Aussie Firebug

Financial Independence Retire Early

Ask Firebug Fridays 4

Nothing written below is financial advice. The below questions and answers are for general information only and should not be taken as constituting professional advice. You should always do your own research when making any financial decisions.


Dear Aussie Firebug,

I would like to get your thoughts on managed funds, and whether you think there could ever be a good actively managed funds out there? I know they can’t compete with the fees of index funds, but the appeal of an automatic savings plan might be tempting for some people. And some funds state they can outperform the index.

What do you think about Platinum Asset Management’s claim that 20k invested in 1995 would be worth 300k now? They have an impressive graph on the front page of their site, showing the fund far outperforming the MSCI all-world index over the long term ( A closer look at more recent performance shows it has failed to beat the index over the last few years, however.

Would you ever consider an actively managed fund or recommend them for certain people? Or do you think the average person is better off buying ETFs in 5k blocks? Thanks for all your wisdom so far, love the blog!

-Luke from Melbourne

Firebug’s Answer

Hi Luke,

You can get an equivalent of an automatic savings plan by signing up with a fund provider such as Vanguard and scheduling your BPAY payments into an account. But honestly, is it that hard to make a trade once a month?

Most managed funds say they can beat the index… but most don’t.

Over the last 15 years, 92.2% of large-cap funds underperformed a simple S&P 500 index fund. Or to put it another way, the odds of you beating the index is about 1 out of 20 when picking an actively managed equity mutual fund. This example is from a US study but the results are not much better domestically with around 67% of Aussie managed funds underperforming.

Platinum Asset Management fund has certainly had a decent return since inception. But let’s take a closer look.

If we look at their Platinum Capital Limited fund (ASX:PMC) for the last 5 years we get this


10.64% is certainly not a bad return. In fact, if we didn’t know any better, we might applaud the masterful investing by Platinum and be very happy we choose them to invest our money.

But luckily we are a bit more caution in the FIRE community. This is an international fund let’s remember. So how does it stack up against an international ETF I wonder 🤔?

Without knowing what inside this managed fund, I’ll pick an ETF that seeks to track a similar index (MSCI World) when comparing performance.  Let’s take
State Street Global Advisors international ETF WXOZ – SPDR S&P World Ex Australia Fund for the same time frame.



Oh… what’s this… a simple ETF that tracks an index with a management fee of 0.30% has outperformed an active managed fund by over 3%.

Hmmm… I wonder what sort of management fees Platinum charge for this subpar result. Let’s check their site

Managemnt fees


Brah… Are these dude really charing a performance bonus?…

And they are so lucky that VGS has not been around for 5 years to compare. Because that bad boy has a management fee of just 0.18% and would have beat both of them.

Point is, these funds are trying to beat the market and the statistic tells us that very few can successfully do it over the long term when fees are factored in. Maybe Platinum will beat it, maybe they won’t. What’s not to say that they rely internally on a few very talented people? What happens when they leave or move on? What happens if they start to get it wrong? A management change?

I understand that looking at their past performance can be tempting but I’m a big believer in not trying to beat the index and simply riding the ups and downs while paying a tiny management fee to do so.

I’m not a fan of actively managed funds but they can play there part (some LICs are technically active managed). It’s the large management fees that I don’t like.




Hi Firebug,

Thanks for your work. I wanted to ask about Trusts.

You’ve mentioned that you and Mrs. Firebug own your ETFs within a Trust structure.

Having spent some time reading, I understand the benefits of a Trust to be both asset protection (against personal liability, bankruptcy, etc) and tax efficiency (namely by income splitting). These sound great. I wondered if you could speak in generality from your own experience about the following:

* Costs.
* The practicalities of making contributions, and distributions.
* Having a non-spouse listed as a beneficiary.
* Any other complexities you’ve discovered since starting one.

Cheers for all of your effort for the community,



Firebug’s Answer

Hi Harry,

You’ve pretty much nailed the benefits of buying assets in a trust (asset protection and distribution for tax efficiencies).

Here are my current fees for my trust:

  • $1,700 once off cost back in 2014 to create the trust with a corporate trustee
  • $254 Asic company renewal costs (yearly)
  • $121 annual corporate review by professional account (yearly*)
  • $900 statutory reporting requirements including appropriate
    reconciliations and adjustments of general ledger and preparation of Financial
    Reports and Income Tax Return for Trust by an accountant (currently yearly*)

*The Asic renewal fee is something I will always have to pay but the other fees are avoidable once I feel comfortable doing them myself. I have gone through an accountant for the last couple of years to make sure everything is done correctly but the plan is to lodge my own returns once the portfolio is 100% shares.

So right now that’s a yearly cost of $1,275 to run my trust and lodge tax returns.

Loaning money to the trust is very straightforward and you just need to make sure you are good at record keeping.

I have not had to make a distribution yet as I have two negatively geared properties within the trust that offset the dividends inside. This was a mistake in hindsight to have the properties in there. My original plan was to have 5 fully paid off properties in the trust and distribute the rental income in the most tax efficient manner. But that strategy changed. The worst part is that I lose my franking credits while they are in there 😭😭😭. I have plans to sell them in the future so it’s not the end of the world but it was a mistake.

My partner is in the trust deed and the way it’s written means that basically all my family + extended family can be beneficiaries. They write it in a way from what I’m told that opens it up to almost everyone you would ever need to distribute to. But since I haven’t had to make a distribution yet I guess I won’t know until then.

When I first started learning about investing and setting up your structure in general, I was attracted to the trust structure because it was different and seem a bit of a mystery to most people. I thought you had to do things differently in order to get a different result, such as retiring early. I was really into reading about the different tax laws and the book ‘Trust Magic’ was like discovering a hidden treasure chest.

However! My thirst for all the tax loopholes and hidden efficiencies has really wanned in recent years and if I’m being honest, creating and investing in a trust is adding a layer of complexity that is really unnecessary for people wanting to achieve FIRE in Australia. Especially with our imputation credits (franking) system.

If I were to start again, I wouldn’t bother with it.

Now I’ve already invested considerable time and money into having my assets within the trust. So I’m going to ride it out and I should start to see tax efficiencies within the next few years. I’m lucky to have two retired parents who don’t rely on the pension who I can distribute to which should mean no tax on distributions until the trust starts to earn over $72,800 (4 people with distributions of $18,200).




Hi FB,

I have been reading a fair bit of your content and noticed you mention Mr Money Moustache a few times, so I checked his blog out too. You’re both entertaining writers and you have given me a better insight into a few things I was struggling with.

However, I do have two questions for you.

1) You show your Cash as a hefty 15% in your Net Worth. breakdowns (per July 2018), which I have of course read about emergency funds etc, but MMM says he only holds a few thousand as uninvested Cash. What is your reasoning behind this? Do you feel that your liquid assets would not be easily accessible enough if you needed cash quickly?

2) This may sound silly at first, but hear me out. Why do you count Super as a part of your Net Worth? As it’s inaccessible until 65+, and the idea is to achieve FIRE long before this, isn’t that more of a long game preservation move? Would it not be better invested in something you can access at your goal retirement age of say 45?



Firebug’s Answer

Hi Jess,

  1. I keep around 6 months living expenses of cash as an emergency fund plus around $5K per property for emergencies like repair work or tenancy vacancies. But yeah I did have a bit too much cash just sitting around. I actually have put in over $20K within the last couple of weeks. Part of me wants to hoard cash and wait for this tantalising GFC 2.0 crash that everyone keeps talking about… But as we have learnt time and time again, it’s very hard to time the market and this is not how I want to invest.Time in the market > Timing the market!

  3. Firstly I would like to clarify that Mrs. FB and I do not add any extra Super to our accounts through SS. What you see in our updates is simply what our employers have put in. If it were up to me, I’d invest everything outside Super because as you’ve mentioned, it’s not going to help me retire early. I did take it out for a few updates and had questions about it, so I put it back. It’s technically part of my net worth and I will use it at some point so it’s staying in for now.


AUG 2018 Net Worth $465,711 (+$10,871)

AUG 2018 Net Worth $465,711 (+$10,871)

Three big things to cover for August.

First off, we have a brand new edition to the portfolio!


I have essentially replaced our VAS ETF with the BetahShares A200. The only major difference between the two products in terms of what they are invested in is the A200 is the top 200 (in terms of market cap) companies listed on the ASX whereas VAS is the top 300. So VAS is more diversified which is a good thing, but the reason we made the move was because of management fees.

I’ve said it time and time again, management fees are not only extremely important. But they are something I as an investor can control how much I pay to an extent. So when BetaShares offers the A200 @ 0.07% which is half the costs of VAS (0.14%)…they have my attention.

I waited a little bit in hopes that Vanguard would respond by lowering their product, because I don’t want to add another holding to my portfolio unless I really have to, but after a few months I hadn’t seen any sign of them looking to lower it, so I pulled the trigger on the A200.

I not only benefit from investing in this ETF, I also want to reward BetaShares with my business after they have produced the lowest Australian index ETF in history! Moves like this create competition amongst the providers and are good for us as investors moving forward. We might think that our current ETFs and LICs have pretty low management fees. But in reality, the US market offers much more options with lower fees.


You might not think there’s much difference in paying 0.14% compared to 0.04% but it does add up over time with a decent sized portfolio.


The second announcement is the new segment I have created called ‘Ask Firebug Fridays‘. It’s a collection of Q&A’s from readers who have submitted their questions via the contact page. It’s something I should have created ages ago. I was spending so many hours responding to readers questions and was often answering the same questions over and over again, which reminds me that I need to create a FAQs about FIRE one day.

There would be days where I would sit down to pump out an article but never even got started because I spent an entire day responding to emails/comments/tweets. At least with #AFF, I can create more content for you guys to read/listen to every Friday to inspire you with FIRE related content 😊.


And last but not least, I have been sponsored by two awesome companies! SelfWealth and Relentless Hosting are now helping out with the costs of running this blog and I couldn’t be any happier that this little passion project I started over 3 years ago is starting to pull it’s own weight and earning me some money. Now if we were to judge this as an investment it would be…ah… how would I put it… horrendous.

At a very rough guess, I’d say I would have put in over 1,000 hours into this website with $0 financial gain and honestly, I never started this site with the goal to monetize it. I wanted an Australian FIRE community that I could discuss strategies and techniques with. And back in 2015, there were 0 Aussie FIRE sites that I could find, so I decided to make my own and it’s been one of the best decision I’ve made to date.

It’s not like I didn’t have paying offers for advertising either. But I didn’t want to affiliate myself with those companies and would have definitely felt like I ‘sold out’ if I accepted advertising money from credit card companies. I will only ever affiliate myself with companies/services I either use myself or believe in 100%.

I’m not sure how the sponsorships will go, but if I can continue to push a decent amount of traffic, it could be the start of a great partnership.


Net Worth Update

The markets were jumping in August! Over $4K for both the ETFs and Super.

I was holding a little bit too much cash and finally pulled the trigger on A200 with a $10K trade. Down a little on cash due to an expensive month (new car tyres 😤).

Closing in on the half a Mil…Will we get there by the end of the year…🤔? I’m gunning for it 😈



No changes in the properties this month.



Various data sources (RP data, etc.) are used in combination of what similar surrounding properties were sold for to calculate an estimate. This is an official Commonwealth bank estimate and one which they use to approve loans.



Brooooooo. VTS continues to DOMINATE.

It has had a total annualized return of 26.16% (or $14K of gains) since I first bought it in 2016 and has been my best performer by a mile. I almost want to sell it to lock in those gainz because surely it can’t go much higher. And if you look at the incredible bull run of the US…surely it’s gotta come down at a certain point. But timing the market is a suckers game so I will sit for now. If Australia tanks and the US didn’t, it would be tempting to sell VTS and clean up cheap Oz shares. But we’ll see.




Ask Firebug Fridays 3

Nothing written below is financial advice. The below questions and answers are for general information only and should not be taken as constituting professional advice. You should always do your own research when making any financial decisions.


I’m married with two children, aged 1 and 2 years old. What’s the best way to invest money for them to access when they are older? My friends suggested opening a bank account and depositing any cash the kids receive as birthday presents etc. What do you think?

Elle Bee


Firebug’s Answer

Hi Elle,

I love where your head’s at when your children are so young. Not only will you be giving them a financial head start in life, hopefully, they will realise the power of investing and compounding when they receive the gift many years from now. Or worst case scenario, they become Carlton supporters and you’re forced to cut all ties, at least the money would have grown for you over the years 😜.

You really need to make a decision on two things.

  1. What you’re going to invest in?
  2. Whos name it’s going to be held in?

You have a lot of choices when it comes to investing. You could keep the money in a high-interest savings account (HISA). But this is a very risk-averse asset class and not something I would do. You have years at your disposal with the beneficiary not having to rely on this money to survive. They might not even know it exists if you should choose not to tell them. This makes it easier to manage two things, risk tolerance (your kids don’t even know it’s there) and volatility (20 or so years should see a bust/boom or two).

With this in mind, I plan to invest in the Australian market via A200 (Betashares Australian index) for my kids. Switch DRP (dividend reinvestment plan) on and return in 18-21 years and marvel in the glory of compounding that has turned your children birthday money into a nice size deposit for a decent car or house (depending on how generous Nanna is with her birthday day money). The simplicity of the A200 with DRP on is an easy choice for me. If you’re into more diversification I would look at Vanguard’s VGS with DRP turned on.

I like this option because it requires no effort (other than a tax return) for the parents and it will beat the pants off a savings account, returns wise, over a 2 year period! Both the A200 and VGS don’t require rebalancing and with DRP switched on it couldn’t be any easier.

The other big question is to figure out whose name the investment is going to be held in. You can technically invest in a child’s name but it’s a muck around with the tax file number and setting up an account. And depending on how much income the assets are going to generate, it might not be the most tax efficient method.

If you already have a family trust set up, I would use that as the investment vehicle. Trusts cost money to set up and can be confusing though.

If you don’t have one already set up, I think the best way to do it is to open an account in the lowest income earner parents name and just keep a spreadsheet when you use gift money to purchase shares for your child. Even if you use the same account to buy shares for yourself, what you can do is keep a record of when you bought, what you bought and how many units you bought. You can then use a reporting tool such as Sharesight to create a dummy portfolio with those exact trades 20 years later and work out how much the initial investment has grown over time.

Then you can give them a big surprise when the times right!




Im 47 and I have been saving away since before FIRE was a term. My savings rate is about 50% losing 13% to interest on IP’s which is slowly coming down. Realistically Im about 5 years away from making the big change.

My issue is I am 99.5% in property I want to diversify but I am not sure how to do it and not sure of how to allocate my splits.

I am torn between Property, High-Interest accounts, Stocks (ETF,LICs etc) and even bonds. I don’t want to sell off property just work towards a better balance over the next 5+ years.



Firebug’s Answer

Hi Joe,

Nice savings rate!

Losing 13% interest form the IP’s you say? How much are you dipping into your pocket each year 😱? An asset should not be taking money from your wallet, it should be putting cash into it!

I’m feeling ya with the diversification mate. As someone who has three investment properties myself, it’s important to spread your risk across multiple asset classes and sectors.

If I were in your position, I would look at the cash flow of your property portfolio and how much the going market rate is for them. Would you make money selling now? How much?

It all depends on all your goals, but if you’re planning to build an income stream for yourself, negative gearing properties will not be the answer.

You don’t have to sell either. Nothing stopping you from dipping your toes into some ETFs or LICs to get a feel for the stock market.





Great podcasts and website. Loving the content.

In your “Our investment strategy explained” you mentioned the Peter Thornhill approach to investing and said this is something you might look into. This strategy of investing for dividends makes a lot of sense to me also but goes against the traditional diversification. I like the idea of reinvesting the dividends until FIRE and then simply living off them. No need to sell off capital growth.

Just wondering if you will actually consider switching to this approach? If you don’t think you will go this way, is it only because you have set up the way you have already? If you were starting out again would you consider it?


Firebug’s Answer

Hi Steven,

I have indeed modified my strategy to be more focused on dividends. I currently hold nearly $100K in international securities (VTS+VEU) and I think I’ll try to aim for 10% international with the other 90% Australian to maximize the strong yield + franking credits. I’m in the middle of writing a post about ETFs vs LICs which explains what I will be investing in to achieve this investing split.

The only issue with this is the whole diversification thing. I’m still on the fence on that one because there is just too much academically acclaimed studies that continually stress the importance of global diversification. I think it’s just a risk I’m willing to take at this point to get that desired income stream I’m after. I might change my mind on this moving forward as my mind is never set in stone and when I read something that is better than what I’m doing, I have no issues pursuing it. I did go from property > ETFs > ETFs/LICs after all 😜! Never be too proud to judge your own strategy and tweak it where you feel necessary.


Ask Firebug Fridays 2

Nothing written below is financial advice. The below questions and answers are for general information only and should not be taken as constituting professional advice. You should always do your own research when making any financial decisions.


Hi mate,

I’ve been following you for around 12 months now and love your work! I’m 35 and have focused all of my investing life into property and property development. I’ve done quite well however now with a young family I’m much more interested in index investing due to the ease and minimal time and effort needed to put in compared to property!

My question is regarding your choice on 3 ETFs (vas/a200, vts, vue) my plan is a200, vts and vue as well with pretty much the same weighting however recently I’ve heard a few people leaning towards just a200,vts stating that the majority of vts companies are large international companies anyway and vts obviously has the lowest fees and with only 2 ETFs there’s also less brokerage fees. Are there any reasons besides the extra diversity for the vue? Cheers firebug.



Firebug’s Answer

Hi Phil,

I’m glad you’re enjoying the blog.

There’s plenty of diversification between VAS/A200 and VTS alone with over 3,500 holdings across multiple sectors. VEU will add another 2,712 holdings and I personally invest in it to achieve that global diversification. Factoring in the low MER of 0.11% it makes sense to me but to answer your question, diversification is the main reason I invest in VEU.

I have recently changed my investment approach to focus on dividends though. I have close to $100K in international investments (VTS and VEU) and I’m focussing on Australian dividends for the next few years.
If you look at the returns for the three markets we’re talking about (Aussie, US, and world ex-US) you can see they all return pretty similar results over the past ~40 years



The above does not include dividends either.

I wouldn’t worry too much about the brokerage. Assuming you’re with SelfWealth you’ll only be paying a flat fee of $9.50 for each trade.

One last thing I’ll leave you with is if you’re looking into VTS, check out IVV. Same low MER of 0.04% but is domiciled in Australia and has a DRP option if that matters to you. The biggest difference between the two is the diversification and exposure to small-cap companies (IVV has around 500 holdings vs 3,654 for VTS)




Hi Mate,

Just came across your site and love it, it’ nice to see an Aussie who goes this in-depth with advice and I feel like I understand. I’m 21 and looking to get on the FIRE path (However I’ll buy shares before property). I thought you could give me advice on getting into the market. For ETF’s, is it worth investing the $5,000 and then making recurring payments of $100 or buying larger amounts over a longer period (i.e Once a year rather than monthly). Also, do you use the option of the dividend reinvestment plan?

One more question- When initially investing, should I invest in one of VAS or VTS and continually invest in it until I get growth in the ETF or should I buy $5,000 of one and when I get the funds, invest in the other than start making payments accordingly?

Regards, Josh.


Firebug’s Answer

Howdy Josh,

Great to see a young lad like yourself so interested in investing and escaping the rat race at 21.

Your question really boils down to you working out how much your brokerage is costing you as a percentage of each trade and judge for yourself if it’s worth it.

Let me explain.

If you’re trading at $9.50 and buy $5,000 dollars worth of ETFs, you have essentially lost 0.19% (9.5/5,000) percent of your initial capital through the brokerage cost. 0.19% to me is an acceptable amount. Hell people pay up to 2.5% plus marketing costs when they selling property. That’s a bit different I know but I wanted to make the comparison.

So if start to trade for $100. Suddenly our brokerage costs skyrocket to 9.5%!!! This is far too high.

If you can only save $100 a week I would suggest looking into opening an account with Vanguard directly because they offer the ability to BPAY for new units with no brokerage cost. The flipside is that your management fee will be slightly higher than the ETF equivalent. But we’re talking 0.14% vs 0.75%. Not 0.19% vs 9.5%.

I don’t have DRP switched on but I still use the dividends to purchase more shares. I get a psychological kick out of seeing the dividends hit my account.

Sorry, I can’t tell you what to invest in as that would be financial advice. That’s a decision you have to make yourself. Come up with a strategy you’re confident in and then implement it.

Hope that helps.




Hi firebug, thanks for your time.

  • My aims
    • Be able to retire early/decrease my hours significantly.
    • Possibly buy a house along the way,
  • My situation
    • Age: 25
    • Income: 90K annually. Job contract for 165K from next year.
    • Assets: 30K in vanguard high growth retail index, 10K in vanguard retail Australian shares index, 30K in a diversified actively managed fund. 16K in deposit/savings account, 16K super. No property. physical assets probably amount to <10K.
    • My expenses: Not very much. $180 per week to rent a room. Possibly up to $350 a week next year as I plan to upgrade. Total expenses a month excluding rent are probably about 1.5K a month
  • My plan thus far
    • Since beginning investing about 3 months ago my plan has been to invest 1K into vanguard high growth index per month and 1K into actively managed fund per month. Save the rest. Leave my money to grow for at least 8 years (then possibly put a down payment on a house).
  • Questions
    • Is it worth changing to a vanguard ETF given my investment plan?
    • Do you think I should invest everything I earn? I also plan to use some of my savings to invest if the market takes a dip since I don’t need that much of a safety net.
    • Any other thoughts about my situation?

Thanks for your thoughts.


Firebug’s Answer

Wow $165K contract at 25! That’s a lot of smashed avo on toast.

I LOVE that your first question is about potentially switching to ETFs. Because as I was reading your situation, that where my mind instantly went to. Right now you’re paying $315 bucks a year on management fees for the two Vanguard investments. I would love to know the management fee on the other one but let’s just work with what we know.

If you switched to the ETF equivalent, it would bring your management fee down to $95 a year.

Check this out.

Now a difference of $220 might not seem like a lot, but you should always compare things in percentages and not dollars. The retail funds are costing you 331% more compared to the ETFs in management fees. When you get to a serious sized portfolio of let’s say $500,000. The difference works out to be $2,750 a year 😳

Your expenses are very low which is the aim of the game. $1.5K plus rent is around what I was spending when I lived by myself. If we factor in your rent of $180, we arrive at around $2,280 a month. Which means 6 months of living expenses is just under $14K which you have in savings. I would not go below this if I were you just from an emergency fund point of view. That emergency fund should not be used to invest!

Allocating a big portion of your income to investing is obviously the quickest way to get to FIRE along with cutting your expenses. But don’t forget to enjoy yourself along the way. I was too serious about my savings in my earlier years and it’s really important to live a great life during your journey to FIRE. The path there is half the fun I’m told by people who have reached the end goal.

Other than that, you’re kicking goals dude! Keep it up 🙂




Hey Firebug,
Love the new segment!

My question would be – listening to some US pods they all speak about “flyer miles” being one of the Pillars of FI.

Do you do any yourself? I just did an easy westpac one that was free and got me 80k Qantas FF points. Even if you don’t fly this is worth around $400 at JBhifi.

Would be great to have a “watch team” out on these offers to share with the FI aus team. Or find a resource that tracks them.




Firebug’s Answer

Hi Joel,

I used to do this but can’t be bothered anymore. I don’t fly enough!

The US deals are WAY better than ours anyway. There is so much more credit card competition over there it’s insane. We recently had an ANZ CC because of the sign-up bonus and we would earn points throughout the year without doing much differently. There’s really no good reason not to have a point earning CC that you can accumulate points throughout the year I’ve just been lazy and haven’t bothered getting a new one.

Check out Points Hack website. It’s an Aussie site dedicated for finding these deals.


Ask Firebug Fridays 1

Nothing written below is financial advice. The below questions and answers are for general information only and should not be taken as constituting professional advice. You should always do your own research when making any financial decisions.

As the popularity of the FIRE movement in Australia continues to grow. More and more of my time is spent responding to readers who have submitted a question. What started out as a few questions a week has turned into a few questions a day, so I’m starting a new series called ‘Ask Firebug Fridays’ where I read out my responses to those questions.

There is some seriously good content within both the questions being asked and the response. Considering I spent 10+ hours a week responding, I thought it would be a cool idea to release some of that content. Especially when the same questions are being asked over and over.

So last week I added a disclaimer to my contact me page so I could publish the questions and my answers. I have removed personal information so that submitter stays anonymous.

Here are some of the questions you guys asked last week and my response.






Hi Mate,

I came across your blog during my research on how to adopt and implement the FIRE principle. I thought I might have been the only one on oz trying to adopt this methodology, a lot of it is US based. Also, have tried having awkward discussions with family and friends about this way of life and thinking when I mention retiring early I get the “look” followed by are you losing it.

I have found your blog to be a fantastic resource for laying down some good foundations, however, my struggle is I’ve had the light bulb moment a bit later than yourself I’m in my mid 30’s with 2 kids and already own a home. We have a saving rate of about 50% and we are smashing down the mortgage but I am worried while we are paying it down i’m missing out on lost time for compounding in index funds. I am trying to find a starting point and direction for investing or should I just be happy and pay down the mortgage, should I look at a couple of positively geared investment properties to speed up the pay down time? I do have a tax problem at the moment being in the highest tax bracket and have no deductions even with maxing out my salary sacrifice for super.

I only ask you for this guidance, because with all the material available and podcasts I have listened to, it always seems to give you a pathway from a starting point of zero, not if you’re thick like me and realised a bit later down the track having already committed to kids and mortgage.

Look forward to your reply



Firebug’s Answer

Hi Jake,

I’ve also had the look many times haha but that’s cool. I probably would have thought someone was crazy too if they had told me about it before I discovered FIRE.

You know what’s funny? I get a few questions from readers such as yourself who think they have missed the boat because they have only found out about this stuff in their 30’s. To be frank, taking an interest in your finances in your 30’s probably puts you ahead of 90% of Australians. It’s still SO YOUNG!

My first observation from your email was the big fat 50% savings rate 🤑🤑🤑! The single most important figure in anyone’s race to FIRE How accurate is this number? Do you track every transaction?

Assuming this accurate, you’re in very good shape.

Second point. You’re in the highest tax bracket you say? So you earn over $180K? Mate, you’ll be FIRE in no time if that’s true.

If you want to lower your taxable income without the hassles of an investment property, look into fully franked dividends. All Australian base companies distribute dividends with franking credits. Don’t fall into the trap of wanting to lower your taxes at the expense of negative gearing. It doesn’t make sense to spend $1 to save 45c. Looking into setting up a trust with a bucket company too. This can lower your taxes on your investments and have them held in a bucket company until you’re want to distribute in a lower income tax year for example.

Pay down your loan vs investing is a timeless debate and at the end of the day, it comes down the individual. You’re never going to lose paying down debt. But statistically speaking, investing should give you more post-tax income than the interest you would have saved paying down a mortgage. This one’s up to you mate, there’s no right answer.

Hope that helps,




Yo man I keep feeling like buying property, probably just because of societal pressure. I actually don’t want to own a house, but I’d do so if I thought it would be more advantageous than buying shares.
I buy (and hold) VTS, VEU and VAS. I rent a townhouse in Brisbane with my gf and my half if the rent is $140/week.
I notice you own property but I think you started investing in bricks and mortar before you found indexed etfs.
If you were at the start of your journey to FI (as I am now), would you still buy the property or just keep renting and buy shares instead?
Also relevant that I may retire overseas to a country with lower cost of living.

Anyway sorry for asking for this without much of a preamble, I actually really like your writing and that’s why I ask you. I don’t readily take advice from people because most people aren’t really very switched on.
Let me know any of your thoughts!



Firebug’s Answer

Hi Eduard,

You’re right. I bought my investment properties before discovering the ETF approach.

It’s funny because my properties have done a lot better than my shares…BUT! I will never know the true return until I sell them, so it’s hard to say.

If I were starting from scratch today I would just buy shares. Do I think shares are better than property? Not necessarily.

You need to be the right investor for real estate to work for you. I think there’s a market for people will to do physical work and improve their investment (something you can’t do with shares). But for 95% of the population, I think shares are better.

I just like watching the snowball grow and it throwing off money (dividends) each quarter. The mental side of investing is more important than the returns to an extent. Invest the way you feel comfortable as this will help you when it matters (through a bear market).

There’s no right answer here, educate yourself as much as possible until you reach a point where you can make a confident decision

Hope this helps 🙂




Looking at doing an EXCEL Spreadsheet myself for my ETFs.

In your video how to buy ETFs, how is your cash invested and total ETF worth so different, when your cash invested should always be more because we pay brokerage? And its like 5k difference, I don’t know how that’s possible. I’m surely missing something!

And keep up the vids mate.




Firebug’s Answer

Hi Matt,

That’s because the ETF’s grow over time, whereas the cash invested stays the same. At the very beginning when I buy, because of brokerage, I will alway have more cash invested then what the investment is worth. But over time that changes.

Does that make sense?




Hi, I’m 18 years old and recently began investing into ETFs. However, as I was researching I found it confusing to decide whether ETFs or your average managed index funds would be better in reaching FIRE. I know you personally go for ETFs but from research, managed index funds also seem viable. Basically, why do we pick ETFs over those index funds?

Thanks mate,



Firebug’s Answer

Hi Jeffrey,

I’m assuming you’re talking about the difference between an ETF and an equivalent managed fund product, sometimes from the same provider like Vanguard.

Check out this article I wrote a few years back on How to Buy ETFs. I briefly explain the differences there. But basically, it works out cheaper for me because I buy in bulk lots ($5K each month) and the management fees on ETFs are lower than the managed fund equivalent. Both are good products and the major factor between the two will be how often you’re buying because the brokerage fees will add up with ETFs if you’re buying every week or something.

Crunch the numbers and see what works out better for you.


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