Look how your super fund can painlessly accumulate ever more assets
Loan to value ratio (L.V.R.) as a typical property increases in value - over 10 years
Year
Warrant 80% of original cost
Property value
LVR
0
$320,000
400,000
80%
1
$320,000
440,000
72%
2
$320,000
484,000
66%
3
$320,000
532,400
60%
4
$320,000
585,640
54%
5
$320,000
644,204
49%
6
$320,000
708,862
45%
7
$320,000
779,486
41%
8
$320,000
857,435
37%
9
$320,000
943,179
34%
10
$320,000
1,037,496
30%
The greatest power in this system is that your super can now grow exponentially instead of the present passive "linear" way.
At present, you would need to contribute large amounts of your own money to make your superannuation assets grow significantly.
Now, once you invest the initial 20% deposit (+ some set up costs), your super fund is able to grow powerfully without another contribution by you - ever. (of course your employer is compelled to continue paying his 9%)
This can really become exponential if you build assets in your personal name and as your wealth increases take out cash from time to time as deposit on more properties in your self managed super fund.
