Putting 100% of my self managed superfund in bitcoin

[leoleo]

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Hi all,

I am going to create a self managed superfund and put 100% of it in bitcoin. Since the purpose if retirement, it makes no sense to me to leave it in a deflationary fiat currency and I really believe bitcoin will turn out to be a very good investment in the long run.

Has anyone done something like this before?

I’ve gathered some resources:
https://www.ato.gov.au/Super/Self-managed-super-funds/Setting-up/
https://www.amp.com.au/personal/super-and-retirement/education/self-managed-super/setting-up-an-smsf
http://www.nab.com.au/personal/investments-super/smsf
http://www.superguide.com.au/boost-your-superannuation/super-beginners-qas
http://www.smsfadviseronline.com.au/columns/item/416-smsfs-audit-and-bitcoin
http://www.otiumgroup.com.au/bitcoins-smsf-investment-advice-save/
http://www.smsfwarehouse.com.au/

Wish me luck

[NickKaro]

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Putting the choice of investment asset aside, this is a heavily complex and regulated area (SMSF) and you should obtain professional advice and setup rather than doing it yourself. Separately, keep in mind that the compliance costs of setup and maintenance mean that the balance needs to be high enough to make it worthwhile.

[leoleo]

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It’s 75k. From what I am researching the audit and other fees will set me back 500-2000 / year max. I’m going to try and do it myself until I hit a roadblock or I find someone in the field that knows what a bitcoin is. I called someone before and during the chat she told me the bitcoins would have to be in a “third party account”. I tried to explain that this can’t possibly happen with bitcoin quickly gave up on that idea.

[NickKaro]

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If you are not an expert in this space I would make a few more calls as there are severe penalties for mucking it up, even if accidental.

For the record, this is not a plug as I do not provide SMSF advice, merely caution as I’ve read a number of cases where people are hit hard for errors in this space.

[leoleo]

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Will do, thanks for the advice

[Sophie517]

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This advice is general in nature…

First and foremost, u need to understand that an SMSF doesn’t mean u can just put the super where ever u as the trustee wants. There are rules such as diversification in order to limit ur investment risk. U r responsible for ur SMSF to comply with all regulations. So in ur SMSF written investment plan, how would u justify that $75K full balance in one asset class, Bitcoin meets diversification rules.

SMSF is currently being highly scrutinised and is likely to come under strict regulation in the near future as ATO continues to find a majority of SMSF non compliant.

SMSF auditors are being put under stricter compliance guidelines, as the tick and flick auditors are being phased out, kicked out or banned, u may find itself non compliant in the first year~ Which may force u to liquidate, and be taxed at the
Highest tax bracket anyway.

Though there is no mandate as to the minimum of an SMSF balance, it is hard to diversify cost effectively with less than 150-200k…

I would also highly recommend speaking with a financial adviser to see where u r at, and if u have the financial capacity and knowledge to manage ur SMSF. If u prefer to get ur financial advice at ur next neighbourhood BBQ, I would at least suggest for you to read more on SMSF esp on ur obligations and responsibilities, as well as consequences.

I have seen too many people set up non compliant SMSFs, roll it into a ‘so called’ promising investment opportunity~ then lose it. Remember some investments are set up deliberately to prey on SMSF, because it’s so easy for them to convince u to use the money you never see, to chase a dream you always desired.

But in fact had no returns, exorbitant fees, and no capital growth, just a promise.. Which set their retirement back by hundreds of thousands in opportunity costs.

I not going to convince u for or against… Just consider ur options and capacity

[arrowwise]

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Comments are regulations and running costs so far which is part of the hurdle.

Do you want to put 100% of your super into bitcoin or 100% of the funds for this new SMSF to be invested in bitcoin, but you also have regular super shares elsewhere?

Bitcoin is highly speculative and it could turn to dust by the time you retire. Have you considered this? How does that tick the safe / conservative and diversified box of retirement investing?

[leoleo]

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Sophie517, post: 232114, member: 70208 wrote:

This advice is general in nature…

Thanks for taking the time to reply. I haven’t considered diversification rules, might need to talk to someone about that. Maybe if I put a % in bitcoin, % in ether, % in litecoin etc.

[leoleo]

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arrowwise, post: 232128, member: 54026 wrote:

Comments are regulations and running costs so far which is part of the hurdle.

Do you want to put 100% of your super into bitcoin or 100% of the funds for this new SMSF to be invested in bitcoin, but you also have regular regular super shares elsewhere?

Bitcoin is highly speculative and it could turn to dust by the time you retire. Have you considered this? How does that tick the safe / conservative and diversified box of retirement investing?

100% in bitcoin. If the idea is to preserve capital for retirement I prefer to have a deflationary currency with only 21million ever been created than leave it in AUD or USD that you can print as much as you want.

[Sophie517]

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leoleo, post: 232129, member: 21240 wrote:

Maybe if I put a % in bitcoin, % in ether, % in litecoin etc.
Both r cryptocurrency .. Sounds like same asset class… Example of different asset classes would be shares, currency, property, precious metals, art, wine, numismatic etc

leoleo, post: 232130, member: 21240 wrote:

100% in bitcoin. If the idea is to preserve capital for retirement I prefer to have a deflationary currency with only 21million ever been created than leave it in AUD or USD that you can print as much as you want.

5 yrs ago.. People who equally had concerns for fiat currency flocked to precious metals. Silver went to $50usd then crashed .. It’s now 80% down from its all time high~
Just saying~ Don’t invest money u will miss~ And don’t be sure that it won’t tank~ or get expanded beyond its 21m~

[leoleo]

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There isn’t a single asset class that I would trust more at this point in time than Bitcoin. Shares will tank, the AUD will go below $0.50, property will crash %50. Art and wine are not liquid. Precious metals have very little intrinsic value and are riskier imo.

I bought bitcoin at $200 it’s not almost $500 usd. Can it go to $5000 in 10 years? I think it can and I’m willing to bet on it. Very committed to make it happen.

I wanted to thank you again for taking the time to reply Sophie, just because I disagree does not mean I don’t really appreciate your comments.

[LucasArthur]

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leoleo, post: 232134, member: 21240 wrote:

There isn’t a single asset class that I would trust more at this point in time than Bitcoin. Shares will tank, the AUD will go below $0.50, property will crash %50. Art and wine are not liquid. Precious metals have very little intrinsic value and are riskier imo.

Although this post seems to be a push for cryptocurrency more so than SMSF’s, I am curious on these rather specific interpretations of the future returns or lack thereof of these asset classes you are quoting?

Jason Ramage | Lucas Arthur Pty Ltd | E: [email protected]   P: 61 3 8324 0344    M: 61 412 244 888

[leoleo]

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http://www.macrobusiness.com.au/2015/07/mb-special-report-asset-allocation-in-the-great-australian-adjustment/

http://www.macrobusiness.com.au/2015/12/xmas-special-report-australia-and-the-100-year-bust/

http://www.amazon.com.au/Australia-Australian-Credit-Property-Bubble-ebook/dp/B00JJ7UW0S

https://en.bitcoin.it/wiki/Controlled_supply

[LucasArthur]

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Interesting

It’s a bit like investment advice, make sure you compile your idealogies from multiple sources…. Nice reading though…

Jason Ramage | Lucas Arthur Pty Ltd | E: [email protected]   P: 61 3 8324 0344    M: 61 412 244 888

[Corey]

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Putting 100% of your self managed superfund in one area is not wise.

Consider spreading the risk.

For example cash, stock, & collector coins from the Royal Australian Mint etc.

Cheers
Corey

[Author]

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