Aussie FIRE | Financial Independence Retire Early 55. Financial advice we're not subscribing to - part 2
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Jan 2, 2026 In this engaging discussion, the hosts tackle the pressures around getting on the 'property ladder' and why many young people prefer renting over buying. They critique the notion of rent as 'dead money' and reveal potential annual savings from renting instead of owning. The debate delves into mortgage strategies, emphasizing the opportunity cost of extra payments. They also explore smart diversification, cautioning against complicating investment portfolios, and discuss when maxing out super contributions makes sense versus valuing liquidity.
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When Holding Costs Exceeded Rent
- Dave sold a Melbourne semi-detached investment and found rental yield so poor owners were effectively paying triple tenants' rent.
- He couldn't justify owning when annual holding costs far exceeded renting the same place.
Weigh Mortgage Paydown Against Investing
- Paying off a mortgage quickly provides emotional security but has opportunity cost versus investing in higher-return assets.
- If long-term investments likely outperform mortgage interest, investing instead can materially increase net wealth.
Treat Extra Mortgage Payments As Fee Reduction
- View paying extra to an offset as reducing a fee, not creating new wealth; your capital remains yours either way.
- Consider investing extra cash to own two assets (property and shares) while paying a predictable financing cost.