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Have full cover while you’re young and it’s cheap, then cut it back as your assets grow. Income protection matters most, trauma the least.
In this episode I explain how we calculate life, TPD and income protection cover, and why the final step is weighing the premium against what that money could earn if you invested it instead. I also cover:
Why we always use stepped premiums rather than level premiums
Why life and TPD belong inside super and income protection outside it
Choosing waiting periods and policy definitions for income protection
When to review your cover, and why yearly reviews can lull you into keeping too much
The insurance calculator worksheet is free to download from the new resource site at investopoly.com.au.
00:00 Introduction and the new Investopoly resource site
 03:57 Insurance as a necessary evil
 04:58 Why most advice recommends too much cover
 05:55 The four types: life, TPD, income protection and trauma
 08:36 TPD insurance: own occupation vs any occupation
 10:22 The tension between paying for cover and investing
 11:19 Cutting cover back as your asset base grows
 13:34 How your insurance needs change across life stages
 15:21 Stepped vs level premiums
 18:21 How to calculate life and TPD cover
 20:42 Weighing affordability against cost
 22:33 How much income protection you need
 23:26 How premiums and benefits are taxed
 25:33 Where to hold life and TPD cover
 26:50 Income protection waiting periods
 27:55 Policy quality and the three-tier definition
 29:01 Why thorough underwriting is worth the hassle
 30:06 Trauma insurance: the most optional cover
 32:24 When to review your insurance
 34:34 Next week: bonds
Related episodes:
How much you need to retire (October 2026). Referenced at 00:18, and the cut-back-as-assets-grow argument relies on the same are-you-on-track thinking.
The super report episode (July 2026). Related because it covers choosing a super fund, and this episode covers which funds have competitively priced life and TPD cover inside super.
Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X
Run your own business? 
Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/
Our most popular free guides:
Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.
Download them here
Got a question for the podcast?
Email us at questions@investopoly.com.au
Subscribe to my weekly blog:
Stay connected here
Important
This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

An 8.4% return isn’t the problem; what drove it is. I’d struggle to justify active funds and a 0.76% fee over a diversified ETF.
In this listener Q&A, I explain how to judge short-term returns, why active fund outperformance rarely lasts, and why Jack probably doesn’t need to pay an adviser to run around $420,000 across super and his trust. I’d keep his family trust and gradually move his direct shares across when the price suits. I’d also keep his property as an investment under the six-year rule and switch the loan to interest-only. 
Max asks if he can wind down at 44 with about $5.4 million invested. Spending around $180,000 a year is roughly 3.3% of that, so the bigger job is putting his cash to work. Tom is retiring in his early 60s with property inside and outside his SMSF. I’d lean towards keeping the SMSF property for the pension phase, selling one or two personal properties, and investing for growth rather than income. Josh asks whether a family trust still makes sense after the budget and how fast to deploy $450,000 of borrowing capacity. My answer is still the trust, with a bucket company added later, and a steady monthly amount that steps up if markets fall.
00:35 Jack: Is 8.4% too low for a 28-year-old?
 02:43 Why active fund outperformance rarely persists
 03:38 What drove the return matters more than the number
 07:52 Why value-aware portfolios can lag early on
 08:50 Wrap platforms, EX20 and Australian shares at 28
 10:05 Do you need an adviser for $420,000?
 11:40 Shares in your own name and keeping the family trust
 12:59 Rent or buy? Using the six-year rule
 15:02 Switching the investment loan to interest-only
 15:34 Max: winding down at 44 with $5.4 million
 16:53 The missing number: how much you spend
 17:27 Earning 6.5% after tax, and trimming gold
 17:47 Putting $900,000 of cash to work
 19:10 Tom: moving from work into retirement
 20:47 Get as much as you can into super
 21:29 Why property needs a flexible exit plan
 22:27 Keeping SMSF property for pension phase
 23:23 Selling one or two properties and investing for growth
 24:19 Why I’d be careful with VHY
 25:52 Josh: family trust and bucket company after the budget
 27:37 The rollover election and the minimum 30% tax
 28:18 Lump sum vs drip-feeding $450,000
 30:00 Kids’ money: family trust over investment bonds
 30:57 Coming up: how much insurance you need
Related episodes:
 Ep 430: Is financial advice worth it? What rules can’t fix.
 https://investopoly.buzzsprout.com/2005600/episodes/19923707-ep-430-is-financial-advice-worth-it-what-rules-can-t-fix
Ep 427: How to assess whether property and share markets are attractively priced
 https://investopoly.buzzsprout.com/2005600/episodes/19832497-ep-427-how-to-assess-whether-property-and-share-markets-are-attractively-priced
Q&A - Untangling a messy structure, cutting losses, and low-income investing
 https://investopoly.buzzsprout.com/2005600/episodes/19720854-q-a-untangling-a-messy-structure-cutting-losses-and-low-income-investing
Ep 429: How much do you need to retire & are you on track? Work it out here.
 https://investopoly.buzzsprout.com/2005600/episodes/19893951-ep-429-how-much-do-you-need-to-retire-are-you-on-track-work-it-out-here
Q&A - Deploying an inheritance, selling an average property, and funding a long retirement
 https://investopoly.buzzsprout.com/2005600/episodes/19832494-q-a-deploying-an-inheritance-selling-an-average-property-and-funding-a-long-retirement
Ep 403: Lump sum share market investing: risky or rational
 https://investopoly.buzzsprout.com/2005600/episodes/18951456-ep-403-lump-sum-share-market-investing-risky-or-rational
Ep 425: Family trust investing: Are trusts still worth it under proposed tax changes?
 https://investopoly.buzzsprout.com/2005600/episodes/19764156-ep-425-family-trust-investing-are-trusts-still-worth-it-under-proposed-tax-changes
Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X
Run your own business? 
Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/
Our most popular free guides:
Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.
Download them here
Got a question for the podcast?
Email us at questions@investopoly.com.au
Subscribe to my weekly blog:
Stay connected here
Important
This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

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Russell says advice adds 5.5% a year and Vanguard says 3%. A disciplined, rules-based approach captures much of that, but not all of it. I think these reports overstate things by assuming that without an adviser you'll panic, chase returns and keep changing strategy. In this episode I split the mistakes the reports cite into two groups: the ones a rules-based framework prevents, like concentrated portfolios, cash drag and return chasing, and the ones it can't, like ownership structures, how to allocate surplus cash flow, and super contribution strategy. I also cover why knowing the rules isn't the same as following them, the March 2020 test of your own discipline, and the portfolio size at which advice pays for itself.
00:00 The "advisor fee: $0" bill that prompted this episode
 00:55 Revisiting episode 319 and the Russell and Vanguard reports
 01:51 Why I'm sceptical of these estimates
 02:31 What if you already follow a rules-based framework?
 03:23 Breaking down Russell's 5.5%
 04:53 Vanguard's Adviser's Alpha framework
 06:07 The wealth equation and where mistakes cost real money
 07:25 Separating the mistakes rules can and can't prevent
 07:46 Portfolio design mistakes a rules-based approach fixes
 10:20 Complexity and knowledge gaps rules can't fix
 12:34 When the numbers make advice worthwhile
 13:18 Why knowing what to do isn't enough
 16:15 The best days in the market and why indexing works
 17:48 The acid test: what did you do in March and April 2020?
 20:19 Economies of scale: when advice pays for itself
 22:12 Choosing an adviser as a decision that moves the dial
 22:59 Using someone you trust as a sounding board
 23:52 Summing up
 25:26 Next week: how much insurance you actually need
Related episodes:
Episode 319 (2024): my earlier look at the value of financial advice, focused on portfolio size and complexity. Referenced at 00:55 and again at 20:19.
Episode 414: the handful of life decisions that really move the dial. Referenced at 22:12.
Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X
Run your own business? 
Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/
Our most popular free guides:
Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.
Download them here
Got a question for the podcast?
Email us at questions@investopoly.com.au
Subscribe to my weekly blog:
Stay connected here
Important
This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

Selling your home needn’t undo debt recycling. I’d substitute the security with a term deposit or your next home to keep it deductible.
In this listener Q&A I walk Dave through substitution of security and simultaneous settlements, and explain why I’d pay a little more for a flexible lender. I then answer Marcus on whether to offset an investment loan or use a high-interest savings account. On the top marginal rate the offset usually wins, unless a low-income spouse changes the maths. I also cover why I wouldn’t pay investment debt down to zero. For Michael, I explain why you shouldn’t keep an average property just for the negative gearing, and how much leverage a 30-year-old actually needs. Dominic asks about moving assets out of a family trust ahead of the proposed 30% minimum tax, and my answer is still to do nothing yet. Nathan asks who benefits from quarantined negative gearing, and what the UK’s experience tells us about housing affordability.
00:00 Nathan: who benefits from quarantined negative gearing?
 01:19 Vested interests: new builds, commercial and offshore buyer’s agents
 03:00 Why commercial property yields don’t stack up
 04:34 Lessons from the UK’s property tax changes
 08:32 Tax settings only move affordability at the margin
 09:30 Dominic: moving assets out of a family trust
 10:01 Two minimum 30% taxes, and why to do nothing yet
 11:05 CGT rollover relief and the stamp duty problem
 11:53 Will the trust tax be rescinded before the 2028 election?
 13:49 What common-sense tax reform would look like
 15:13 Business as usual for your discretionary trust
 15:35 Michael: should I sell an average investment property?
 18:00 Don’t hold an asset just for negative gearing
 18:40 Property vs shares: the power of leverage
 21:19 Never a bad time to sell a bad asset
 23:07 Dave: debt recycling when you sell your home
 24:21 Substitution of security using a term deposit
 25:54 Simultaneous settlement from old home to new
 26:27 If the bank repays your loan by mistake
 27:16 Why lender flexibility beats a lower rate
 29:01 Revaluations and using lenders in the right order
 30:24 Marcus: offset an investment loan or use a savings account?
 31:16 Comparing before-tax and after-tax interest rates
 32:39 When a non-working spouse changes the answer
 34:14 Why not to pay investment debt down to zero
 35:47 Coming up: do you really need a financial adviser?
Related episodes:
 Q&A: Upgrade or rentvest, home equity loans, and going non-resident
 https://investopoly.buzzsprout.com/2005600/episodes/19862011-q-a-upgrade-or-rentvest-home-equity-loans-and-going-non-resident
Q&A - Choosing a pension account, topping up in retirement, and offset versus debt recycling
 https://investopoly.buzzsprout.com/2005600/episodes/19803896-q-a-choosing-a-pension-account-topping-up-in-retirement-and-offset-versus-debt-recycling
Q&A - Deploying an inheritance, selling an average property, and funding a long retirement
 https://investopoly.buzzsprout.com/2005600/episodes/19832494-q-a-deploying-an-inheritance-selling-an-average-property-and-funding-a-long-retirement
Q&A - Sequence of returns risk retiring early: bridging to super
 https://investopoly.buzzsprout.com/2005600/episodes/19885744-q-a-sequence-of-returns-risk-retiring-early-bridging-to-super
Ep 425: Family trust investing: Are trusts still worth it under proposed tax changes?
 https://investopoly.buzzsprout.com/2005600/episodes/19764156-ep-425-family-trust-investing-are-trusts-still-worth-it-under-proposed-tax-changes
Why common-sense tax reform is vital to Australia’s future
 https://investopoly.buzzsprout.com/2005600/14044773
Optional:
 Ep 426: The do not invest list: why good investors say no
 https://investopoly.buzzsprout.com/2005600/episodes/19748907-ep-426-the-do-not-invest-list-why-good-investors-say-no
Ep 423: Negative gearing deferred - here's how to manage the cash flow gap
 https://investopoly.buzzsprout.com/2005600/episodes/19680010-ep-423-negative-gearing-deferred-heres-how-to-manage-the-cash-flow-gap
Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X
Run your own business? 
Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/
Our most popular free guides:
Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.
Download them here
Got a question for the podcast?
Email us at questions@investopoly.com.au
Subscribe to my weekly blog:
Stay connected here
Important
This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.

Read Full Blog Here
To spend $120k a year from age 60, you need about $3m to never touch your capital, or $2.1m if you plan to run it down to zero by 90. Most super calculators can't tell you whether you're on track, because they ignore investments held outside super, especially geared property, and they don't handle retiring before 60. In this episode, I walk through a set of tables you can use to add up your super, ETFs, and investment property and see where you'll land. I also cover how to choose between a perpetual and a depleting portfolio, why $1 contributed to super grows to nearly $47 compared with $21 outside it, and what to do if you're well behind or well ahead of your target. The tables and worked examples are on the blog, linked above.
00:00 Introduction and podcast ratings update
 02:58 Why super calculators don't tell you if you're on track
 04:12 The numbers: $2.1m depleting vs $3m perpetual
 06:28 The early retirement problem: accessing super before 60
 07:45 The wealth equation and why time matters most
 08:07 Perpetual vs depleting portfolio: which to choose
 11:31 Return assumptions and sequencing risk
 12:30 Why life expectancy favours a perpetual portfolio
 14:16 Modelling assumptions: returns, inflation and tax
 17:14 Selling assets at retirement and the cost base assumption
 19:30 How to use the tables
 22:06 Investing inside vs outside super: $47 vs $21
 23:07 Table 7: retiring before 60
 24:58 Worked example: couple aged 40 with super and ETFs
 26:04 Worked example: geared property investors aged 35
 28:33 Table 8: spending more than $120,000 a year
 29:49 What to do if you're materially behind target
 32:19 What to do if you're materially ahead of target
 33:57 Caveats and limitations of the modelling
Related episodes:
Episode 402 (March 2026): on spending more today, or in the healthy years of retirement, once you're well on track. Stuart references this episode directly at 32:19.
The super report episode (July 2026): on choosing the right super fund. Stuart references this at 25:46.
Read Stuart's latest book? He's only got 19 reviews on Amazon so far, if Wealth by Design helped you, leaving one would mean a lot: https://www.amazon.com.au/review/create-review?asin=192318654X
Run your own business? 
Check out Business by Design, Stuart and Mena's show on starting, growing and exiting a business, at https://www.businessbydesignpodcast.com/
Our most popular free guides:
Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.
Download them here
Got a question for the podcast?
Email us at questions@investopoly.com.au
Subscribe to my weekly blog:
Stay connected here
Important
This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.