Investopoly

I wouldn’t rush to repay an SMSF property loan before retirement. I’d switch it to interest-only and put spare cash into growth ETFs.

In this listener Q&A, Gary is 56 and plans to move his property wealth into his SMSF before he retires. I explain why growth ETFs beat income ETFs when unrealised gains disappear in the pension phase. I also explain why I’m wary of a Perth medical clinic on a 5.5% cap rate, and why you shouldn’t extrapolate one good commercial property result. Dominic is 55 with $1.2 million in offset and needs to self-fund until 60. I’d draw on the offset rather than sell property into this market, and plan a window to sell rather than a date. A retiree with about $8.75 million asks what withdrawal rate is reasonable. I cover a perpetual portfolio, three years of living expenses in cash, and what I’d do if the trust tax becomes law. Finally, Angus asks about contribution splitting to even up super balances under the transfer balance cap.

00:16 Gary: moving property wealth into super at 56
 03:18 Reading between the lines: the commercial warehouse story
 04:10 Episode 412: a 5.5% cap rate vs a 5.5% bond
 04:50 Why commercial property values could fall
 05:28 Don’t extrapolate one good result
 06:35 Why being 56 demands more diligence
 07:22 Quality first, then price: would I buy it?
 09:03 The Darwin property
 09:44 Buyer’s agents and selling what’s popular
 10:20 Don’t rush to repay the SMSF loan
 11:20 Growth vs income ETFs before pension phase
 12:23 Using the offset and getting money into super
 13:40 When to exit the medical property
 14:14 Dominic: self-funding five years until 60
 16:09 Is $1.2 million in offset working hard enough?
 17:08 Why I wouldn’t sell property into this market
 18:23 Which property to sell first
 19:15 Plan a selling window, not a date
 20:42 Retired at 60: what withdrawal rate is reasonable?
 22:36 A perpetual portfolio and roughly $300,000 a year
 23:46 Why going too conservative is a risk
 24:16 Three years of living expenses in cash
 25:50 The trust tax rules: don’t react yet
 26:40 If they become law: an investment company
 27:37 Angus: contribution splitting with your spouse
 28:15 When equalising balances matters: the transfer balance cap
 28:55 How contribution splitting works
 30:15 An indexed transfer balance cap
 30:50 An each-way bet: two different super funds
 31:46 How and when to split each year
 32:24 Coming up: why index investing works

Related episodes:
 Ep 412: Beware: Commercial property values look stretched
 https://investopoly.buzzsprout.com/2005600/episodes/19306940-ep-412-beware-commercial-property-values-look-stretched

Ep 409: Super contribution strategies to consider before 30 June 2026
 https://investopoly.buzzsprout.com/2005600/episodes/19170620-ep-409-super-contribution-strategies-to-consider-before-30-june-2026

Ep 419: The best super fund for 2026? You’re asking the wrong question
 https://investopoly.buzzsprout.com/2005600/episodes/19551766-ep-419-the-best-super-fund-for-2026-you-re-asking-the-wrong-question

Ep 429: How much do you need to retire & are you on track? Work it out here.
 https://investopoly.buzzsprout.com/2005600/episodes/19893951-ep-429-how-much-do-you-need-to-retire-are-you-on-track-work-it-out-here

Q&A - Sequence of returns risk retiring early: bridging to super
 https://investopoly.buzzsprout.com/2005600/episodes/19885744-q-a-sequence-of-returns-risk-retiring-early-bridging-to-super

Q&A - Bucket company asset allocation: trust or company?
 https://investopoly.buzzsprout.com/2005600/episodes/20011909-q-a-bucket-company-asset-allocation-trust-or-company

Ep 425: Family trust investing: Are trusts still worth it under proposed tax changes?
 https://investopoly.buzzsprout.com/2005600/episodes/19764156-ep-425-family-trust-investing-are-trusts-still-worth-it-under-proposed-tax-changes

Optional:
 Q&A - Moving wealth from property into super, planning in retirement, benefits of two separate super funds and so on
 https://investopoly.buzzsprout.com/2005600/episodes/16725766-q-a-moving-wealth-from-property-into-super-planning-in-retirement-benefits-of-two-separate-super-funds-and-so-on

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at [email protected]

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

Read Full Blog Here

I wouldn’t sell your Australian shares, but I’d put most new money into global shares. The ASX is concentrated, expensive, and slow-growing. The ASX 200 returned a solid 9.4% a year over the past decade, but that came mostly from banks and BHP, and the top 10 stocks now make up half the index. In this episode, I look at what’s likely to drive future returns: valuations, high dividend payout ratios, oligopolies, a 2% technology weighting, and weak per capita GDP and productivity growth. I also cover the case for keeping your existing Australian holdings, including franking credits, income, and population growth.

00:00 Introduction
 00:40 Not anti-Australia, just an investment view
 01:15 Past returns: the ASX vs global shares over 10 years
 02:48 The real question: where should new capital go?
 03:25 How concentrated the ASX 200 has become
 05:04 Valuation: ASX vs global shares
 05:40 CBA vs Alphabet: similar PE ratios, very different growth
 07:06 An economy built on digging and shipping
 08:40 High dividend payout ratios and the cost to growth
 09:47 Franking credits and the case for retaining profits
 11:04 Where’s the innovation?
 13:39 Oligopolies and the lack of competition
 14:34 The supermarket example
 16:04 Where shareholder returns actually come from
 17:07 Technology: 2% of the ASX vs 40% of the S&P 500
 18:41 The wealth equation and compounding growth
 19:16 Why Australia produces few large startups
 22:51 Summing up the observations
 23:10 GDP growth per capita: Australia vs the US
 24:46 Labour productivity
 26:54 The positives: reasons to keep Australian shares
 29:41 What to do: keep existing holdings, direct new money globally
 31:49 Next week: where share market returns come from

Related episodes:
 Ep 397: Australian vs International Shares: Why the 45:55 split does not add up
 https://investopoly.buzzsprout.com/2005600/episodes/18714304-ep-397-australian-vs-international-shares-why-the-45-55-split-does-not-add-up

Ep 432: Bond ETFs vs 10-Year government bonds: Lock in or not?
 https://investopoly.buzzsprout.com/2005600/episodes/20012238-ep-432-bond-etfs-vs-10-year-government-bonds-lock-in-or-not

Q&A - Bucket company asset allocation: trust or company?
 https://investopoly.buzzsprout.com/2005600/episodes/20011909-q-a-bucket-company-asset-allocation-trust-or-company

Optional:
 Ep 318: Why does Australia’s share market always underperform?
 https://investopoly.buzzsprout.com/2005600/episodes/15604297-ep-318-why-does-australia-s-share-market-always-underperform

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at [email protected]

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

Moving into a rentvested property no longer dilutes your CGT because of the 1 July 2027 deemed disposal. I’d keep one property CGT-free.

In this listener Q&A, I explain why Daniel’s plan to move into one of his rentvested properties won’t work under the new rules, and why every rentvester should protect at least one CGT-free home. Steve wants to sell his investment property to buy a $2 million home. If the original decision was sound, I’d stick with it, because the real risk is executing a sell-and-rebuy in a low-supply market. A 40-year-old asks whether to keep investing through a family trust or top up his wife’s super. I’d do both, and not react to the proposed trust tax yet. Dave asks about internally geared ETFs outside super, and I explain why I’d wait for a correction. Finally, a couple weighs a second investment property against debt recycling. Without an immediate interest deduction on new property, I’d debt recycle.

00:00 Intro and the Wealth by Design audiobook
 01:14 Steve: sell the investment property to buy a $2M home?
 03:27 Why I expect the property tax changes to be reversed
 05:00 The risk of selling in a low-supply market
 06:07 Being picky vs finicky: no property is perfect
 06:57 Execution risk if sentiment turns
 07:34 Stick with a good original decision
 09:08 Adding some regular share investing
 09:46 Daniel: moving into a rentvested property
 10:59 How the partial main residence exemption works
 11:39 Rented first vs occupied first
 12:44 Why the 1 July 2027 deemed disposal breaks the strategy
 14:01 A defensible market value on 1 July 2027
 14:21 The biggest downside of rentvesting
 14:36 Using the six-year rule
 15:35 Listener feedback: building wealth predictably
 17:44 Family trust ETFs or super contributions?
 18:53 Will you really work for another 20 years?
 19:31 Evening up super balances
 20:05 Why the trust tax proposal shouldn’t drive this decision
 21:00 ETFs outside super as a bridge to earlier retirement
 21:48 Rollover options and multi-class companies
 23:05 Don’t react yet
 23:54 Dave: geared ETFs outside super?
 24:14 Internal gearing vs an investment loan
 25:46 My own GEAR and GGUS trades
 26:57 Second investment property or debt recycling?
 28:50 Waiting years for an interest deduction on new property
 30:10 Why property growth rates have to ease
 31:02 Shares: a higher pre-tax return and an immediate deduction
 31:39 Debt recycling and getting the structure right
 32:48 When a bigger property budget changes the answer
 33:12 Coming up: has Australia become uninvestable?

Related episodes:
 Q&A: Upgrade or rentvest, home equity loans, and going non-resident
 https://investopoly.buzzsprout.com/2005600/episodes/19862011-q-a-upgrade-or-rentvest-home-equity-loans-and-going-non-resident

Q&A - ETF portfolio construction at 28: is 8.4% too low?
 https://investopoly.buzzsprout.com/2005600/episodes/19978320-q-a-etf-portfolio-construction-at-28-is-8-4-too-low

Q&A - Debt recycling when you sell your home: keep the deduction
 https://investopoly.buzzsprout.com/2005600/episodes/19934965-q-a-debt-recycling-when-you-sell-your-home-keep-the-deduction

Ep 423: Negative gearing deferred - here’s how to manage the cash flow gap
 https://investopoly.buzzsprout.com/2005600/episodes/19680010-ep-423-negative-gearing-deferred-heres-how-to-manage-the-cash-flow-gap

Ep 425: Family trust investing: Are trusts still worth it under proposed tax changes?
 https://investopoly.buzzsprout.com/2005600/episodes/19764156-ep-425-family-trust-investing-are-trusts-still-worth-it-under-proposed-tax-changes

Ep 429: How much do you need to retire & are you on track? Work it out here.
 https://investopoly.buzzsprout.com/2005600/episodes/19893951-ep-429-how-much-do-you-need-to-retire-are-you-on-track-work-it-out-here

Ep 411: Should you invest all your super into an internally geared ETF
 https://investopoly.buzzsprout.com/2005600/episodes/19251945-ep-411-should-you-invest-all-your-super-into-an-internally-geared-etf

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at [email protected]

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

Read Full Blog Here

10-year bonds near 5.2% look good, but I’d rather use subordinated debt ETFs. They pay about 1% more with almost no interest rate risk. A listener asked whether it’s time to lock in long-dated fixed-rate bonds now that yields are at their highest in about 15 years. In this episode, I explain duration and credit risk, why it’s hard to earn more than your starting yield, and how to measure the term premium properly. I then compare long-dated government bonds with subordinated debt ETFs such as SUBD and BSUB, and cover their risks: thin credit spreads and the money flowing in as bank hybrids wind down. I also explain the difference between running yield and yield to maturity, using the PIMCO global bond ETF (PGBF) the listener asked about.

00:00 Introduction
 00:39 Listener question: Is it time to lock in duration?
 01:31 What duration means
 02:51 Why interest rates have become harder to forecast
 04:35 10-year bonds at 5.2% vs a 4.6% cash rate
 06:25 Spoiler: why I’d look elsewhere
 06:47 Term premium explained using term deposits
 08:03 Duration risk
 10:02 Credit risk and credit spreads
 13:05 Why holding to maturity doesn’t remove the risk
 13:58 Why it’s hard to out-earn your starting yield
 15:32 How to measure the term premium properly
 17:50 Is today’s term premium above average?
 19:47 What’s changed: the options now open to investors
 20:59 Subordinated debt ETFs: BSUB and SUBD
 24:54 Subordinated debt vs government bonds: an extra 1% or more
 27:15 Why bank hybrids are being phased out
 28:36 The risks: thin credit spreads and contagion
 30:46 Moving up the credit scale: QPON and AGVT
 31:02 Do bonds still protect a share portfolio?
 32:24 Why we focus on absolute return
 32:40 PGBF: running yield vs yield to maturity
 34:41 Summing up

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at [email protected]

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

A bucket company doesn’t change my allocation: I’d still favour global shares. Rebalance with new money and dividends, not by selling.

Campbell here, filling in for Stuart. Simon has $2 million in a bucket company and too much in Australian shares. I explain why the new minimum 30% tax on capital gains levels the playing field for companies, why retained franking credits are so valuable, and how to reweight without paying unnecessary capital gains tax. Penguin Guy has an ETF portfolio in a family trust. I cover whether rollover relief lets him move it into personal names or a separate investment company, how company dividends end up taxed, and why investments should never sit inside your trading company. A 58-year-old listener asks when to accept that an investment thesis hasn’t played out, after nine years without growth on a South Yarra apartment. My answer is to hold, switch to interest-only and focus on super. Finally, Wayne asks about using carry-forward concessional contributions before his income passes $250,000. I cover spouse contribution splitting and why you must lodge a notice of intent.

If you run a business through a trust, Business by Design covers trading structures in more depth: https://www.businessbydesignpodcast.com/

00:00 Campbell fills in, and where the question queue is up to
 01:16 A South Yarra apartment with no growth in nine years
 03:15 When to accept an investment thesis hasn’t played out
 05:36 Melbourne’s flat cycle and why holding still makes sense
 06:39 Cash flow neutral: switch to interest-only and build super
 08:08 Simon: asset allocation inside a bucket company
 09:08 The CGT discount and the new minimum 30% tax
 10:36 Why a company can beat a trust on income tax
 11:18 Franking credits that build up in an investment company
 12:35 Australian vs global shares in a company
 14:11 Episode 397 and a higher international allocation
 15:17 Reweighting with new money: turn off dividend reinvestment
 17:15 Wayne: carry-forward contributions before Division 293
 17:54 How spouse contribution splitting works
 19:17 Why split: the $500,000 cap, transfer balance cap and age gaps
 21:48 The government co-contribution for a low-income spouse
 22:29 Do you need a notice of intent to claim?
 23:22 Which year’s unused cap gets used first
 24:11 Division 293 and the $250,000 threshold
 25:31 Penguin Guy: trusts under the proposed minimum tax
 26:44 Business trusts and the minimum 30% tax
 28:34 The flexibility you give up in a company
 29:44 Rollover relief for an investment trust
 30:38 Stamp duty, and what one state has said
 31:15 Can you roll over into your personal name?
 32:10 Selling inside a company and paying dividends
 33:49 When holding investments in your own name is fine
 35:04 Why investments shouldn’t sit in your trading company
 36:13 Wrap-up

Related episodes:
 Ep 397: Australian vs International Shares: Why the 45:55 split does not add up
 https://investopoly.buzzsprout.com/2005600/episodes/18714304-ep-397-australian-vs-international-shares-why-the-45-55-split-does-not-add-up

Ep 425: Family trust investing: Are trusts still worth it under proposed tax changes?
 https://investopoly.buzzsprout.com/2005600/episodes/19764156-ep-425-family-trust-investing-are-trusts-still-worth-it-under-proposed-tax-changes

Ep 422: Blame the 20-year growth cycle, not necessarily the Victorian government
 https://investopoly.buzzsprout.com/2005600/episodes/19642011-ep-422-blame-the-20-year-growth-cycle-not-necessarily-the-victorian-government

Q&A - Sequence of returns risk retiring early: bridging to super
 https://investopoly.buzzsprout.com/2005600/episodes/19885744-q-a-sequence-of-returns-risk-retiring-early-bridging-to-super

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at [email protected]

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

Read Full Blog Here

Have full cover while you’re young and it’s cheap, then cut it back as your assets grow. Income protection matters most, trauma the least.

In this episode I explain how we calculate life, TPD and income protection cover, and why the final step is weighing the premium against what that money could earn if you invested it instead. I also cover:

• Why we always use stepped premiums rather than level premiums
• Why life and TPD belong inside super and income protection outside it
• Choosing waiting periods and policy definitions for income protection
• When to review your cover, and why yearly reviews can lull you into keeping too much

The insurance calculator worksheet is free to download from the new resource site at investopoly.com.au.

00:00 Introduction and the new Investopoly resource site
 03:57 Insurance as a necessary evil
 04:58 Why most advice recommends too much cover
 05:55 The four types: life, TPD, income protection and trauma
 08:36 TPD insurance: own occupation vs any occupation
 10:22 The tension between paying for cover and investing
 11:19 Cutting cover back as your asset base grows
 13:34 How your insurance needs change across life stages
 15:21 Stepped vs level premiums
 18:21 How to calculate life and TPD cover
 20:42 Weighing affordability against cost
 22:33 How much income protection you need
 23:26 How premiums and benefits are taxed
 25:33 Where to hold life and TPD cover
 26:50 Income protection waiting periods
 27:55 Policy quality and the three-tier definition
 29:01 Why thorough underwriting is worth the hassle
 30:06 Trauma insurance: the most optional cover
 32:24 When to review your insurance
 34:34 Next week: bonds

Related episodes:

• How much you need to retire (October 2026). Referenced at 00:18, and the cut-back-as-assets-grow argument relies on the same are-you-on-track thinking.
• The super report episode (July 2026). Related because it covers choosing a super fund, and this episode covers which funds have competitively priced life and TPD cover inside super.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at [email protected]

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

An 8.4% return isn’t the problem; what drove it is. I’d struggle to justify active funds and a 0.76% fee over a diversified ETF.

In this listener Q&A, I explain how to judge short-term returns, why active fund outperformance rarely lasts, and why Jack probably doesn’t need to pay an adviser to run around $420,000 across super and his trust. I’d keep his family trust and gradually move his direct shares across when the price suits. I’d also keep his property as an investment under the six-year rule and switch the loan to interest-only. 

Max asks if he can wind down at 44 with about $5.4 million invested. Spending around $180,000 a year is roughly 3.3% of that, so the bigger job is putting his cash to work. Tom is retiring in his early 60s with property inside and outside his SMSF. I’d lean towards keeping the SMSF property for the pension phase, selling one or two personal properties, and investing for growth rather than income. Josh asks whether a family trust still makes sense after the budget and how fast to deploy $450,000 of borrowing capacity. My answer is still the trust, with a bucket company added later, and a steady monthly amount that steps up if markets fall.

00:35 Jack: Is 8.4% too low for a 28-year-old?
 02:43 Why active fund outperformance rarely persists
 03:38 What drove the return matters more than the number
 07:52 Why value-aware portfolios can lag early on
 08:50 Wrap platforms, EX20 and Australian shares at 28
 10:05 Do you need an adviser for $420,000?
 11:40 Shares in your own name and keeping the family trust
 12:59 Rent or buy? Using the six-year rule
 15:02 Switching the investment loan to interest-only
 15:34 Max: winding down at 44 with $5.4 million
 16:53 The missing number: how much you spend
 17:27 Earning 6.5% after tax, and trimming gold
 17:47 Putting $900,000 of cash to work
 19:10 Tom: moving from work into retirement
 20:47 Get as much as you can into super
 21:29 Why property needs a flexible exit plan
 22:27 Keeping SMSF property for pension phase
 23:23 Selling one or two properties and investing for growth
 24:19 Why I’d be careful with VHY
 25:52 Josh: family trust and bucket company after the budget
 27:37 The rollover election and the minimum 30% tax
 28:18 Lump sum vs drip-feeding $450,000
 30:00 Kids’ money: family trust over investment bonds
 30:57 Coming up: how much insurance you need

Related episodes:
 Ep 430: Is financial advice worth it? What rules can’t fix.
 https://investopoly.buzzsprout.com/2005600/episodes/19923707-ep-430-is-financial-advice-worth-it-what-rules-can-t-fix

Ep 427: How to assess whether property and share markets are attractively priced
 https://investopoly.buzzsprout.com/2005600/episodes/19832497-ep-427-how-to-assess-whether-property-and-share-markets-are-attractively-priced

Q&A - Untangling a messy structure, cutting losses, and low-income investing
 https://investopoly.buzzsprout.com/2005600/episodes/19720854-q-a-untangling-a-messy-structure-cutting-losses-and-low-income-investing

Ep 429: How much do you need to retire & are you on track? Work it out here.
 https://investopoly.buzzsprout.com/2005600/episodes/19893951-ep-429-how-much-do-you-need-to-retire-are-you-on-track-work-it-out-here

Q&A - Deploying an inheritance, selling an average property, and funding a long retirement
 https://investopoly.buzzsprout.com/2005600/episodes/19832494-q-a-deploying-an-inheritance-selling-an-average-property-and-funding-a-long-retirement

Ep 403: Lump sum share market investing: risky or rational
 https://investopoly.buzzsprout.com/2005600/episodes/18951456-ep-403-lump-sum-share-market-investing-risky-or-rational

Ep 425: Family trust investing: Are trusts still worth it under proposed tax changes?
 https://investopoly.buzzsprout.com/2005600/episodes/19764156-ep-425-family-trust-investing-are-trusts-still-worth-it-under-proposed-tax-changes

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

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Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

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Russell says advice adds 5.5% a year and Vanguard says 3%. A disciplined, rules-based approach captures much of that, but not all of it. I think these reports overstate things by assuming that without an adviser you'll panic, chase returns and keep changing strategy. In this episode I split the mistakes the reports cite into two groups: the ones a rules-based framework prevents, like concentrated portfolios, cash drag and return chasing, and the ones it can't, like ownership structures, how to allocate surplus cash flow, and super contribution strategy. I also cover why knowing the rules isn't the same as following them, the March 2020 test of your own discipline, and the portfolio size at which advice pays for itself.

00:00 The "advisor fee: $0" bill that prompted this episode
 00:55 Revisiting episode 319 and the Russell and Vanguard reports
 01:51 Why I'm sceptical of these estimates
 02:31 What if you already follow a rules-based framework?
 03:23 Breaking down Russell's 5.5%
 04:53 Vanguard's Adviser's Alpha framework
 06:07 The wealth equation and where mistakes cost real money
 07:25 Separating the mistakes rules can and can't prevent
 07:46 Portfolio design mistakes a rules-based approach fixes
 10:20 Complexity and knowledge gaps rules can't fix
 12:34 When the numbers make advice worthwhile
 13:18 Why knowing what to do isn't enough
 16:15 The best days in the market and why indexing works
 17:48 The acid test: what did you do in March and April 2020?
 20:19 Economies of scale: when advice pays for itself
 22:12 Choosing an adviser as a decision that moves the dial
 22:59 Using someone you trust as a sounding board
 23:52 Summing up
 25:26 Next week: how much insurance you actually need

Related episodes:

• Episode 319 (2024): my earlier look at the value of financial advice, focused on portfolio size and complexity. Referenced at 00:55 and again at 20:19.
• Episode 414: the handful of life decisions that really move the dial. Referenced at 22:12.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at [email protected]

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

Selling your home needn’t undo debt recycling. I’d substitute the security with a term deposit or your next home to keep it deductible.

In this listener Q&A I walk Dave through substitution of security and simultaneous settlements, and explain why I’d pay a little more for a flexible lender. I then answer Marcus on whether to offset an investment loan or use a high-interest savings account. On the top marginal rate the offset usually wins, unless a low-income spouse changes the maths. I also cover why I wouldn’t pay investment debt down to zero. For Michael, I explain why you shouldn’t keep an average property just for the negative gearing, and how much leverage a 30-year-old actually needs. Dominic asks about moving assets out of a family trust ahead of the proposed 30% minimum tax, and my answer is still to do nothing yet. Nathan asks who benefits from quarantined negative gearing, and what the UK’s experience tells us about housing affordability.

00:00 Nathan: who benefits from quarantined negative gearing?
 01:19 Vested interests: new builds, commercial and offshore buyer’s agents
 03:00 Why commercial property yields don’t stack up
 04:34 Lessons from the UK’s property tax changes
 08:32 Tax settings only move affordability at the margin
 09:30 Dominic: moving assets out of a family trust
 10:01 Two minimum 30% taxes, and why to do nothing yet
 11:05 CGT rollover relief and the stamp duty problem
 11:53 Will the trust tax be rescinded before the 2028 election?
 13:49 What common-sense tax reform would look like
 15:13 Business as usual for your discretionary trust
 15:35 Michael: should I sell an average investment property?
 18:00 Don’t hold an asset just for negative gearing
 18:40 Property vs shares: the power of leverage
 21:19 Never a bad time to sell a bad asset
 23:07 Dave: debt recycling when you sell your home
 24:21 Substitution of security using a term deposit
 25:54 Simultaneous settlement from old home to new
 26:27 If the bank repays your loan by mistake
 27:16 Why lender flexibility beats a lower rate
 29:01 Revaluations and using lenders in the right order
 30:24 Marcus: offset an investment loan or use a savings account?
 31:16 Comparing before-tax and after-tax interest rates
 32:39 When a non-working spouse changes the answer
 34:14 Why not to pay investment debt down to zero
 35:47 Coming up: do you really need a financial adviser?

Related episodes:
 Q&A: Upgrade or rentvest, home equity loans, and going non-resident
 https://investopoly.buzzsprout.com/2005600/episodes/19862011-q-a-upgrade-or-rentvest-home-equity-loans-and-going-non-resident

Q&A - Choosing a pension account, topping up in retirement, and offset versus debt recycling
 https://investopoly.buzzsprout.com/2005600/episodes/19803896-q-a-choosing-a-pension-account-topping-up-in-retirement-and-offset-versus-debt-recycling

Q&A - Deploying an inheritance, selling an average property, and funding a long retirement
 https://investopoly.buzzsprout.com/2005600/episodes/19832494-q-a-deploying-an-inheritance-selling-an-average-property-and-funding-a-long-retirement

Q&A - Sequence of returns risk retiring early: bridging to super
 https://investopoly.buzzsprout.com/2005600/episodes/19885744-q-a-sequence-of-returns-risk-retiring-early-bridging-to-super

Ep 425: Family trust investing: Are trusts still worth it under proposed tax changes?
 https://investopoly.buzzsprout.com/2005600/episodes/19764156-ep-425-family-trust-investing-are-trusts-still-worth-it-under-proposed-tax-changes

Why common-sense tax reform is vital to Australia’s future
 https://investopoly.buzzsprout.com/2005600/14044773

Optional:
 Ep 426: The do not invest list: why good investors say no
 https://investopoly.buzzsprout.com/2005600/episodes/19748907-ep-426-the-do-not-invest-list-why-good-investors-say-no

Ep 423: Negative gearing deferred - here's how to manage the cash flow gap
 https://investopoly.buzzsprout.com/2005600/episodes/19680010-ep-423-negative-gearing-deferred-heres-how-to-manage-the-cash-flow-gap

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at [email protected]

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

Read Full Blog Here

To spend $120k a year from age 60, you need about $3m to never touch your capital, or $2.1m if you plan to run it down to zero by 90. Most super calculators can't tell you whether you're on track, because they ignore investments held outside super, especially geared property, and they don't handle retiring before 60. In this episode, I walk through a set of tables you can use to add up your super, ETFs, and investment property and see where you'll land. I also cover how to choose between a perpetual and a depleting portfolio, why $1 contributed to super grows to nearly $47 compared with $21 outside it, and what to do if you're well behind or well ahead of your target. The tables and worked examples are on the blog, linked above.

00:00 Introduction and podcast ratings update
 02:58 Why super calculators don't tell you if you're on track
 04:12 The numbers: $2.1m depleting vs $3m perpetual
 06:28 The early retirement problem: accessing super before 60
 07:45 The wealth equation and why time matters most
 08:07 Perpetual vs depleting portfolio: which to choose
 11:31 Return assumptions and sequencing risk
 12:30 Why life expectancy favours a perpetual portfolio
 14:16 Modelling assumptions: returns, inflation and tax
 17:14 Selling assets at retirement and the cost base assumption
 19:30 How to use the tables
 22:06 Investing inside vs outside super: $47 vs $21
 23:07 Table 7: retiring before 60
 24:58 Worked example: couple aged 40 with super and ETFs
 26:04 Worked example: geared property investors aged 35
 28:33 Table 8: spending more than $120,000 a year
 29:49 What to do if you're materially behind target
 32:19 What to do if you're materially ahead of target
 33:57 Caveats and limitations of the modelling

Related episodes:

• Episode 402 (March 2026): on spending more today, or in the healthy years of retirement, once you're well on track. Stuart references this episode directly at 32:19.
• The super report episode (July 2026): on choosing the right super fund. Stuart references this at 25:46.

Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X

Run your own business? 

Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/

Our most popular free guides:

Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.

Download them here

Got a question for the podcast?

Email us at [email protected]

Subscribe to my weekly blog:

Stay connected here

Important

This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.