You don’t need to be a billionaire to benefit from a family trust. But you do need a reason.

I see plenty of people with a trust that does nothing. And plenty more who should have set one up years ago.

A family trust, or discretionary trust, is a structure that holds investments for your family. The trustee decides each year who receives the income. Here are the three reasons it can be worth it.

1. Flexible income across your family

On the 47% top rate, every dollar of investment income in your name loses almost half to tax.

A trust can distribute income to family members on lower tax rates. A partner who works part time. Adult children at university. In some cases, a company beneficiary taxed at a flat rate.

Each year the trustee can choose again, as your family’s incomes change.

The fine print

• Children under 18 pay penalty rates on most trust income, so it rarely helps to distribute to them
• The ATO is watching distributions to adult children closely. The money must genuinely benefit the person who receives it
• Your salary and RSUs can’t go through a trust. It is for investments you build, not your pay

2. Protecting what you build

Assets held in a trust are not owned by you personally. That can put them out of reach if something goes wrong in your own name.

For a senior exec, that might mean a claim against you as a director or officer. For others it is simply peace of mind.

Protection depends on the trust being set up and run properly. A trust deed from 15 years ago may need a review.

3. Passing wealth to the next generation

A trust doesn’t die. Control of the trust can pass to the next generation without selling assets or triggering capital gains tax.

Paired with a proper will, and sometimes a testamentary trust, it can be a clean way to look after your kids and grandkids.

I cover this in more detail in generational wealth management. A trust only works for succession if it’s set up alongside your will, your super nominations and the rest of your estate planning, with a solicitor drafting the legal documents.

A note on the 2027 CGT changes

Capital gains made by trusts have long received the 50% CGT discount. From 1 July 2027, that discount is replaced by CPI indexation and a 30% minimum tax on real gains, for trusts as well as individuals.

Gains made before July 2027 keep the old treatment. If you are planning a trust structure now, model it under both sets of rules.

When a family trust isn’t worth it

• You have no investments to put in it yet
• Everyone in the family is already on a high tax rate
• You plan to invest mainly through super
• You won’t keep the trust records and tax returns up to date

A trust costs money to set up and to run every year. It should save you more than it costs.

How I use trusts with clients

For many tech execs, a trust becomes useful after they start selling down RSUs or building a portfolio through debt recycling. That is when there is real investment income to share.

I work with your accountant on the setup, then build the trust into your overall plan. See my tax planning and wealth management services, or book a call below.

I’ve met people earning $700K a year who feel broke. And people on half that who are quietly building real wealth.

The difference is rarely the income. It’s what I call their financial thermostat.

What is a financial thermostat?

The idea comes from T. Harv Eker’s book, Secrets of the Millionaire Mind. A thermostat keeps a room at a set temperature. If it gets too hot, it cools it down. Too cold, it heats it up.

Your money works the same way. You have a level of wealth that feels “normal” to you. Earn more than that and you tend to spend it, give it away or take risks with it. Fall below it and you work hard to get back.

That’s why some people get a big pay rise and end up with the same savings. Their thermostat pulled them back.

Where your setting comes from

Most of it is set at home, long before your first pay cheque.

My dad drove a taxi. My mum was a schoolteacher. Money was a constant source of stress in our house. That shaped how I saw money for years, and it’s why I do what I do.

Your setting comes from what you saw growing up, what you were told about money, and your own wins and losses since.

Signs your thermostat is set too low

• Your income has doubled in 10 years, but your net worth hasn’t.
• Every bonus or RSU vest seems to disappear.
• You feel uncomfortable with debt of any kind, even debt that could build wealth.
• You avoid looking at your super or your investments.
• You’re waiting until you “feel ready” to make a plan.

5 ways to reset it

1. Write down the number

Pick the income you want in retirement and the age you want it. Most of my clients aim for $15K to $25K a month. Seeing a specific number moves the thermostat more than any amount of motivation. How much will you need? It’s also rule one of my 20 personal finance rules to live by.

2. Automate before you spend

Decide where every bonus, commission and vest goes before it arrives. That’s how cash flow management works in practice. Tax first, then the home loan, then super and investments. If the money never hits your everyday account, your thermostat can’t spend it. Watch how to manage your personal budget to see the account set up.

3. Spend time with people a level ahead

Your thermostat tends to match the people around you. Find people who are where you want to be, and learn how they think.

Early in my career as a stockbroker, I went to Warren Buffett’s AGM in Omaha three times. Hearing how he thinks about money changed how I think about it.

4. Learn from the mistakes, then move on

Everyone has a bad investment, a missed opportunity or a year they overspent. Look at what happened and what you’d do differently. Then let it go. Fear of repeating a mistake keeps a lot of people stuck.

5. Get a coach

Elite athletes have coaches. That’s the role I play as a Personal CFO. Most senior tech executives have one at work. Your money deserves the same.

A good adviser shows you what’s possible with real numbers, keeps you accountable and stops you from pulling yourself back down when things get uncomfortable.

What happens when you reset it

The same income starts building real wealth. Bonuses turn into assets. Debt becomes a tool instead of a fear. And for the first time, you can see the date you’ll be able to stop work.

One client told me it was the first time money felt like it was working for him, instead of against him. That’s the shift.

Who I do this for

My clients are tech executives and sales leaders, aged 40+, earning $400K+ with RSUs or big commissions. I’m a financial advisor in Sydney, and I also work with tech executives in Melbourne and Brisbane on Teams. Most have at least $500K in super and $1M of equity in their home, and can save at least $4,000 a month above their minimum mortgage repayments.

If that’s you and your wealth isn’t keeping up with your income, your thermostat might be the reason.

Most families don’t lose wealth because of bad investments. They lose it in the handover.

No plan for how it passes on. Super paid out with tax that could have been avoided. Kids who inherit money but never learned how to manage it.

Generational wealth is what you build that keeps working after you. Here’s how I help tech executives build it, and keep it in the family. This is general information only.

Start with your own retirement

It sounds backwards, but the best gift to your kids is a retirement you can fully fund yourself.

If you need their help later, or you have to sell assets early, there’s nothing left to pass on. So I always secure your retirement income first, usually $15K to $25K a month for my clients. How much money will you need to retire comfortably?

6 ways to build and protect generational wealth

1. Own assets that compound for decades

Wealth that passes between generations needs time. Quality shares and well located property have historically grown over the long term.

Using the rule of 72, an asset growing at 7% a year doubles about every 10 years. Over 30 years, that’s 8 times. That’s the power you’re passing on. I cover the bigger picture in wealth management strategies for high net worth Australians.

2. Plan the kids’ help on purpose

Most parents want to help their kids into their first home. Plan it, don’t wing it.

One tech VP I work with set aside $500K in today’s dollars as a home deposit for each child at 25. It’s built into his plan, alongside $25K a month for his own retirement. Read his case study.

Lending money to your kids, rather than gifting it, can also help protect it if their relationship breaks down. Get legal advice on how to document it.

3. Use a testamentary trust in your will

A testamentary trust is created by your will when you die, and setting one up is a standard part of estate planning. Your kids can control the assets without owning them personally.

It can help protect an inheritance from divorce, creditors and bad decisions. Income paid to grandchildren under 18 from a testamentary trust may also be taxed at adult rates, which can save a lot of tax.

4. Get your super nominations right

Super doesn’t automatically follow your will. Without a valid binding nomination, the trustee decides who gets it.

Also, super paid to adult children can be taxed at up to 17% on the taxable part. On a $2M balance, that can be a big bill. There are ways to reduce it, like a recontribution strategy after 60, so plan it early.

5. Consider a family trust for investments

A family trust can hold investments for the whole family. It gives flexibility over who is taxed on the income each year, and the trust can continue across generations.

It has set up and running costs, so it needs to suit your situation.

6. Teach the next generation

The biggest risk to generational wealth is a generation that doesn’t understand money.

Talk to your kids about how money works. Show them the plan when they’re old enough. Most of what we know about money we learned at home, good and bad. What is your financial thermostat set for?

The mistakes I see most

• No will, or a will that’s 10+ years old.
• Super nominations that lapsed or were never made.
• Everything in one company’s stock, with no plan to diversify.
• Big gifts to kids with no protection.
• No one in the family knows where anything is.

Who I do this for

My clients are tech executives and sales leaders, aged 40+, earning $400K+ with RSUs or big commissions. I’m a financial advisor in Sydney, and I also work with tech executives in Melbourne and Brisbane on Teams. Most have at least $500K in super and $1M of equity in their home, and can save at least $4,000 a month above their minimum mortgage repayments.

If that’s you, the plan for your kids should be part of your plan, not an afterthought.

Most high net worth people I meet in tech don’t have a wealth problem. They have a coordination problem.

An accountant who sees them once a year. A broker who set up the mortgage. A super fund on autopilot. RSUs vesting into a brokerage account. Nobody looking at the whole picture.

I call it a lazy balance sheet. Millions on paper. No tax deductions. No leverage. No structure turning it into income.

I’ve built more than 300 retirement plans over 18 years. Here are the 7 wealth management strategies I use most with tech executives worth $2M+. This is general information only.

1. One plan, one person running it

Your shares, super, property, tax and insurance all affect each other. Decide on one in isolation and you usually pay for it somewhere else.

I act as your personal CFO. I build one plan and project manage your accountant, broker and solicitor so everyone works from it. How the Personal CFO service works.

2. A cash flow system for lumpy pay

Base salary, commission, bonus and RSUs all land at different times. Without a system, the lumps disappear into lifestyle.

Every client gets a set rule for every lump: tax first, then the home loan, then super, then investments. Spending comes from base salary. Cash flow management.

3. Diversify out of your company’s stock

It’s common for tech executives to have 30% to 70% of their net worth in one company. My RSU advice starts with a plan to bring that down without one huge tax bill. That’s a big bet on one share price and one employer at the same time. Sale proceeds can then go into a diversified portfolio. Investment advice.

One VP came to me with $3.8M in company shares. We sold down $2M across several years to manage the tax, and spread the rest. Read his case study.

4. Put idle equity to work

A $3M home with no debt feels safe. But it earns nothing and gives you no deductions.

A separate investment loan against part of that equity, invested in a diversified portfolio, can generally make the interest tax deductible. Debt recycling does the same with an existing home loan. 7 powerful ways to use debt to build wealth.

5. Build super for both partners

Super is the most tax effective place to hold wealth in Australia. From 60, a super pension is generally tax free, and each person can move up to $2M into one.

So I build both partners’ super, using concessional caps, after tax contributions and contribution splitting. 7 strategies to reduce tax and build wealth.

6. Hold new investments in the right structure

At $2M+, it often makes sense to stop investing everything in your own name. A family trust can give flexibility over who is taxed on the income. A company can cap the tax on retained earnings.

Structures have costs and rules, so your accountant and I decide together whether they suit you.

7. Model retirement income, then track it

Wealth management isn’t about beating the market this year. It’s about knowing when you can stop work, and what it will pay, which is exactly what retirement income modelling shows.

I model your retirement income across several scenarios. Then I track your net worth each year, so you can see it growing toward the asset base you need.

Protect it

At this level, the biggest risks are often not markets. That’s why I review personal insurance and estate planning as part of every plan. They’re illness, divorce and a messy estate.

Review your insurance, your wills and your super nominations. A testamentary trust can help protect what passes to your kids. Generational wealth: how to build and protect family assets.

Who I do this for

My clients are tech executives and sales leaders, aged 40+, earning $400K+ with RSUs or big commissions. I’m a financial advisor in Sydney, and I also work with tech executives in Melbourne and Brisbane on Teams. Most have at least $500K in super and $1M of equity in their home, and can save at least $4,000 a month above their minimum mortgage repayments.

If that’s you, a coordinated plan is usually worth more than any single investment decision.

It’s the question I get asked most. “How much do I actually need to retire?”

Here’s the simple maths I use with clients. It gives you a real number in about a minute.

The short answer: about 20 times your yearly income

If your money earns a 5% income return in retirement, you need about 20 times the income you want each year.

• $100K a year ($8.3K a month): about $2M
• $150K a year ($12.5K a month): about $3M
• $200K a year ($16.7K a month): about $4M
• $300K a year ($25K a month): about $6M

These are rough guides, before any Age Pension, and not a forecast. Your number depends on your age, your spending and how your money is invested.

Most of my clients want $15K to $25K a month. That means somewhere between $3.6M and $6M, counting everything you own except your home.

Why 5%?

A diversified portfolio of shares, property and cash has historically earned more than 5% a year over the long term. Drawing about 5% gives you income now and room for your capital to keep growing with inflation.

It also lines up with super. From 65 to 74, the minimum you must draw from a super pension each year is 5% of the balance.

Draw much more than that in the early years and you risk running down your capital. Draw less and you may die with more than you needed.

Super does most of the work

From 60, income from a super pension is generally tax free. That’s why what you do with super in your 40s and 50s matters so much. Earnings on that pension are tax free too.

Each person can move up to the transfer balance cap into a tax free pension. It’s currently $2M per person. So a couple can have up to $4M working tax free in retirement.

That’s why I push clients to build both partners’ super, not just one. 7 strategies to reduce tax and build wealth.

Count everything, not just super

• Super for both of you
• Shares and ETFs outside super
• Vested company shares and RSUs
• Investment property
• Cash and offset balances

Don’t count your home, unless you plan to sell it and downsize. You still have to live somewhere.

What changes your number

• Retiring earlier means more years to fund, so you need more.
• A mortgage in retirement means you need more income.
• Travel, helping the kids and health costs are often higher in the first 10 years.
• Inflation means $200K today will need to be much more in 20 years.

How to close the gap in 10 years

If your number is $4M and you have $1.5M today, the gap can feel huge. Closing it is the core of the retirement planning I do with clients. It usually isn’t, if you have 10 years and a plan.

At 7% a year, money doubles in about 10 years. That’s the rule of 72. Add regular super contributions and the gap closes fast.

One client was 49 with $800K in super, combined with his partner. They put in $8,500 a month. 11 years later it’s $4M, enough for $200K a year, tax free. Read the case study.

The checklist I use is here: 7 financial things to do 10 years before retirement. Watch how one couple aims to retire in 10 years on $200K a year.

Who I do this for

My clients are tech executives and sales leaders, aged 40+, earning $400K+ with RSUs or big commissions. I’m a financial advisor in Sydney, and I also work with tech executives in Melbourne and Brisbane on Teams. Most have at least $500K in super and $1M of equity in their home, and can save at least $4,000 a month above their minimum mortgage repayments.

If that’s you, I can model your exact number and the date you can stop working. That’s what the Early Retirement Blueprint is for.

Your last 10 years of work are the most powerful years you’ll ever have with money.

You’re probably in your early 50s. Your income is at its peak. Your kids are getting older. And there’s still enough time for compounding to do serious work.

Here’s the maths. At 7% a year, money doubles in about 10 years. That’s the rule of 72: divide 72 by the return. So every dollar you invest at 50 could be two dollars at 60.

I’ve built more than 300 retirement plans over 18 years. The people who retire on $15K to $25K a month almost always use these 10 years well. Here are the 7 things I get every client to do. This is general information only.

1. Pick a number and a date

“Sometime in my 60s” isn’t a plan. Setting the number and the date is where pre-retirement planning starts. Pick the income you want and the age you want it.

Then work backwards. As a rough guide, at a 5% income return you need about 20 times the yearly income you want. $200K a year means about $4M. $300K a year means about $6M.

I model this across several scenarios: different retirement ages, returns and spending. You see exactly when you can stop, and what it pays. How much money will you need to retire comfortably?

2. Know exactly where you stand

List everything. Super for both of you. Shares, vested and unvested. Cash. Your home, and what you owe on it. What you actually spend each month.

Most tech executives have never seen it on one page. When they do, the gap, or the surplus, is usually a surprise. See what a full road map looks like.

3. Hammer your super

This is the biggest lever in your last 10 years, and where good superannuation advice pays for itself. Max out your $30K concessional cap every year. Then put spare cash and RSU proceeds into super as well, up to $120K a year of after tax money.

Earnings in super are taxed at 15% at most. From 60, a retirement pension from super is generally tax free.

One client was 49 with $800K in super, combined with his partner. They put in $8,500 a month. 11 years later it’s $4M, enough for $200K a year, tax free. Read the case study.

4. Make your home equity work

If you have $1M+ of equity in your home, it may be the laziest asset you own.

Debt recycling and a separate investment loan can put it to work, with the interest generally tax deductible. Using the rule of 72, $1M invested at around 7% could double in about 10 years.

Borrowing to invest adds risk, so it needs a stable income, a buffer and a long time frame. 7 powerful ways to use debt to build wealth.

5. Sell down your company stock

10 years out is when too much in one stock really hurts. An RSU sell down plan spreads the tax over several years. A 50% fall at 58 is very different to a 50% fall at 38.

Set a sell down plan around your vest dates, so it’s done on a schedule and not on gut feel. Spread sales across tax years. Use the proceeds for the home loan, super and a diversified portfolio.

6. Clear the home loan and know your spending

Aim to own your home outright by the day you retire. Knowing your spending starts with a simple cash flow system. Every dollar of home loan you carry into retirement has to be paid from after tax income.

At the same time, track what your lifestyle really costs. Most people underestimate it. Travel, kids and health costs tend to go up in the first years of retirement, not down.

7. Protect the plan

Review your insurance, your wills and your super nominations. A testamentary trust can help pass assets to your kids with protection.

Think about your home too. From 55, each of you may be able to put up to $300K into super from the sale of your home with a downsizer contribution.

What 10 years can do

Two people with the same income and the same assets at 50 can retire 10 years apart.

The difference is almost never the salary. It’s whether they had a plan for the bonus, the RSUs, the equity and the super, and stuck to it. That’s what retirement planning is for. See how the Early Retirement Blueprint works.

Who I do this for

My clients are tech executives and sales leaders, aged 40+, earning $400K+ with RSUs or big commissions. I’m a financial advisor in Sydney, and I also work with tech executives in Melbourne and Brisbane on Teams. Most have at least $500K in super and $1M of equity in their home, and can save at least $4,000 a month above their minimum mortgage repayments.

If that’s you and you’re within 10 years of retiring, now is the best time to start.

If you earn $400K+, every extra dollar you make is taxed at 47 cents. That’s the 45% top rate plus the 2% Medicare levy.

Your bonus. Your commission. Your RSUs when they vest. All taxed the same way.

I call it the high income earner wealth trap. You earn more every year, but the tax bill grows faster than your wealth.

I’ve built more than 300 retirement plans over 18 years. Most people I meet in tech are paying tens of thousands more tax than they need to. One Head of Sales cut his tax by more than $90K a year after 3 meetings.

Here are the 7 strategies I use most. This is general information only. Tax rules change, so get advice before you act.

Updated October 2026. You can still borrow to invest in ETFs, and the interest is still 100% tax deductible. What the 2026 Budget changed: From 1 July 2027, losses on established investment property bought after 12 May 2026 can no longer reduce the tax on your salary, and the 50% CGT discount is replaced with indexation and a 30% minimum tax on real gains. Shares and ETFs keep the existing negative gearing rules.

How tax works when you earn $400K+

• Income over $190K is taxed at 45%, plus the 2% Medicare levy.
• RSUs are generally taxed as income when they vest, at your marginal rate, even if you don’t sell.
• If you sell shares after holding them for 12 months or more, you generally get a 50% discount on the capital gain. From 1 July 2027, that discount is replaced with indexation for inflation and a 30% minimum tax on real gains. Gains made before then keep the 50% discount.
• If your income plus concessional super contributions is over $250K, you pay Division 293 tax: an extra 15% on those contributions.

Even with Division 293, super is still taxed at 30% on the way in, not 47%. That gap is where a lot of the savings sit. Prefer to watch? I cover similar ground in 7 proven strategies to cut tax and build wealth.

7 strategies to reduce tax and build wealth

1. Max out your concessional super contributions

The concessional cap is $30K a year, and it includes your employer’s contributions. Salary sacrifice the gap.

Every dollar you sacrifice is taxed at 15% (or 30% with Division 293) instead of 47%. On a $10K top up, that can save you $1,700 to $3,200 a year.

If your super balance was under $500K at the last 30 June, you may also be able to use unused caps from the past 5 years. That can mean a deduction of $100K+ in a big bonus year.

2. Put cash into super

You can generally put up to $120K a year of after tax money into super as a non concessional contribution. Depending on your balance, you may be able to put in up to $360K at once.

There’s no tax deduction on the way in. But earnings inside super are taxed at 15% at most, and a retirement pension from super is generally tax free from age 60.

One tech executive and his partner put $8,500 a month into super from 49. Their combined super grew from $800K to $4M in 11 years. At 60 he can draw $200K a year, tax free. Read the case study.

3. Turn your home loan into tax deductible debt

Your home loan interest isn’t deductible, so how your loans are split and structured matters from day one. Investment loan interest generally is.

Debt recycling swaps one for the other over time. You pay down the home loan, redraw the same amount through a separate split, and invest it. Your debt stays the same, but more of it becomes deductible each year.

One Head of Sales turned $700K of home loan into tax deductible debt and got $55K back. Read his case study, or see 7 powerful ways to use debt to build wealth.

2026 Budget update. This strategy was not affected by the Budget’s negative gearing changes. Those only apply to residential property. You can still borrow to invest in shares or ETFs, and the interest is still 100% tax deductible. If anything, the gap between borrowing for established property and borrowing for shares just got wider. What changed, in plain English.

4. Sell your RSUs on a plan, not on gut feel

This is the hidden tax trap in employee share schemes. I break it down in my video on how RSUs are taxed in Australia. You pay tax on the value at vest, even if you hold the shares. If the share price then falls, you’ve paid tax on money you no longer have.

I map every vest date and set a sell down schedule. Shares you want to keep are held for 12 months so any growth after vest may get the 50% CGT discount, or indexation for gains after 1 July 2027. Sales are spread across tax years, and losses are used to offset gains.

It also stops too much of your wealth sitting in one company’s stock.

5. Invest through the right structure

If everything is in your own name, every dollar of investment income is taxed at 47%. Getting the right tax structure in place before you invest is far easier than fixing it later.

A family investment trust can give you more flexibility. Income may be distributed to family members on lower tax rates, like a partner who earns less or adult children. Australian shares with franking credits can also reduce the tax on your income.

A trust has set up and running costs, and it isn’t right for everyone. Your accountant and I work out whether it suits you.

6. Bring deductions forward before 30 June

If you have an investment loan, you may be able to prepay up to 12 months of interest before 30 June and claim it in that tax year. It’s part of the end of financial year tax planning I run with clients and their accountants.

In a year with a big bonus or vest, that pulls a large deduction into the year you need it most. One client’s taxable income dropped by $117K with this and debt recycling together. He told me, “I used to hate June. Now I look forward to it.”

7. Use your partner’s super too

Contribution splitting lets you move up to 85% of your concessional contributions into your partner’s super each year. It evens out your balances, and it can help you both use your tax free pension limits in retirement.

If your partner earns under $40K, a contribution to their super may also give you a tax offset of up to $540.

The one thing I don’t do

I don’t buy a bad investment just for a tax deduction. Losing $1 to save 47 cents is still losing 53 cents.

Every strategy here has to build wealth first. The tax saving is the bonus.

The risks you need to know

• Tax and super rules change, sometimes every budget.
• Money in super is generally locked away until you retire after 60.
• Borrowing to invest magnifies gains and losses.
• Trusts and loan splits must be set up correctly, or deductions can be lost.

Who I do this for

My clients are tech executives and sales leaders, aged 40+, earning $400K+ with RSUs or big commissions. I’m a financial advisor in Sydney, and I also work with tech executives in Melbourne and Brisbane on Teams. Most have at least $500K in super and $1M of equity in their home, and can save at least $4,000 a month above their minimum mortgage repayments.

If that’s you, there’s a good chance you’re paying more tax than you need to.

Most people I meet in tech treat debt like the enemy. Pay off the mortgage. Then invest. Then retire.

It feels safe. But it’s slow, and it’s expensive.

Wealthy families do it differently. They use debt as a tool. They borrow to buy assets that grow, and they make the interest tax deductible.

I’ve built more than 300 retirement plans over 18 years. In most of the plans that reach $15K to $25K a month in retirement, good debt does a lot of the heavy lifting.

Here are the 7 ways I use it with clients. This is general information only. Your situation will be different, so get advice before you borrow.

Updated October 2026. You can still borrow to invest in ETFs, and the interest is still 100% tax deductible. What the 2026 Budget changed is property. From 1 July 2027, losses on established investment property bought after 12 May 2026 can no longer reduce the tax on your salary. Shares and ETFs keep the existing rules. Ways 4 and 5 below are updated, and there is a new section on what the Budget changed.

Good debt vs bad debt

Good debt buys an asset that can grow and earn income. The interest on it is generally tax deductible.

• An investment loan for shares or ETFs
• A loan for an investment property
• An investment split on your home loan

Bad debt buys something that won’t earn income. The interest is not deductible.

• Your home loan
• Car loans
• Credit cards you don’t clear each month

On a $400K salary you’re on the 47% tax rate. So every dollar of bad debt interest costs you almost two dollars of income before tax. That’s why the order matters.

How the rich use debt to get richer

The idea is simple. Borrow at around 6% to 7%. Invest in assets that have historically returned more than that over the long term. Claim the interest as a tax deduction.

On the top tax rate, almost half your interest generally comes back at tax time. So the real cost of the loan drops a lot.

Then time does the rest.

7 ways to use debt to build wealth

1. Clear expensive debt first

Credit cards at 20% and car loans at 9% are wealth killers. Pay them off, or roll them into your home loan at a lower rate.

The goal is one home loan and nothing else. Then you’re ready to start building good debt.

2. Run every dollar through an offset account

Pay your salary straight into an offset account linked to your home loan. It’s the backbone of the cash flow system I set up for clients. Every dollar sitting there saves interest at your home loan rate.

On a 6% loan, $100K in offset saves about $6,000 a year. And there’s no tax on it, because you’re saving interest, not earning it.

Spend on a credit card you clear in full each month. Your cash stays in the offset for longer.

3. Point every bonus and RSU vest at the home loan

Commission and RSUs come in lumps. A planned RSU sell down turns those lumps into steady debt reduction. Most people let them disappear into lifestyle.

I give clients a set plan for every lump: tax first, then the home loan, then super and investments. Vested RSUs get sold on a schedule, not on gut feel, and the cash goes into the offset.

That one habit can take years off a mortgage. It also cuts how much of your wealth sits in one company’s stock.

4. Turn your home loan into tax deductible debt

This is debt recycling, and it’s the main strategy I use. If you’d rather watch, here’s how debt recycling can fast track your mortgage, step by step.

You pay money off your home loan. Then you redraw the same amount through a separate investment split and invest it. Your total debt stays the same. But that part of it is now generally tax deductible.

Repeat it with every bonus, vest and surplus. Over time the bad debt shrinks and the good debt grows.

One Head of Sales I work with turned $700K of home loan into tax deductible debt. His taxable income dropped by $117K, and he got $55K back. Read his case study.

This was not affected by the 2026 Budget. For most of my clients, it now means recycling into shares or ETFs rather than established property. The interest is still 100% tax deductible against your salary, and the portfolio is easy to diversify and add to every month.

5. Borrow against your home equity to invest

If your home has a lot of equity, it may be sitting idle. As a mortgage broker as well as an adviser, I set up the equity loan and the investment strategy together. You can set up a separate investment loan against it and invest in a diversified portfolio.

Here’s an illustrative example. It’s not a forecast.

• Borrow $1M at 6.5%, interest only. The interest is $65K a year.
• On the 47% tax rate, around $30K comes back as a tax refund.
• So the net cost is about $35K a year to control a $1M portfolio.
• Assume a 10% average return over the long term. By the rule of 72, money doubles roughly every 7 years.
• $1M could grow to $2M in 7 years, and $4M in 14 years. Less the original $1M loan, that’s about $3M.

Markets don’t go up in a straight line. Some years will be negative. That’s why this only works with a long time frame and a cash buffer.

One tech VP I work with had a $5M home with no debt and $3.8M in company shares. A $1M investment loan was part of his plan. He’s now on track for $25K a month in retirement. Read his case study.

Since the 2026 Budget, which asset you borrow for matters more than ever. Borrow for an established investment property bought after 12 May 2026, and from 1 July 2027 any loss can only be used against property income. Borrow for shares or ETFs, and the interest is still 100% tax deductible. New builds are the exception on the property side.

Growth after 1 July 2027 will also be taxed under the new CGT rules, with indexation instead of the 50% discount. Factor that into any long term projection, including the one above. It’s why I stress test every plan with retirement income modelling before anyone borrows a dollar.

6. Keep your loans split and clean

The tax office looks at what the money was used for, not what it’s secured against.

So never mix private and investment spending in one loan. Use separate splits, and keep investment money in its own account. One mixed redraw can make the interest hard to claim.

I set this up with your broker and accountant from day one.

7. Prepay interest before 30 June

If you have an investment loan, you may be able to prepay up to 12 months of interest before 30 June and claim it in that tax year.

In a year with a big bonus or vest, that can pull a large deduction into the year you need it most.

One client told me, “I used to hate June. Now I look forward to it.”

What the 2026 Budget changed

The 2026 Budget did not change this. You can still borrow to invest in ETFs, and the interest is still 100% tax deductible against your salary.

Negative gearing on established property is ending. Negative gearing on shares and ETFs is not.

From 1 July 2027, losses on established residential property bought after 7:30pm on 12 May 2026 can only be used against residential property income. They can no longer reduce the tax on your salary. Any excess is carried forward.

Property you already owned on Budget night keeps the old rules until you sell. New builds can still be negatively geared. Shares, ETFs and commercial property stay under the existing rules.

The same law replaces the 50% CGT discount from 1 July 2027 with indexation for inflation and a 30% minimum tax on real gains. That one applies to shares too. Gains made before 1 July 2027 keep the 50% discount.

For a high earner using debt to build wealth, the takeaway is simple. You can still borrow to invest in shares and ETFs, and the interest is still 100% tax deductible, as long as the loan is used only for the investments. Borrowing for an established investment property now works very differently. More detail on my debt recycling page. If you’re weighing up property instead, see what it really costs to hold an investment property.

The risks you need to know

• Markets can fall, and you still owe the full loan.
• Interest rates can rise, which lifts your costs.
• Commission and RSUs can change, or stop if you change jobs.
• Borrowing magnifies gains and losses.
• Tax rules can change.

This suits people with a stable, high income, real equity, a cash buffer and at least 10 years to invest. It doesn’t suit everyone.

Who I do this for

My clients are tech executives and sales leaders, aged 40+, earning $400K+ with RSUs or big commissions. I’m a financial advisor in Sydney, and I also work with tech executives in Melbourne and Brisbane on Teams. Most have at least $500K in super and $1M of equity in their home, and can save at least $4,000 a month above their minimum mortgage repayments.

If that’s you, debt is probably the biggest lever you’re not using yet.

On the top tax rate, you lose 47 cents of every extra dollar you earn. Inside super, contributions are generally taxed at 15%, or 30% for high earners.

Then, once you retire after 60, the income can be tax free. No other structure comes close.

Here are the ten tips I give clients most often.

Contributions

1. Use your full concessional cap

Your concessional cap is $30K a year. For a stage by stage plan, see my super guide for your 40s and 50s. That includes your employer’s super guarantee, now 12% of your salary. On a big salary, your employer may already be close to the cap, so check before you salary sacrifice.

2. Catch up on unused cap

If your total super balance was under $500K on 30 June, you can use unused concessional cap from the past five years. My guide to catch-up contributions walks through how it works. It is a great way to cut tax in a year with a big bonus or vest.

3. Add after tax money

You can add up to $120K a year of after tax money, or $360K at once using the bring forward rule, if your balance is under the limits. RSU proceeds and bonuses are a common source.

4. Even up with your partner

Splitting contributions to a lower balance partner, or making spouse contributions, can double the amount you can later hold in tax free retirement accounts.

5. Know about Division 293

If your income plus concessional contributions is over $250K, you pay an extra 15% on those contributions. It’s worth building into your tax planning each year. Super is still worth it at 30%, compared with 47% outside.

Investments and fees

6. Pick an investment option on purpose

Many people are still in the default option they joined with 15 years ago. Your super deserves the same care as the rest of your investment portfolio. If retirement is 10 or more years away, a growth focused option may suit you better. Review it.

7. Check your fees

A fee difference of 0.5% a year sounds small. Over 20 years on a $1M balance, it can cost you hundreds of thousands of dollars.

8. Consolidate old funds

Tech careers mean lots of job changes. Multiple funds usually means multiple sets of fees and insurance premiums.

Protection and planning

9. Review the insurance inside your super

Default cover is often too low for a high earner, or doubled up across funds. See my guide to personal insurance advice.

10. Nominate your beneficiaries

Super doesn’t automatically follow your will, so a binding nomination is a key part of your estate planning. A valid binding nomination makes sure it goes where you intend.

Super is only half the plan

You can’t generally access super until 60. If you’re deciding between extra mortgage repayments and super, watch mortgage vs super: which should you pay first? If you want work to be optional earlier, you also need investments outside super. I explain how in how to retire early in Australia.

For a full review of your super, see my superannuation advice service or book a call below.

In your 20s and 30s, super mostly looks after itself. In your 40s and 50s, it needs a plan.

This is when your income peaks, your RSUs pile up and the finish line comes into view. The choices you make now matter more than at any other time.

Your 40s: build the engine

For most tech execs, the 40s are the biggest earning years. Kids, a big home loan and a busy job leave little time to think about super. That is exactly why it gets neglected.

What to focus on

• Use your full $30K concessional cap every year. On a high salary, check how much your employer already contributes first.
• Stay invested for growth. With 15 to 20 years to go, a conservative option can cost you far more than a bad year in markets.
• Consolidate old funds from previous jobs, so you pay one set of fees.
• Get your insurance right. This is when your family relies on your income the most.

Your 40s are also when to start building wealth outside super, so work can become optional before 60. Your home equity and RSUs are the usual starting point.

Your 50s: fill it up

In your 50s, the kids are often older and the home loan smaller. Many of my clients find they suddenly have spare cash flow. Super is where much of it should go.

What to focus on

• Catch up on unused concessional cap from the past five years, if your balance was under $500K on 30 June.
• Add after tax money. Up to $120K a year, or $360K at once using the bring forward rule, if you are eligible.
• Even up balances with your partner, so you can both use your tax free retirement accounts later.
• Plan your last 10 years of work. Pay off non deductible debt and decide when work becomes optional.

My checklist for this stage is in 7 financial things to do 10 years before retirement.

Getting ready for 60

For anyone now in their 40s or 50s, you can generally access your super once you retire after 60. From there, you can move up to $2M per person into a retirement income account, where earnings and payments are tax free.

That is why a couple in their 50s should think of super as a family asset, not two separate accounts. The last 5 to 10 years before you stop work is where pre-retirement planning makes the biggest difference.

Mistakes I see most often

• Leaving super in the default option for decades
• Ignoring it until five years before retirement
• Paying for insurance twice across old funds
• Having no binding beneficiary nomination
• Putting everything into super, with nothing to live on before 60

Should you have an SMSF?

A self managed super fund gives you more control, but also more cost and more work. For most of my clients, a low cost public fund with the right investment option does the job.

An SMSF can make sense with a large combined balance, or a specific strategy such as holding business premises. It is worth getting advice before you set one up.

Get a second opinion

If you are in your 40s or 50s and not sure your super is on track, that is normal. Most people never get it reviewed.

See my superannuation advice service, read my 10 super tips for high income earners, or book a call below.