Where Leverage Helps and Harms

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Stuart opens with Wealth First Principles, explaining how real fortunes are built through three key inputs: a durable cash-flow surplus, investment efficiency (quality assets, low costs, smart tax structures, and few behavioral errors), and time (the compounding decade that does most of the work). He separates process from prediction, shows why speculation usually fails, and explains where leverage helps (sensible gearing on high-quality property with buffers) versus where it can harm (aggressive equity leverage). The mindset shift: ignore stories, automate saving, and let compounding do the heavy lifting.

Then he applies the framework to a detailed 10–15-year property plan: upgrading into an Adelaide family home later while renting it first, managing an existing regional PPOR, and deciding whether to sell or hold an inner-metro investment. Stuart stress-tests IO vs P&I for a decade, preserving deductible debt with offsets, optimal ownership splits for tax, and DTI/borrowing-capacity risks. He covers sequencing (buy vs renovate vs super), cash-flow resilience, buffers, and the realities of market timing in Adelaide. Practical guardrails include de-linking securities (avoiding cross-collateralization), structuring loans to maintain flexibility, and using evidence-based criteria to ensure each new asset is unequivocally investment-grade. The takeaway: anchor decisions to surplus, efficiency, and time, and design the debt so your future choices stay open.

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