people to help them understand their money story. And then give them the tools to begin rewriting it. Kylie loves to use her stylish shoes to kick-start people’s confidence to set and reach their financial goals.

And the fun part for Kylie?

She always looks classy when she challenges Anthony for that last M&M.