Aussie FIRE | Financial Independence Retire Early 39. Q&A: "Property vs shares, debt recycling, and the downsides of super"
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May 23, 2025 Hosts tackle listener questions about the balance of property investments versus shares, revealing insights into the intricacies of debt recycling. They discuss the implications of capital gains tax when selling assets, especially in uncertain geopolitical climates. The conversation highlights the need for a diversified investment strategy while cautioning against simplistic views on property returns. With a nod to the importance of personalized financial planning, they stress the relevance of mindful decision-making in navigating lifestyle inflation and retirement goals.
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Run The Numbers Before Debt Recycling
- Calculate the CGT hit before selling shares to debt recycle and compare it to ongoing tax savings from deductible interest.
- Use trackers or an accountant to model scenarios and decide if the upfront tax cost is worth the long-term benefit.
Avoid Wash Sale Traps
- Avoid obvious wash-sale setups when selling and rebuying assets for debt recycling to prevent ATO scrutiny.
- Differentiate holdings by time, ownership or asset type to show the sale wasn't solely for tax benefit.
Diversify Instead Of Predicting War
- Geopolitical events are unpredictable and can cause both market falls and later booms from government spending.
- The only reliable protection is diversification, not trying to time or foresee conflict outcomes.