Aussie Firebug

Financial Independence Retire Early

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.



Question (2:10)


Love the site and podcast!

Quick question around Trusts. My understanding, which may be wrong, is that the costs to set up and manage one, out way the benefits unless you have a sizeable portfolio ~$500k+.

I’m keen to buy some ETFs for the long term with a goal of having a portfolio in excess of $1.5mil however that likely won’t be for ~15years. With that in mind should I buy now under my own name, or set up the trust with the future in mind even if the costs outway the benefits during the early stages?

If tax bracket matters I’m in the 37c per $1 and also know the government are proposing changes to trusts and franking credits. How does that impact the decision?


Firebug’s Answer

Hi BillyBob,

I’m glad you’re enjoying the content mate 🙂

Trusts can technically save you money but as you’ve mentioned, they cost a bit to set up and manage.

I don’t think the Bill Shorten’s proposed trust tax reform will get through if I’m being honest. The simple reason is that the vast majority of the rich and powerful hold their assets in a trust and all the big political players up the top never change laws that would make them and their lobbyists poorer.

It’s never good to base your investing strategy around tax laws (as they are always changing), you always want to invest predominately in great companies first and foremost. The tax efficiencies are less important.

Having said that. What I’ve come to realise during my 5-6 years on the path to FIRE is the power of simplicity. Creating and running a trust creates a complexity.

Can it say your money…Yes.

Is it necessary?… Nope.



Question (11:12)


Love your work and the podcasts.

Like many of us, you started in property because of the high amount of leverage you can use. As your goals changed due to changes in lending and increased sharemarket knowledge you’ve mentioned divestment of your investment properties.

1. What is your strategy for the divestment and what do you have as key considerations for this?

2. If you had a PPOR and one property paid off and another 2 (duplex) well underway (7 years to go) would you simply stick with property as many of the entry costs have already been incurred?



Firebug’s Answer

Hi Seamus,

It’s true, I started with Australia’s favourite asset class. Good old, never fails, always goes up… bricks n mortar.

In a weird way, I’m almost glad I hit my landing wall so early in my journey. I may never have had to find an alternative path to financial freedom and ultimately discovered the sharemarket.

To answer your questions:

  1. The biggest consideration is that we don’t want to sell low or in a bad market. And right now is a terrible time to sell because nobody can get loans! We might be waiting many years before the banks loosen lending again but the two properties are cash flow positive so there’s no reason to rush.
  2. No I wouldn’t. Property can be a good wealth builder. But its cash flow is terrible compared to shares. It depends what you want and where you are in your journey. But if you’re closer to the end and want to start living off passive income, shares are superior to property IMO.




Question (18:30)

Hello AFB!

So Vanguard has a new ETF that has caught my eye… the VESG, apparently its ethically focused and doesn’t invest in stuff like weapons, tobacco and fossil fuel.

I have had concerns from time to time about investing in products that I would otherwise avoid buying as a consumer but I had put that one on the self an gone down the VTS/VEU route anyway.

Do ethics play into your investments strategies? How so? What do you think of the VESG as a core holding?

Happy Monday!

Thanks Kindly,


Firebug’s Answer

Hi Emma,

Ethically focussed investments are a relatively new product. I always thought of them as paying a premium to invest in something that aligns with your values. But they are actually picking up steam and more and more younger investors are prioritizing companies that are not related to fossil fuels, gambling, pornography, tobacco, animal testing for cosmetics etc.

Check out the rise of ethical investing in Australia


Source: Responsible Investment Association Australasia (

It’s not dissimilar to free range eggs. Consumers have proven with their wallets that they are willing to pay more for a product based on ethics.

Having said all that, ethical investing is not something that is at the forefront of my mind when I buy assets. But I must admit when I went down the rabbit hole and starting Googling ethical investing, I was pleasantly surprised with the overwhelming data that this is a growing area and maybe it’s something I should look at more seriously in the future.

VESG for a core holding isn’t too bad actually. It has over 1,500 holdings from all over the world (a bit heavy in the states at 61%) but it’s a lot more diversified with an acceptable management fee of just 0.18%. Not bad Vanguard, not bad at all.

It’s not quite hitting the mark for me just yet but if ethical investing is important to you, VESG looks to be a fine choice.


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