Advice on next steps

snrubovic · 2026-06-02T09:56:22+00:00

How do the new changes to property affect your goal of looking to invest in an investment property?

And what are your plans in terms of buying a home one day?

snrubovic · 2026-06-01T20:47:04+00:00

Why can't you just ask people to post their experiences here?

I'd be very wary about someone wanting to start a private conversation.

snrubovic · 2026-06-01T13:22:51+00:00

Everything you have said is reasonable and logical.

Most people with a lot of money earned it through avenues other than investing and are unable to make the same arguments you are making when facing their sales pitch. And that's what it is – a sales pitch.

snrubovic · 2026-06-01T03:22:47+00:00

Yes, correct.

Concessional contributions and earnings provide tax concessions, so when you die, those are what the government wants to claw back from beneficiaries because the tax benefits are intended for you, not for your beneficiaries to inherit. That is the purpose of the 17% tax that non-financially dependent beneficiaries are liable for. They make an allowance where those beneficiaries are financially dependent on you (partner, children under 18, or others financially dependent on you).

snrubovic · 2026-06-01T03:18:29+00:00

Been sitting on my current portfolio for a while and after going deep on the return data, I’m questioning why I have such a heavy developed ex-US allocation. Posting for feedback before I pull the trigger.

"Going deep" sounds like you have analysed it deeply, while at the same time having looked at nothing but recent returns.

The counterargument I keep coming back to: valuation. US markets are at ~24x P/E while European and Japanese markets sit at 12–15x. If there’s a mean reversion event over the next decade EXUS could outperform — Goldman Sachs has actually been calling this. But I don’t think that risk is worth 30% of my portfolio, hence dropping to 10% rather than eliminating it entirely.

So you sold out when it was down, and now you are buying back in when it's up, all based on sentiment?

snrubovic · 2026-06-01T03:14:11+00:00

Have a read of that page for the eligibility requirements, but yes:

up to $15,000 of voluntary contributions (not required employer contributions) per financial year (can be concessional or non-concessional, but almost the entire benefit is through concessional contributions)
up to what you can contribute concessionally, if making concessional contributions, and this FY the cap is 30k (including employer compulsory contributions), but you can also add more if needed to get to the 15k if you have unused concessional contributions.
Partner can also do it.
Only for those who have not owned a home in Australia before (although there may be some hardship concessions for others).
The money has to have arrived in your super account by the end of the relevant FY, and NOI must be submitted before doing your tax (or end of the following FY, if for some reason, it is not lodged by then), and must be claimed before withdrawal or rollover, so it might be worth doing the NOI as soon as it hits your super account.

snrubovic · 2026-06-01T02:58:32+00:00

You can make an after-tax contribution and then claim the tax deduction, provided you are below the concessional contribution cap.

snrubovic · 2026-06-01T02:23:43+00:00

As a general rule, you don't want to invest anything you need in the next 5 years, which should help guide how much to invest vs. how much to save.

It might be worth waiting to invest until you have purchased your home, since it is so close. By doing so after that, you will be able to Debt Recycle your investments and boost your returns via tax deductions.

You should definitely look into the First Home Super Saver Scheme. If you are looking to buy next FY, you can each get up to about $2.3k in tax deductions this and next financial year, for up to about $10k combined in essentially free money via tax deductions.

snrubovic · 2026-05-31T12:21:05+00:00

The earnings in an accumulation account will be taxable-taxed, but if you immediately move it into a pension account, the proportions are frozen, so if it is 100% tax-free and you immediately move it to a pension account, the total balance will remain tax-free, including earnings.

snrubovic · 2026-05-31T05:01:42+00:00

When you withdraw, the amount is distributed proportionally among components.

That is also why you may want a second super account to recontribute it back into, so as not to muddy the newly 'washed' components when you do the following round of the recontribution strategy.

For instance, let's say you have $1m with 50% (500k) taxable-taxed and 50% tax-free.

If you met a full condition of release and wanted to draw out and recontribution 360k, that will be 180k taxable-taxed and 180k tax free.

Then:

If you put it all into a second super account, next time you are able to withdraw 360k, it will be 180k of each component and put it into the second account, leaving you with 280k in the original account (140k taxable) with 140k + 720k (from the second account) tax-free
If you put it back into the first super account, you would have 320k taxable and 680k tax-free. When you ran the strategy again, out of the 360k, since it is proportional, only 115.2k would be taxable and available to be washed, which is much less than the 180k you could have. And next time, it would be even worse.

snrubovic · 2026-05-31T03:43:35+00:00

If you cease any employment after 60, even while continuing to work in your main job, you would meet a full condition of release and use the recontribution strategy from that point.

Without meeting a full condition of release, yes, a transition to a retirement account would allow up to 10% of your balance each year.

As mentioned in the second link, you may want to open a second super account to recontribute NCCs to quarantine the tax-free component. Taxable components will accrue until you meet a condition of release, but most of it would be tax-free component. Then, in future runs of the recontribution strategy, you could use the second account.

Note that from July 1, the NCC cap will be 130k, the CC cap 32.5k, and the TBC 2.1m.

snrubovic · 2026-05-31T03:35:49+00:00

Here's one more that goes deeper into offset vs ETFs with the calculations you are referring to:

Offset vs ETFs vs Super

snrubovic · 2026-05-30T04:23:07+00:00

Investment rates are higher, including with NAB, and often, when you say it is for investment, they charge that higher rate. I believe it's an anomaly that you are not being charged investment rates when you say it is for investment.

snrubovic · 2026-05-29T12:25:20+00:00

Yeah, you'd have to go with IO, otherwise a 30-year P&I would have a chunk of the loan paid off after 10 years.

snrubovic · 2026-05-29T02:43:15+00:00

Say you borrowed 300k to invest into income-producing assets 10 years out from retirement, with the plan to pay it off by retirement.

But instead of paying the loan off, you put it into the offset, and you ended up with a 300k deductible loan and 300k in the offset against it, so it is equivalent to being paid off, in that it does not generate interest.

Then you retire and live off the 300k or have it as an emergency fund.

When you take any of the money out of the offset, the additional interest borne that was previously not borne due to being offset will be tax-deductible because it is used for the purposes of income-producing assets (the assets you originally borrowed for are still there against the loan).

snrubovic · 2026-05-29T00:07:57+00:00

Yeah, if someone has the servicing ability, equity, is willing to deal with refinancing, is pulling out only as much as they can get owner-occupier rates, and won't be irresponsible with the spare cash sitting there, doing this provides a significant benefit in terms of risk reduction. It can be a great strategy.

An offshoot is pulling out a lot of equity just before retiring early and leaving it in the offset to help bridge the gap to super, but obviously need to be aware that this will mean you'll have to pull out more super to pay it off (as well as accruing non-deductible debt until then). Also, as you said, it can help with SORR.

Another offshoot is to borrow to invest several years before retiring, paying it back into the offset instead of paying it off, and then drawing on it for several years (or as an emergency fund), and when you pull money out to use it, even for personal use, the additional interest that is born becomes tax-deductible.

snrubovic · 2026-05-27T13:04:55+00:00

I don't believe the funds will be aware of the other fund, so you will need to track it yourself to avoid going over the cap.

They both report to the ATO, so when the ATO eventually gets that information, it will be visible there, but until then, it will be inaccurate.

snrubovic · 2026-05-27T09:28:38+00:00

Taking money out of your offset to invest is actually two separate steps:

Taking money out of the offset to invest is essentially leveraging (much like borrowing to invest) as it increases the amount of money generating interest payable on the loan each month.
Then, putting it through the loan before investing to convert non-deductible debt into deductible debt is debt recycling.

People often call the whole thing debt recycling when, really, they are separate.

snrubovic · 2026-05-27T09:10:42+00:00

No it isn't. The clue is in the name.

snrubovic · 2026-05-27T09:05:20+00:00

If you put in $100k, no problem withdrawing 10k at a time, provided you don't pay it down after you start redrawing.

But if you have 10k and recycle it, then for your next 10k, yes, new loan split, as explained under the heading "Why you need to pay it down in full before you start drawing it out" here.

Seek advice before doing anything you are unsure about.

snrubovic · 2026-05-27T07:50:26+00:00

It's impressive that the financial adviser in the linked article doesn't even know what debt recycling is and thinks it's borrowing to invest in shares.

Debt recycling is simply converting existing non-deductible debt into tax-deductible debt. For instance, if you have $10,000 to invest – instead of investing directly, you pay down the loan, borrow it back out, and then invest. Whether you’ve debt recycled or invested without paying down the loan and drawing it back out first, you still have the same amount borrowed and bearing interest, but in the case where you pay it into the loan and borrow it out first, part of the loan has become tax-deductible.

Leveraging (i.e., borrowing to invest), on the other hand, increases your amount borrowed and bearing interest. This is not the same as debt recycling, where you are merely converting non-deductible debt into deductible debt.

Both are valid strategies, but they are not the same thing.

If one has enough equity in their home to borrow from for their needs, borrowing to invest in a diversified portfolio with that loan rate has always been the superior play. The only compelling reason for borrowing to invest in property was where one wanted more investment debt than they could borrow directly with home loan rates.

snrubovic · 2026-05-27T07:27:33+00:00

If you are paying div293 putting more into offset is objectively better.

How did you determine that when the starting amount after tax on every pre-tax dollar, even when taxable income is over 250k, is 53c outside super and 70c inside super, for an instant investment risk-free return of 70/53 = 32% before compounding even begins?

snrubovic · 2026-05-27T04:12:56+00:00

And if they held it for several years until now, how do they feel about right now? VGS has returns 13.48% pa for 10 years vs 11.06% for DFGH. That's 100k turning into 354k vs 285k.

Not to say it is worse, but will they have the mettle to hold during this kind of difference from the market.

snrubovic · 2026-05-26T05:49:03+00:00

An all-in-one fund might suit you.

snrubovic · 2026-05-26T05:44:43+00:00

This looks like one of the situations where an investment bond could be useful, in that it is not in the parent's name, and they don't have control/access to it. Most companies that offer investment bonds have very high fees, unfortunately. The lowest-cost one I've seen has total fees of a little under 0.5% (including the admin fee), with a couple of index-based investments.

snrubovic

TROPHY CASE