Replicates the RKDSundays "$40k deposit → $14.66M" structure, with the two assumptions that drive the whole result made adjustable.
Rows: property growth. Columns: share return. Outlined cell is your current setting. Grey cells are where recycling loses to the fair benchmark. Note how the losing boundary sits at the after-tax interest rate and barely moves with property growth — property growth scales both paths, so it changes the size of the prize but not whether the strategy works. Share return is the only variable that decides that.
Faithful to the article: 5% deposit, P&I loan over 30 years, owner-occupied for year 1, then rented. Each year equity above the LVR cap is drawn as a new interest-only split and invested in shares. Rental losses are quarantined and carried forward under the proposed rules; interest on the share splits is deducted against salary immediately. At the default settings it reproduces the article's $5.48M debt, $14.0M portfolio and $14.6M net wealth.
Not captured: volatility and sequence-of-returns risk — this is straight-line compounding, so the share line never falls while the interest bill keeps running. Lenders capping interest-only terms at 5 years at a time, which makes 30 unbroken years of I/O the single most fragile assumption. Serviceability re-testing at each top-up, assessed at a buffer rate above the actual rate. LMI, stamp duty, transaction and refinance costs. Vacancy, land tax, and major repairs. Legislative change over 30 years, including the carried-forward loss rules the whole thing leans on.
Two benchmarks, deliberately. The article's comparison is the paid-off property alone, which assumes that person invests nothing for 30 years — it flatters the strategy badly. The "fair benchmark" here gives the non-recycler the after-tax cost of the interest the recycler pays, invested unleveraged at the same share return. That is the comparison the break-even number is calculated against, and it is the one worth looking at.
Illustrative only. Not financial advice.