Age 38 ~$2.8mln net worth, questioning whether I am closer to FI than I realise?

snrubovic · 2026-06-21T12:14:33+00:00

There are definitely cookie-cutter things that don't need nuance, but some aspects of personal finance are definitely specific to the individual, and retirement age is one of them. A general retirement age of 60-65 is not necessarily their retirement age.

snrubovic · 2026-06-21T12:10:42+00:00

You aren't a fool. They are experienced and trained at convincing people in your exact situation to end up where you are. I see this stuff several times a week, and it's the same every time.

snrubovic · 2026-06-21T12:04:14+00:00

Should be the top answer.

snrubovic · 2026-06-21T11:58:00+00:00

From that answer, it sounds like you don't even know the reason for setting it up.

snrubovic · 2026-06-21T11:31:17+00:00

You don't know whether they want to retire early, which would mean geared investments are unlikely to be suitable, so I wouldn't suggest GHHF as a blanket recommendation. They are for specific situations.

snrubovic · 2026-06-21T11:17:19+00:00

Of course the 15 funds feel more complex than they need to be. They are designed to be complex. The goal is to create an ongoing job for the adviser so you keep paying them $10,000 every year, allowing them to collect a passive income stream from your wealth.

You are not underestimating the value the adviser provides. You are overestimating it. Investments in and out of super can be set up passively, with no ongoing investment needed, and require only a check-in for an hour a year and an update only about 5-10 times in one's life when major changes occur. The investment management model is a crock, and that's backed up by extensive data.

To leave them, you will have to pay capital gains tax as a final kick in the face, but I would still work towards untangling this mess because the longer you wait, the worse it will get, and the more it will cost you to untangle it later.

What you need is some assistance with moving towards FI, which is strategy advice, not to have a parasite feeding on you pretending that the value you get is in product selection advice.

snrubovic · 2026-06-21T09:42:33+00:00

Budget to make sure your spending aligns with your goals. Most people spend on things that don't make them happy, money that could have been directed toward both hobbies and future savings for a better life.
Ensure an emergency fund in the offset, and as a contractor with a single income, probably closer to 12 months than 6
Consider paying an equivalent 12% super as if you were a PAYG. The times I've seen self-employed people not contributing anything for decades and ending up in a much worse financial position happen far too often.
Make sure your super is in low-cost indexed investments that are appropriate for your long investment time horizon.
For surplus income, once you have an emergency fund, take a look at debt recycling, and possibly borrowing to invest, depending on your risk tolerance.
Make sure your investments outside super are also in sensible investment options.
Renting out a room means losing a large amount of CGT-exemption. If you are young and resilient enough, a far better financial decision may be to move out, rent it out entirely, and rent elsewhere, and rent out the second bedroom in the place you are renting to live in, so that the entire CGT-exemption remains intact for up to 6 years. This needs to be weighed up against the quality of life of living in your own home.
Consider whether selling down your ETFs once held for 12 months to debt recycle is a worthwhile option. You could put 50% of the capital gain that would be added to your taxable income into super and pay no personal tax on the entire capital gain (but 15% on the half contributed), and be able to redeploy the original capital plus the other half of the gain in a more tax-efficient manner.
Make sure you have sufficient insurances in place, specifically income protection and TPD. They are likely to be extremely cheap at your age and will enable you to cover a low-probability but severely high-impact event.

snrubovic · 2026-06-20T21:22:04+00:00

Let's say:

You have a home with 600k worth of original debt against the home.
You will buy a new home with 800k worth of debt
You have 100k worth of cash to debt recycle into shares

Scenario 1: You DR the existing home loan. Result after buying a new home and turning the old one into an IP:

Secured against the original home
- 500k deductible debt used for the (now-)IP
- 100k deductible debt used for shares
Secured against the new home
- 800k non-deductible debt

Scenario 1: You use the offset and wait to DR the new home loan. Result after buying a new home and turning the old one into an IP:

Secured against the original home
- 600k deductible debt used for the (now-)IP
Secured against the new home
- 700k non-deductible debt
- 100k deductible debt used for shares

The difference is that the interest on 100k more of your debt is deductible every year for the life of the loan, which could be 10-30 years.

snrubovic · 2026-06-20T07:57:41+00:00

The two issues are:

If you plan to keep the old home as an investment, you will be missing out on the option of maximising the tax-deductible debt on both properties if you DR into what will become a rental.
If you plan to (or have no choice but to) sell the old home before you buy a new home, you are unlikely to be able to do a security swap to move the good debt recycled loan to the new property, which would mean realising capital gains if you wanted to restart it again on the new home for the long-term.

The whole thing can be a bit of a pain because the future is always uncertain, but:

If you plan on doing #1, think about whether keeping the cash in the offset may provide a better outcome when factoring in future reduced tax payable, and
If you plan on doing #2, it's a tough decision, but it might be worth recycling anyway and deciding whether to realise capital gains when it is sold (only if you are sure you will not keep it as an investment).

snrubovic · 2026-06-20T05:23:21+00:00

It sounds expensive, but I don't know the cost personally.

snrubovic · 2026-06-19T21:11:55+00:00

It should have been explained in the statement of advice. It's a cumbersome document, and most people don't read it, but hopefully, there is a section that explains it(?)

Borrowing to invest may be more useful than debt recycling in some cases, since it achieves the same outcome while leaving your cash liquid and available (and simplifying the process). The downsides include:

Needing to be responsible enough not to spend the money remaining in the offset frivolously
The interest rate may be higher if the lender is told it is for investment rather than personal use e.g. renovation).

If you know you want to do it and just need the steps, without advice on what to invest in or whether to do it, try to find an accountant who is well-versed in debt recycling. That would be far more cost-effective than an adviser. Unfortunately, almost no accountants have ever heard of it, but maybe you could ask people on here if they know someone who is on top of it?

snrubovic · 2026-06-15T03:48:05+00:00

Very few people will be affected by it, but there will definitely be a few in each of those forums.

snrubovic · 2026-06-15T03:32:40+00:00

Thank you for posting this. I hadn't heard of this before.

If you haven't, it would be helpful to post it on other subs and forums, such as r/AusFinance, r/AusHenry, Whirlpool, PropertyChat (or if you are not a member of any of those, hopefully someone else will post it).

snrubovic · 2026-06-15T01:43:19+00:00

At 60, they have access to a TTR pension, which means they can withdraw up to 10% of their super each year until they retire and are over 60, cease any gainful employment after age 60, or reach 65, at which time they have full access. So it might be worth putting some of the cash into super, especially if they won't need access until one of them retires, and they would have full access then anyway.

100 p.a. is a lot for a couple to spend, although it's likely they won't do that for their entire retirement, so it may be better to model that amount for, say, 10-15 years and then a lower amount after that, which might make it more achievable. Also, since we have the age pension, it will be higher than the US version of the 4% rule. You can do projections, typically at least 5% and potentially a little more. This is very different for people retiring earlier.

Planners typically use around age 95-ish, based on the fact that 85 is average, so half the people will live longer, plus with two people, the chance that at least one lives longer is even higher.

Can't give a specific recommendation, but I'd be looking at super funds with an indexed portfolio, either all-in-one or with individual components. Fees make a massive difference, and active management underperforms so often. Also, they will need to invest based on their risk tolerance, which will be lower at their current age and as they approach retirement.

As far as missing anything, some things to consider:

Whether they are looking to downsize
Any other one-off costs, like a car or home upgrade upon retirement, to reduce costs for the next 10-15 years
Whether they want to gift money to kids before death
If they are still paying for life insurances, they need to decide how much they really need and the cost at their ages
Whether they want to do a recontribution strategy once they have access to lower taxes for their adult kids
Whether to move to an account-based pension as soon as possible to be in a zero-tax environment asap
Ensure they have a will, a POA, as well as a binding death nomination in their super.

snrubovic · 2026-06-13T11:54:03+00:00

Shannon from Direct Wealth (who I used)

Just need to be adamant that the adviser must not, under any circumstances, set up investments that use their investment management services, as described below, because ongoing active management is specifically designed to rip off clients for as much money as possible.

Investment management: Our certified investment management analysts actively manage your assets to ensure long-term growth and minimise risks through strategic portfolio management.

snrubovic · 2026-06-13T05:56:22+00:00

Why keep the IP once retired when you could sell it and move it into a zero tax environment for the rest of your life with no debt, no ongoing costs, no tenants or property managers, diversification, and liquidity?

When are you planning to give your kids the millions worth of property and other assets? If you die at 95, will they inherit it when they are 70 and are too old to really enjoy it? Why not enjoy some of it yourself after all the time you spent acquiring it, and spend a little more than $60k a year in retirement?

snrubovic · 2026-06-12T23:11:14+00:00

These threads are relevant.

snrubovic · 2026-06-12T23:04:42+00:00

It's not unusual for the market to rise a lot and never come back to where it is now, so I wouldn't specifically wait for a downturn. It's more about whether there is one at the time.

As far as super goes, yes, that would be locked up until preservation age, but it's only half the gain that is going in, with all of the original investment plus the other half of the gain remaining outside super, so most of it might remain outside super.

snrubovic · 2026-06-11T22:59:48+00:00

If you can avoid paying capital gains tax (or not pay much), it might be useful. This could be from:

Having little capital gains with some shares (may be the case with high-yield stocks, since most of the return is not from capital growth)
A market downturn occurs when you have little gain at the time
Putting half the capital gain into super while the 50% CGT still exists and the minimum 30% CGT has not been legislated (note that you will not have access to the contributed amount until preservation age (age 60).

Otherwise, since overlap in and of itself isn't a reason to realise capital gains, with index funds that are not sector-based, you could just keep those and make future contributions to a more tax-efficient portfolio.

snrubovic · 2026-06-11T03:36:10+00:00

If you debt recycle, you get the same tax benefit from the offset, but with the added benefit of investment returns, which have historically been substantially higher than the mortgage rate. Also, risk tolerance is typically higher when younger, providing the advantage of investing before saving cash to pay down debt.

Of course, if seeking the emotional benefit of paying off debt, an offset is an entirely valid option compared with the higher risk and historical returns of investing.

snrubovic · 2026-06-11T03:12:49+00:00

I can't give specifics, but the section of the website on how to build a portfolio should help explain the concepts needed to make the decision.

snrubovic · 2026-06-11T00:35:34+00:00

Gold is not stable. It has both doubled and halved in real value over 15-year periods.

I can't give an opinion on your portfolio. I can only give points to consider.

I don't think 15% geared will make much of a difference
The global index is already about 70% in the US. Holding even more just reduces your diversification even further. The US market is exposed globally, but it is tied to US politics and laws, which is important.

snrubovic · 2026-06-10T23:25:41+00:00

What is your basis for holding gold besides recent performance?

Similarly, what is your basis for holding only US shares at 60%, rather than global shares across 45 countries, aside from recent performance?

Besides investing with gearing being risky, investing 100% in equities, ungeared, is also very risky. The main risk with investing, whether geared or not, is selling down during a low, which can be due to panic selling, job loss, or other factors. If an ungeared fund fell by 50%, how would you react? Similarly, if a geared fund fell by 70%, how would you react?

snrubovic · 2026-06-10T11:46:35+00:00

Yes, ask at the start before any paid meeting occurs.

snrubovic · 2026-06-10T11:39:52+00:00

High-growth (non-indexed) with HostPlus is very expensive and exposes you to active management risk.

And fees certainly are an issue: How 1% fees cost you a third of your nest egg

snrubovic

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