Be sure to have fun too

QI am 39, single, earning $145,000 working for a foreign company remotely (no super is deducted). I own my home, worth $500,000, outright. I have investment properties worth $475,000 and $360,000 against a loan of $648,000, with $407,000 in an offset account, $233,000 in super, shares worth $123,000 and $42,000 in Vanguard indexed funds. I have a $100,000 line of credit at 5.07%, owing zero.

I worry about maintaining my income and aim to have enough passive income to maintain a frugal lifestyle within two to three years. I save most of my income, and add $250 a month to Vanguard.

I have thought about ETFs but prefer the idea of using the line of credit to contribute more to my Vanguard funds each month. Will this help my goal? I would like to contribute enough to super to cover insurances/fees. Can I claim a tax deduction?

Wow, I am impressed, Sarah. You are killing it financially. With a fully owned home and about $1 million in investments I reckon you are already close to being able to quit work and live a frugal lifestyle. I do tend to fret about people’s definition of frugal, but in your case I see you are saving most of your income, so you are already living frugally.

I am not sure about your goal of stopping work in a few years, meaning you will be in your early 40s. You may have a personal passion or other factors driving you but I find it rare for a hardworking, successful person to step right away from work. That, however, is your choice.

In terms of your money, I do like the idea of you putting the maximum deductible amount of $25,000 a year into super. I presume you are taxed here, and on your salary you would be paying some 40% tax, including Medicare levy, on income above $80,000. Given the nature of your work, however, I want you to check this with your accountant or an adviser.

Using a very low-cost manager such as Vanguard with your money outside super is a perfectly sensible idea; you can get great global diversification at very low cost.

I do worry that you are over-saving. Do have some fun along the way!