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
Got a question for the podcast?
Email us at questions@investopoly.com.au
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.
