Risky Business with Gen Y’s Desire to Invest in Property Through Their Super

According to new research there are two key mistakes that Generation Y are making when it comes to money management.

The first is making bad investments into companies that are struggling or are set to fail. The second mistake is investing too heavily in property through their self managed super fund (SMSF).

Investment property expert Gavin McPherson said that he has often seen young people put all their eggs in one basket when it comes to their SMSF, and this basket is generally an investment property. This over reliance on one investment scheme can be risky, he added.

McPherson explained that due to the lending rules for super, at least 30% of the total cost must be put down as a deposit. If that money is for an investment property and they make a poor choice in what the buy, then that’s a lot of money that won’t be making any capital growth soon, he said. A Gen Y investor will want to be absolutely sure the place they buy will give them a good return on investment.

Source: http://www.theaustralian.com.au/business/wealth/balancing-your-super-portfolio-why-a-little-property-goes-a-long-way-for-gen-y/story-e6frgac6-1226691698019

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