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Self-managed super funds are continuing to grow in popularity with the latest figures from the Australian Prudential Regulation Authority (APRA) showing assets increased to $22 billion.
APRA’s quarterly superannuation statistics for March 31, 2013 show <a target="_blank" href="https://www.smartcompany.com.au/superannuation/052307-government-warned-to-back-off-on-proposed-changes-to-smsfs">SMSF assets </a>now make up 33.9% of the total $68.4 billion increase in superannuation assets in the last quarter.
SMSF Professionals’ Association of Australian director, Graeme Colley, said this increase means the total assets in SMSFs now stands at $496.2 billion or about 31.5% of the total $1.58 trillion superannuation pool.
“What these numbers say about SMSFs is positive on two fronts,” he said in a statement.
“First, that the fund trustees and their professional advisors have not missed the upswing in the equity markets in this quarter or over the past year.”
Colley said the investment performance of the SMSF sector has been on a par or better than the other sectors.
“Second, that despite the market volatility of the past years post the global financial crisis, people still want to take control of their superannuation and be responsible for it,” he said.
“This reflects both a growing awareness by trustees of superannuation and their capacity to be able to get professional advice on all issues pertaining to the management of their SMSF.”
A spokesperson from the Australian Institute of Superannuation Trustees said the APRA data showed industry funds were aware of the market competition from SMSFs and are increasingly offering products which compete.
“While the figures also show strong growth in the SMSF sector, superannuation funds are increasingly offering innovative, good value new products and services, which mirror some of the features of self-managed funds and aim to help retain members, particularly those with large balances,” the spokesperson said.
This article originally appeared on <a target="_blank" href="https://www.smartcompany.com.au/">SmartCompany</a>.
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APRA figures show SMSF assets have hit $22 billion

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The SMSF Professionals’ Association of Australia has developed best practice guidelines for self-managed super fund limited recourse borrowing arrangements (LRBA).
This week SPAA announced NAB has agreed to adhere to the two separate guidelines.
NAB is the first lender to sign up to the guidelines for <a href="https://www.smartcompany.com.au/finance/superannuation/22072-20110922-borrowing-smsf-cash-for-property-repairs-the-do-s-and-don-ts" target="_blank">LRBA</a> with the SPAA saying sign up from the other major banks is in progress.
Andrea Slattery, chief executive of the SPAA, said in a statement the association has been “very conscious” of concerns expressed about LRBAs and in particular about a “tiny rogue minority” spruiking this borrowing facility.
“We believe that by publishing these guidelines, and with NAB signing on and other major lenders in the pipeline (the major banks are estimated to have more than 85% of this market), the government and regulators can have a high degree of confidence that LRBAs are being used appropriately and that the industry has best practice guidelines for lending and advice in place,” she says. 
The two guidelines are LRBA lenders’ best practice guidelines and LRBA advice best practice guidelines.
Slattery says adherence to the guidelines by the banking and financial advice industry will ensure LRBAs are being used appropriately by SMSF trustees, and encourages self-regulation in the SMSF lending sector by lenders and advisers.
Jeff Bresnahan, chairman of SuperRatings, told SmartCompany there is a need for restrictions like this in the SMSF sector. 
“If SMSFs are going to come under scrutiny and there is going to be failures, there is a high chance it will be in the property area. There will always be the temptation for unscrupulous behavior in that sector,” he says.   
“The property spruikers are back and are targeting SMSF members so these guidelines can offer protection.”
Bresnahan says he is not concerned that some SMSFs may miss out on loans under the guidelines. 
“If the guidelines are well thought out then there should be an appropriate level of gearing, if people miss out because they were going to do something highly leveraged then that is not a bad thing,” he says.
“That is a positive move to protect people.”
Bresnahan warns the industry, valued at half a trillion dollars, has its risks.
“SMSFs are great for a lot of Australians, but there are a lot of SMSFs out there that have been sold probably inappropriately to people who should not have them and they have to be protected from their own greed and lack of financial literacy,” he says.    
Bresnahan says in mainstream super funds investors are protected by the Australian Prudential Regulation Authority in the event of default but SMSFs don’t have that protection.
“The more restrictions that are put in place the better I believe,” he says.
This article first appeared on <a href="https://www.SmartCompany.com.au" target="_blank">SmartCompany</a>.
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Banks to impose restrictions on SMSF borrowing

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Continued legislative tinkering to the superannuation system is forcing individuals <a href="https://www.smartcompany.com.au/superannuation/052307-government-warned-to-back-off-on-proposed-changes-to-smsfs">to abandon super and self-managed super funds</a>, leading to $16 billion not being placed into SMSFs, according to research published this week.
The research by the SMSF Professionals Association and Russell Investments found that as a result of lower contribution caps and continued changes to super, 54% of SMSF trustees would change the decisions they are making currently about their strategies towards their retirement.
Launching the research, SPAA chief executive Andrea Slattery said, of those who would change, 75% said they would invest in things other than super.
“That would be outside of super, not inside of super, and so that leads towards $16 billion not being placed in the superannuation system in this last 12 months,” she says.
“It shows there are big numbers in the SMSF sector which are mainly professionals, small business and the self-employed that are not putting money into super and if they are not putting it into super they are putting it elsewhere or spending it.”
Slattery says negative gearing has been the main benefactor of the movement out of superannuation, with confidence amongst SMSF trustees low.
In July last year the amount of pre-tax income people over the age of 50 may put into super each year was halved to $25,000.
Trustees now have to deal with legislative risk, according to Alan Schoenheimer, chief executive of Russell Investments in the Asia Pacific.
“I think trustees are learning a new risk called legislative risk, which they used to ignore in the past but now it is becoming clear this is a major dilemma,” he says.
“You put your money into the system and once it is in it is locked in, and you can’t reverse that decision, and now it is there for the government to raid.”
Schoenheimer says 10 or 15 years ago people were encouraged to contribute more than the required amount into superannuation and they were given incentives to do that and told it was a good thing.
“It is in a system where you can’t hide it by the way, it is there for all to see and Australian Prudential and Regulation Authority or the Tax Office or someone have your statistics and can look at it all the time and you can’t hide it out, you can’t get it out and all of a sudden the rules change.”
“I would have thought there were a lot of angry people right now.”
This article first appeared on Smart Company.
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Government tinkering with superannuation proving costly

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Australian investors have benefited from almost $70 billion in dividends throughout 2013-2014 with $10 billion going to self-managed superannuation funds, according to analysis by Credit Suisse.
Fairfax reports the dividend haul is a record $67.8 billion, up from $61.3 billion in 2012-2013.
“This is what investors want now, especially ‘selfies’ [SMSFs] who are collecting more than $10 billion of dividends themselves,” Credit Suisse equity strategist Hasan Tevfik <a href="https://www.afr.com/p/business/companies/epic_billion_dividend_haul_for_investors_CbbhL0wc7v8D1UY6TWk4VK" target="_blank">told Fairfax</a>.   
Jordan George, senior manager of technical and policy at the SMSF Professionals’ Association of Australia told SmartCompany his research shows that as of the end of 2013 SMSFs held 11.5% of market capitalisation of the ASX.
“If you look at that in context of a $70 billion flow of dividend, $10 billion to SMSFs seems right,” he says.
“We know SMSF investors have a preference for franked dividends as it helps them provide an income stream in retirement and that’s important to consider when we know 35% of SMSFs are in pension stage and are taking an income stream.”
George says SMSF trustees at the pension stage need to generate cash flow to fund paying a pension so dividends are important to maintain that.
“But it’s important to recognise for all super funds there are the same incentives to invest in franked dividends, it is not just an SMSF issue,” George says.
This article first appeared on <a href="https://www.SmartCompanycom.au" target="_blank">SmartCompany</a>.
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$70 billion dividend payout with $10 billion to SMSFs

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Former chairman of BHP Billiton and chief executive of the National Australia Bank, Don Argus, is embroiled in a legal battle with the Australian Tax Office over his superannuation.
The ATO wants to charge tax on almost $1.2 million in income earned by the $15 million self-managed superannuation fund of <a href="https://www.smartcompany.com.au/leadership/profiles/21793-20110906-the-selling-of-reform">the elder statesman</a> and his wife, Patricia.
Argus, who is now chairman of the Bank of America Merrill Lynch Australia Advisory Board, claims the income should be tax free.
On 16 April 2014 the Argus’s objected to the ATO’s assessment of income tax issued to their SMSF for the year ended 30 June 2010.
On 29 September 2014 the ATO disallowed the objection and so the Argus’s have now filed an application for the decision to be varied in the Federal Court.
The Argus’s are seeking an almost $1.2 million reduction on the tax paid by them for the 2010 tax year claiming the assessment of $2.25 million in tax is “excessive” because it wrongly concluded the SMSF did not pay out the minimum amount required.
Graham Colley, director of technical and professional standards at the SMSF Professionals’ Association, said with a $15 million fund value the minimum amount of pension to be paid should be around $900,000. 
“[SMSF trustees] need to make sure you pay the minimum amount of your pension for the year,” he says.
“You can do it simply by making sure you have direct debits into your bank account.”
Colley advises SMSF trustees also need to make sure the valuation of the investments are made so the calculation of the amount has been correctly done. 
“Even if you have underpaid a small amount the commissioner will exercise his powers of administration providing you make up the shortfall as soon as it is discovered,” he says.
“Make sure you know when your pension starts, make sure you know when it stops and one of the standards to qualify as a pension is to make sure you pay the minimum amount.”
<a href="https://www.afr.com/p/national/don_argus_takes_on_taxman_over_super_JwuiiKK4asPzKTku9UdW9K" target="_blank">Fairfax</a> reports the dispute is scheduled for a court hearing in Melbourne on 2 Februrary.
SmartCompany contacted Argus but did not receive a response prior to publication.  The ATO declined to comment.
This article first appeared on <a href="https://www.smartcompany.com.au/" target="_blank">SmartCompany</a>.
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Former BHP chairman Don Argus takes on the Tax Office over his $15 million SMSF 

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The number of self-managed superannuation funds in breach of borrowing requirements increased over the past year, according to research by the Partners Wealth Group.
<a href="https://www.partnerswealthgroup.com.au/wp-content/uploads/2015/01/2014-Partners-Wealth-Group-Audit-Survey.pdf" target="_blank">The research</a> is based on over 600 SMSFs across Australia audited in 2014 and found 23% of funds with a relevant breach were in breach as a result of borrowing requirements.
This is a significant increase from 12% of funds the year before.
However, overall the number of SMSFs requiring a contravention report to be lodged with the ATO has fallen over the past year in line with the past seven years.
<table style="width: 460px;" border="1" cellspacing="0" cellpadding="0"><tbody>
<tr>
<td valign="top" width="77">
Year
</td>
<td valign="top" width="77">
2014
</td>
<td valign="top" width="77">
2013
</td>
<td valign="top" width="77">
2012
</td>
<td valign="top" width="77">
2011
</td>
<td valign="top" width="77">
2010
</td>
<td valign="top" width="77">
2009
</td>
<td valign="top" width="77">
2008
</td>
</tr>
<tr>
<td valign="top" width="77">
% funds in breach overall
</td>
<td valign="top" width="77">
5
</td>
<td valign="top" width="77">
5.3
</td>
<td valign="top" width="77">
5.3
</td>
<td valign="top" width="77">
5.5
</td>
<td valign="top" width="77">
3.4
</td>
<td valign="top" width="77">
7.2
</td>
<td valign="top" width="77">
11.3
</td>
</tr>
</tbody></table>
 
<table style="width: 460px;" border="1" cellspacing="0" cellpadding="0"><tbody>
<tr>
<td valign="top" width="205">
Key breaches 
</td>
<td valign="top" width="205">
% of funds with relevant breaches in 2014
</td>
<td valign="top" width="205">
% of funds with relevant breaches in 2013
</td>
</tr>
<tr>
<td valign="top" width="205">
SMSF borrowings
</td>
<td valign="top" width="205">
23%     
</td>
<td valign="top" width="205">
12%
</td>
</tr>
<tr>
<td valign="top" width="205">
Loan to members
</td>
<td valign="top" width="205">
23%
</td>
<td valign="top" width="205">
38%
</td>
</tr>
<tr>
<td valign="top" width="205">
In-house assets
</td>
<td valign="top" width="205">
20%
</td>
<td valign="top" width="205">
31%
</td>
</tr>
</tbody></table>
Partners Wealth Group director of SMSF consulting and auditing, Martin Murden, attributes the increase in breaches to a misunderstanding of the rules.
SMSFs are entitled to borrow under limited circumstances in order to pay benefits, settle on investments and acquire investments via a limited recourse borrowing arrangement (LRBA).
“Because borrowing via a LRBA is relatively new and has been subjected to several rule changes since inception, my suspicion is that there has been confusion, resulting in some SMSF trustees thinking it was permissible to use their fund to borrow to overcome a short-term liquidity problem – much like a small business seeking a temporary extension to a bank overdraft in difficult circumstances,” Murden said in a statement.
Two other key areas of transgression highlighted by the Partners’ research came from funds taking personal loans for members and funds breaching the in-house assets rule.
Murden said, periodically, loans occur by mistake. For example, using the wrong cheque book (that of the SMSF) to pay a personal expense. On other occasions members are simply in need of money and there is no one to stop them from borrowing from the fund.
“However, it is important to remember that while the loan may appear small in dollar terms and when compared to overall fund assets, personal loans are simply not allowed under super legislation. They’re an absolute no-no and size is no excuse,” Murden said. 
Graeme Colley, director of technical and professional standards at the SMSF Professionals' Association of Australia (SPAA), said the spike probably means auditors are being more fastidious in analyzing the operation of SMSFs.
“Hopefully with requirements for the registration of auditors, the auditors that are left in the registration group are taking their jobs more seriously as they have greater obligations in reporting to ASIC,” he says.
“We may see an increase again simply because of the thoroughness of the audits that are conducted.”
Colley says the types of breaches identified by the Partners Wealth Group are not surprising.   
“The main issue is people taking money out of their funds, in-house assets which is next and then separation of assets,” he says.
“Mixing assets is really serious as it means SMSF trustees may be putting their hand into the operation of the fund.”
This article first appeared on <a href="https://www.smartcompany.com.au/" target="_blank">SmartCompany</a>.
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Spike in number of SMSFs in breach of borrowing requirement

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The self-managed superannuation fund sector is soaring, with the Australian Taxation Office revealing it expects more than 1,000 applications a week to be lodged for SMSFs in May and June this year.
Speaking at the annual <a target="_blank" href="https://www.smartcompany.com.au/superannuation/054815-asic-sounds-warning-bell-on-smsfs">Australian Securities and Investments Commission</a> forum in Sydney yesterday the ATO's commissioner for SMSF, Stuart Forsyth, said the rush was already on with the office receiving a record 500 applications to set up new funds in one day last week.
"It is the highest we have ever seen on one day," he said.
"It is an illustration of the growth that is out there."
This last minute surge before the end of the tax year will take the total number of <a target="_blank" href="/news">SMSFs</a> to half a million, although Forsyth said the ATO rejected about 68 of the 500 applications as being unsuitable.
Graeme Colley, director of education and professional standards at the SMSF Professionals Association of Australia, told SmartCompany a surge in applications for SMSFs was "not surprising" towards the end of the financial year.
"You can get a tax deduction of up to $25,000 on your contributions, so traditionally there is a spike towards the end of the year," Colley says.
"People are disillusioned with larger funds and there is more interest in SMSFs generally, which influences people to set up their own funds."
Colley believes speculation about the budget and the impact of what will happen means people are trying to protect themselves from any superannuation changes by setting up an SMSF.
He says the ATO receiving 500 applications in one day last year is interesting and he assumes people are setting up the SMSFs for the right purposes.
"The concern is that people are panicking or rushing in to set up an SMSF and hopefully the advice they are getting is for the right purpose to provide retirement benefits; they need to look before they leap," Colley says.
The ATO also revealed at yesterday's forum that it will seek to close down as many as 10,000 self-managed superannuation funds this year, targeting funds that are inactive and have not been lodging annual tax returns.
Forsyth told the forum the closures come at the end of a year-long review of the SMSF sector.
According to Colley this shutdown of SMSF funds is not something SMSF trustees should be concerned about.
He says "every now and again" the ATO goes through its database and looks at those funds which are inactive or have been closed down and it undertook a similar exercise a few years ago.
"When you look at shutting down 10,000 funds out of half a million it is only 2% of the total number, it is a very small proportion," he says.
"The ATO will notify trustees a number of times before closing down a fund, it's not like opening and shutting a shop."
This article first appeared on <a href="https://www.google.com.au/url?sa=t&amp;rct=j&amp;q=&amp;esrc=s&amp;source=web&amp;cd=1&amp;cad=rja&amp;ved=0CDMQFjAA&amp;url=http%3A%2F%2Fwww.smartcompany.com.au%2F&amp;ei=qVJSUYTyLcnYigeQxIDQBQ&amp;usg=AFQjCNHpZnYFW6OgdohnBFaGGjvpykD8CA&amp;bvm=bv.44342787,d.aGc" target="_blank">SmartCompany</a>.
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ATO prepares for influx of SMSF applications

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Troubled Vietnamese restaurant chain MissChu has been sold to a company controlled by <a href="https://www.smartcompany.com.au/leadership/profiles/30077-nahji-chu" target="_blank">MissChu founder Nahji Chu</a> for an undisclosed price.  
KordaMentha confirmed the sale of the MissChu business this morning to MissChu Holdings, a company controlled by the Mawson Group and Nahji Chu.
Rahul Goyal and Janna Robertson of Korda Mentha were appointed as administrators of MissChu in December last year.
The MissChu business operates six retail tuckshops and a catering business in New South Wales and at its height it was turning over $20 million a year.   
The Melbourne MissChu businesses were not affected by the voluntary administration and <a href="https://www.smartcompany.com.au/finance/45365-misschu-to-close-london-store-economic-data-points-to-slowing-chinese-economy-midday-roundup" target="_blank">the London store closed in January</a>.
Chu fought hard to save her business, <a href="https://www.smartcompany.com.au/finance/cashflow/45494-weneedchu-misschu-takes-to-social-media-in-attempt-to-keep-chain-afloat" target="_blank">launching a #weneedchu campaign</a> on social media in an attempt to keep her business afloat.
She has <a href="https://www.smartcompany.com.au/finance/45514-misschu-founder-nahji-chu-how-the-ato-cost-me-my-business" target="_blank">previously blamed the Australian Tax Office</a> for the collapse of MissChu, an allegation the <a href="https://www.smartcompany.com.au/finance/tax/45602-ato-hits-back-at-misschu-after-being-blamed-for-its-demise" target="_blank">ATO strongly disputed</a>.
The sale to Chu followed what KordaMentha described as an “extensive marketing campaign” where approximately 60 expressions of interest were received.
KordaMentha sought final offers from the preferred bidders and proceeded to accept the best offer that was able to be completed.
The settlement is due to take place in about 15 business days.
Goyal said in a statement that the administrators conducted an “extensive marketing campaign”.
“KordaMentha conducted a broad sale process, and we are pleased that the business can continue as a going concern and that jobs could be preserved,” he said.
Goyal said a scheduled report to creditors and second meeting of creditors will provide further information on the likely outcome for unsecured creditors and employees from the administration.
Sixty employees <a href="https://www.smartcompany.com.au/finance/45153-i-m-hurting-and-i-m-working-through-it-misschu-founder-says-the-restaurant-chain-will-trade-through-voluntary-administration" target="_blank">were terminated in January</a>. 
KordaMentha said all the New South Wales outlets would remain open.
SmartCompany contacted Chu for comment but did not receive a response prior to publication.
This article first appeared on <a href="https://www.smartcompany.com.au/" target="_blank">SmartCompany</a>.
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Nahji Chu buys MissChu business back out of administration

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The consumer watchdog has instituted proceedings in the Federal Court against best-selling property investment author Rick Otton and his business We Buy Houses for alleged breaches of the Australian Consumer Law.
Otton is the author of How to Buy a House for a Dollar, which was rated as one of the Top 10 Most Popular Business Titles for 2013 by Money Magazine and Dymocks.
The Australian Competition and Consumer Commission claims Otton made representations to consumers that by attending seminars and boot camps they would be able to buy a house for $1; buy a house using little or none of their own money; and build property portfolios without their own money invested and without new bank loans.
The seminars and boot camps range in cost from $2,997 to approximately $17,000 for a mentoring program. 
The ACCC claims the strategies do not enable consumers to buy a house for $1 but rather involve consumers acting as middlemen to facilitate property transactions between third party sellers and third party buyers.
The alleged representations were made in a number of mediums since at least  1 January, 2011 including in published materials, on websites and during various events such as seminars and “boot camps”.
Otton is travelling so was unable to answer questions but provided a statement defending his business and book.
“It seems that the ACCC thinks that the public are fools, that they will take the title literally and think that they only need a dollar to buy a house,” he said.
“It’s a sad day when the ACCC thinks the Australian public is that foolish that they don’t understand that the dollar is just the start of the process.”
Otton claims the expression is often used in business that you can buy a business for $1, that is, for the value of the debt owed by the business.
Otton says the We Buy Houses “technique” involves buying a property where the loan repayments on a house are creating hardship for the owner, and the loan amount is so high that the owner cannot sell the house for enough money to pay out the loan.
“Why wouldn’t the owner welcome someone new who can step in, agree to buy the house and pay out the loan down the track?” he says.
“The ACCC is taking a literal interpretation of the title, it’s like saying the book Fifty Shades of Grey is misleading because it’s not about paint colours, or that David Niven’s memoirs, The Moon’s a Balloon, isn’t about the moon.”
ACCC chairman Rod Sims said in a statement that the watchdog is concerned the strategies promoted by We Buy Houses and Otton “target vulnerable consumers who don’t qualify for bank loans or who are having difficulties meeting their mortgage repayments”.
Otton came under scrutiny in 2013 <a href="/news/wa/best-selling-property-investment-authors-wa-seminars-banned-department-of-commerce">when his seminars in Western Australia were banned by the Department of Commerce</a> on the basis of misleading advertising. 
The matter is listed for a directions hearing in Sydney on 1 April, 2015.
This article first appeared on <a href="https://www.smartcompany.com.au/" target="_blank">SmartCompany</a>.
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ACCC drags Rick Otton to court for his “Buy a house for $1” claims

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Billionaire investor Warren Buffett published his eagerly anticipated annual letter to shareholders of his company Berkshire Hathaway this weekend.
The letter is a <a href="https://www.smartcompany.com.au/finance/investment/41783-five-gems-from-warren-buffett-s-annual-shareholders-meeting">flagship event in the business calendar</a> as the investment guru updates shareholders on the company’s progress while dropping plenty of investment wisdom on the way.
The letter is published ahead of Berkshire Hathaway’s annual meeting, which Buffett refers to as “Woodstock for capitalists”.
Here are six pearls of wisdom from this year’s edition:
1. Beware of investment bankers
Buffett takes aim at investment bankers on Wall Street in his annual letter.
“The Street’s denizens are always ready to suspend disbelief when dubious manoeuvres are used to manufacture rising per-share earnings, particularly if these acrobatics produce mergers that generate huge fees for investment bankers.”
2. Don’t dawdle
Buffett acknowledged he stuffed up by being slow to sell shares of the British supermarket chain Tesco, which wound up costing Berkshire Hathaway $US 444 million.
“An attentive investor, I’m embarrassed to report, would have sold Tesco shares earlier,” he says. “I made a big mistake with this investment by dawdling. Charlie calls this sort of behavior ‘thumb-sucking.’ (Considering what my delay cost us, he is being kind.)”
Buffett noted the loss amounted to only 0.2% of Berkshire’s net worth.
3. The need for post mortems
The investment guru concedes that he has made mistakes along the way, particularly the use of Berkshire shares to purchase businesses with “limp” earnings.
“Mistakes of that kind are deadly. Trading shares of a wonderful business – which Berkshire most certainly is – for ownership of a so-so business irreparably destroys value,” he says. 
Buffett advocates post mortems of all acquisitions in order to determine “an elementary reality” whether the intrinsic value of the shares you give in an acquisition is less than the intrinsic value of the business you receive.
“I’ve yet to see an investment banker quantify this all-important math when he is presenting a stock-for-stock deal to the board of a potential acquirer,” he says.
“Post mortems of acquisitions, in which reality is honestly compared to the original projections, are rare in American boardrooms,” he says.
“They should instead be standard practice.”
4. Forget about the too-good-to-be-true bargain
Buffett recommends focusing on paying a fair price for top businesses rather than a bargain price for a mediocre business.
“Forget what you know about buying fair businesses at wonderful prices; instead, buy wonderful businesses at fair prices,” he says.  
5. Always have cash flow
Buffett revealed Berkshire Hathaway maintains $US20 billion in cash reserves at all time.
While that’s a little unrealistic for most small businesses, Buffett says cash reserves are key.
“At a healthy business, cash is sometimes thought of as something to be minimized – as an unproductive asset that acts as a drag on such markers as return on equity,” he says.
“Cash, though, is to a business as oxygen is to an individual: never thought about when it is present, the only thing in mind when it is absent.”
Buffett says that in 2008 when other businesses went under Berkshire was uninterrupted.
“When bills come due, only cash is legal tender. Don’t leave home without it.”
6. Work out your succession
While not naming names Buffett has assured shareholders he has the succession question well in hand at Berkshire Hathaway.
The investment guru says he and the board of directors “believe we now have the right person to succeed me as CEO,” and who in some respects “will do a better job than I am doing.”
Buffett also left open the prospect of a female chief executive saying, “Gender should never decide who becomes CEO.”
You can read Buffett’s <a href="https://www.berkshirehathaway.com/letters/2014ltr.pdf">letter to shareholders in full here</a>.
This article first appeared on <a href="https://www.smartcompany.com.au/" target="_blank">SmartCompany</a>.
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Six pearls of wisdom from Warren Buffett’s 2015 letter to shareholders

ASX-listed developer Cedar Woods is progressing its plans for its Southbank arts precinct site.&nbsp;

The developer has filed plans, which are now with the&nbsp;Department of Transport and Planning, for a new 20-level tower at&nbsp;<a href="https://www.apartments.com.au/new-apartments/141-151-sturt-street-southbank-vic-3006">141–151 Sturt Street</a>, a 2,718 sqm block opposite the Habitat Filter sculpture.

The proposal seeks to demolish the two-level&nbsp;commercial building, including a small supermarket and medical tenancies, and create a new building with 180 apartments and a focus on an&nbsp;active public realm and arts integration.

&nbsp;

<img alt="Southbank site" data-entity-type="file" data-entity-uuid="76a72db6-91ef-43ae-827d-a9cfa72893d2" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Site.png?VersionId=DZgtB4K6BswVh0QtCs3iLjXaLp0CbcEb" />

&nbsp;

There will be a full mix of apartment configurations, including 28 studio apartments, 16 one-bedroom, 104 two-bedroom, and 32 three-bedroom units.

Retail, creative arts, and residential amenity functions are integrated across the lower levels. A food and drink tenancy is planned to front Dodds Street, while a retail tenancy fronting Sturt Street will be accessed via an elevated walkway. The first floor includes a substantial 734 sqm creative arts space, envisioned to support Melbourne’s growing cultural and digital industries.

Architecture firm <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a> has put together the plans. In their&nbsp;Urban Design Report they highlighted the project’s ambition to embed itself within Southbank’s evolving cultural fabric.

A central feature of the design is a through-block link connecting Sturt and Dodds Streets, landscaped with native plantings and embedded with universal access ramps.

“The ramp has been thoughtfully integrated as the primary access point, ensuring universal accessibility for all users,” the report noted, with the link offering “a direct response to the urban planning scheme of creating more green spaces within our communities”.

<img alt="Southbank podium" data-entity-type="file" data-entity-uuid="4d24b1b2-d69c-4a11-a11d-ec6df432221c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/podium.png?VersionId=geWoJyZDmPSLODZ_.PNJ0LvpOmyyCdpo" />

The building’s podium form responds to the mandatory height limits along Dodds Street and maintains a fine-grain interface to adjoining developments. Above the podium, the tower is articulated with recessed balconies and a focus on views toward the CBD and surrounding arts institutions. A communal rooftop recreation deck and indoor lounge are positioned on level four, adjoining seven apartments and providing over 900 sqm of resident amenity space.

Vehicle access and loading will be provided via Dodds Street, with 155 resident car spaces located across two basement levels and the first three above-ground floors. Bicycle storage is more generous, with 226 spaces distributed across resident, staff and visitor needs.

Rothelowman describes the architecture as “humanist,” with ground-level interfaces designed to encourage social interaction and provide a dignified entry for both residents and passers-by. “All street interfaces are crafted to invite and nurture human connections,” the design report states. “The façade transitions to a human scale, providing an approachable and engaging streetscape”.

Cedar Woods, while well-known for its large communities it develops outside of Australia's capital cities, they have recently developed in Melbourne's inner-ring before. They are approaching completion at <a href="https://www.apartments.com.au/new-townhouses/88-leveson-north-melbourne-88-leveson-street-north-melbourne-vic-3051">88 Leveson</a>, just 15 townhouses in the heart of North Melbourne.

Joel Robinson

Cedar Woods progresses with new apartment plans in Southbank arts precinct

Brisbane developers Core Property Partners and Vector Property Australia has teamed up for Brisbane's newest apartment development.

The duo identified <a href="https://www.apartments.com.au/developments/east-brisbane-qld-4169">East Brisbane</a> as their preferred suburb, on the fringe of the Gabba Precinct, where they've just revealed BANKSII, 72 apartments opposite Raymond Park.

[smartcode_project:default project_id=136432 project_image_fid=5481]

The one-, two-, and three-bedroom apartments will sit in a glass-wrapped building that will also feature a rooftop with an&nbsp;infinity-edge pool, a BBQ area and alfresco dining spaces, sun lounges, and a sauna, as well as a resident-only gym and a ground-floor cafe.

Rhett Williams, Director of Vector Property Australia, said the project will lift the quality of the East Brisbane community and set a new benchmark.

"In Brisbane’s current property landscape, <a href="https://www.apartments.com.au/new-apartments/banksii-east-brisbane-169-wellington-road-east-brisbane-qld-4169">BANKSII</a> stands out through its emphasis on lifestyle-oriented living, connectivity and sophisticated design," Williams says.

[smartcode_project:default project_id=136432 project_image_fid=5479]

The 10-level building has been designed by MAS Architecture. Their designs were inspired by the native Banksia flower, with the architecture and interiors reflecting the organic symmetry of its namesake flora. MAS has interpreted this throughout the building’s curved form, façade detailing and interior palette.&nbsp;

The building’s flowing geometry and natural tones are complemented by large balconies and floor-to-ceiling glazing, maximising cross-breezes, daylight and views over the city, parklands and river.

“Having a strong narrative for a building helps us architecturally,” MAS noted. "We can choose colours that come off that species of flowers. The trunk and the trees and the flower elements all are now visible in our joinery on the inside and in our architectural finishes on the outside."

[smartcode_project:default project_id=136432 project_image_fid=5485]

Apartments will feature timber floors, soft porcelain tiles, brushed bronze fittings, and stone benchtops with warm veining.&nbsp;

Kitchens feature premium SMEG appliances and generous storage, while bathrooms have been designed as calming retreats with curved cabinetry and twin sinks in the master ensuites.

The building will feature a suite of rooftop and wellness amenities. Residents will have access to an infinity-edge pool, BBQ and alfresco dining areas, sun lounges and a rooftop sauna.&nbsp;

A residents-only gym will be located on the podium level, while a ground-floor café and landscaped laneway will further activate the site and improve neighbourhood connectivity.

[smartcode_project:default project_id=136432 project_image_fid=5488]

BANKSII will rise from a prime Wellington Road site, with the building oriented to overlook the adjacent Raymond Park and take in extensive city views. It is also on the doorstep of key&nbsp;lifestyle infrastructure, including the future Kangaroo Point Green Bridge, The Gabba stadium, and the planned Brisbane Live arena.&nbsp;

Public transport options, including ferry, bus and rail - including the future Cross River Rail Woolloongabba station - are all nearby, supporting a car-optional lifestyle just minutes from the CBD.

Williams said the team spent over a year searching for the ideal site before securing this location.

"We were attracted to <a href="https://www.apartments.com.au/developments/east-brisbane-qld-4169">East Brisbane</a> as it is a vibrant and growing community that offers a perfect balance of urban convenience and natural beauty with the parklands and river on our doorstep.”

The project is part of the broader Woolloongabba Games precinct, which is undergoing significant investment in the lead-up to the 2032 Brisbane Olympics. This urban renewal, coupled with infrastructure upgrades, is expected to enhance long-term liveability and capital growth in the area.

Given the wide max of configurations, BANKSII is expected to suit everyone from first home buyers and investors to families and downsizers.

[smartcode_project_cta:default project_id=136432]

BANKSII sales launch in booming East Brisbane apartment market

The Minns Labor Government will deliver Sydney’s first new heavy rail station in more than a decade – enabling up to 10,000 new homes by rezoning land around Woollahra and Edgecliff stations, right next to the CBD, to tackle the housing crisis and rebalance growth across the city.

Recent reports by the NSW Productivity Commission have warned that Sydney is losing twice as many young people as it is gaining, while also finding that Woollahra is the most feasible Local Government Area (LGA) in New South Wales to build new housing.

Despite this, housing approvals in Woollahra consistently lag well behind other LGAs, and the population has declined by 11 per cent over the past 50 years while Greater Sydney as a whole has grown by 74 per cent.

The new station that will be an eight-minute trip from Sydney CBD, will be located on the Eastern Suburbs train line in Woollahra, where a station build was started in the 1970s but never completed.

To enable the delivery of new homes the NSW Government will lead a rezoning of Woollahra and Edgecliff stations similar to other state led rezonings to allow additional homes to be built around the stations.

Affordable housing will also make up a proportion of development on the site with the final amount of affordable housing required, to be determined as part of the rezoning process.

The area surrounding the new station is within walking distance of major green and recreational space including Cooper, Trumper, Rushcutters Bay and Centennial Parks.

The Eastern Suburbs train line between Bondi Junction and Sydney CBD also has the lowest passenger usage rates during the AM peak of any line on the Sydney network, with only 43 per cent of operating capacity during the AM peak currently being utilised by passengers.

Sydney Water and Infrastructure NSW have confirmed there is capacity in the water and wastewater systems to accommodate the proposed 10,000 dwellings without major upgrades.

The rezoning is expected to take around two years and will further support the Government’s housing targets that rebalance the delivery of new homes around existing infrastructure.

&nbsp;

&nbsp;

Next stop Woollahra train station - delivering up to 10,000 new homes in the heart of Sydney

<section data-element_type="section" data-id="b086848">
Fresh off completing its mixed-use Malvern project Malvern Collective, Kokoda Property Group has acquired a prime site on Richmond's Bridge Road.

They are planning a mid-rise residential development with&nbsp;integrated wellness amenities and a vibrant ground-floor retail and dining offering.

The site, at&nbsp;487–495 Bridge Road, spans&nbsp;1,650 sqm with 50 metres of dual frontage across Bridge Road and Palmer Street. It is currently leased to Adairs, and has a large retail building and 20 onsite car parks.
</section>

<section data-element_type="section" data-id="534a164">
Kokoda Property Group’s acquisition forms part of a broader phase of growth in Melbourne, building on momentum from the completion of Malvern Collective and the recent purchase of a Burnley Street site for the developer’s first commercial project.&nbsp;

Mark Stevens, Kokoda Property Group’s Founder and Managing Director, said that the company’s Bridge Road site acquisition signals confidence in a city that is re-accelerating.

“Melbourne is regaining momentum,"&nbsp;Stevens said.

"After a cautious period post-COVID, we’re seeing buyer sentiment stabilise and capital leaning back into well-located, quality projects. Victoria now benefits from deep builder capacity and competitive delivery pricing, creating a rare opportunity to bring design-led inner-city developments to market without compromising on craftsmanship.

“Richmond ticks all the boxes for us – connectivity, culture and everyday amenity – making Bridge Road the perfect address for an amenity-rich, multi-use development."

<img alt="Kokoda" data-entity-type="file" data-entity-uuid="9a8de51d-8092-480a-8b7e-e081816692c2" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-08-29%20at%208.54.27%E2%80%AFAM.png?VersionId=VRHpV5.6beOu2cieKHWrw3ErMPuVOAuj" />

Envisioned as an “urban lantern” the building will bring a distinctive new presence to Bridge Road with a sculptural retail frontage, designed to honour the street’s heritage character while contributing to its renewal.

Stevens said the acquisition reflects the developer’s commitment to design-led addresses in Melbourne’s inner city.

“Drawing on Richmond’s rich heritage and dynamic character, we’ve envisioned a contemporary building that respects the past while elevating the way people live today. With dual frontages, curated ground-floor spaces, and a focus on wellness, this project will contribute to the neighbourhood’s evolution, appealing to both downsizers and a new generation of professionals.”

Kokoda Property will now progress concept design ahead of a future planning process.
</section>

Mark Stevens, Kokoda Property Group’s Founder and Managing Director, said that the company’s Bridge Road site acquisition signals confidence in a city that is re-accelerating

First look: Kokoda secures Richmond site for new apartment development

Gold Coast developer Drew Group is fast approaching sell-out at its Main Beach apartment development, Lagoon Main Beach.

In the last nine months, Drew Group and sales partner Pezet Matheson have secured 31 sales totalling over $75 million, as the two-tower development advances towards completion under the expert eye of Hutchinson Builders.

“Today's buyers are more discerning than ever," Drew Group Managing Director Jon Drew says.

"It's essential to provide something truly unique that sets a development apart, and we believe Lagoon has achieved just that."

[smartcode_project:default project_id=108747 project_image_fid=193023]

Just over 50 per cent of recent&nbsp;sales have been to local buyers, reflecting the deep trust and connection within the Gold Coast community that Drew Group has developed over the years.

Demand has been particularly robust at the top end, with two of the three exclusive penthouses already sold, alongside five sub-penthouses. Only seven apartments remain in Lagoon's Signature Series — one&nbsp;penthouse and six sub-penthouses.

[smartcode_project:default project_id=108747 project_image_fid=284864]

Drew Group has also removed the much-maligned sunset clause from all contracts at Lagoon. The sunset clause — although rarely invoked, yet on occasion known to have been — allows developers to take back contracts on apartments should the building not be completed within the timeframe specified in the contract.

Pezet Matheson Co-Director Jayde Pezet says the fact Lagoon is&nbsp;within a year of completion, and has no sunset clause in contracts, provides certainty to buyers.

"This is paramount in the current market," Pezet says.

Drew Group has committed to providing the highest level of security inclusions — none more impressive than the Ubiquity Access Control System, a cutting-edge facial recognition technology that is one of the most state-of-the-art keyless entry systems on the market.

[smartcode_project:default project_id=108747 project_image_fid=190743]

One of the biggest drawcards to Lagoon has been the size of the apartments.

"It is unlikely that any future new development in Main Beach will be able to offer such spacious living at this price point," Drew says.

"Today's buyers are more discerning than ever, carefully evaluating amenities like gyms, spas, workspaces, and beach lockers, along with quality finishes. It's essential to provide something truly unique that sets a development apart, and we believe Lagoon has achieved just that."

Lagoon is set to complete construction in mid-2026.

[smartcode_project_cta:default project_id=108747]

Cara Waters

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