You need to do what you're comfortable with: there's folks here accumulating via US real-estate eg Arebelspy, and other extreme is Big Chris B a 30 something Aussie who last I heard had a NW 1mill ALL in shares. Doesn't even own his own home, too worried the bottom is going to fall out of RE. Way to risky for my liking, but there you go just goes to show.
What you do whilst accumulating, may need to be different once you've built your stash and wish to maintain it safely. But it may take some time to move from one strategy to the other, especially with RE, so begin with the end in mind.
I think your strategy is unnecessarily complex and inefficient in Mustachian terms, but if you want to be filthy rich as you get older so be it.
Heres how I see it - rough back of the envelope stuff :
It costs you 55k to live, plus your rather extraordinary childcare arrangement of22-26k.
If you had rental netting you 40k, you would only need to earn 15k plus childcare. If you wish to keep the current arrangement which would seem to have additional benefits to just being a childcare cost, then you only need to earn 40k. Once you are down in this income level you won't pay much tax, so you don't need to worry too much about "tax effective strategies".
If you both work another 19 years until you are 60, and salary sacrifice 25k each into super, at a measly 5% return, you would have 2.5mill, which would give you over 100k a year at a 4%SWR. Plus the real estate rental income. Beware though, whilst that 100k would be tax free now, I suspect in 20 years, the govt will want to tax you for such a magnificent result. Keep watching the super legislation every year.
So if you each earn 50 -60k gross between now and 60 you're set. If you want to retire before 60, then you need a stash to generate pre 60 year income. If you retire at 50, you'd need 400k, with no super sacrifice. So between now and age 50 save 40k a year..so you'd each need to earn another 20k plus tax...maybe 90k each.
Just running 2.8 mill debt at 5% interest through a NAB repayment calculator: interest on 2.8 mill over 5years is 610k approx. I chose 5 years because thats how long you plan on using it. I know some of it is a tax deduction, but you're earning and spending a lot to get it. That 5 years of "interest" is your stash : it could pay you 25k a year indefinitely (600k @ 4% SWR) if you had it invested.
So, inefficient, because you're wrecking yourself working, trying to hold up almost 3 million of debt, to create surplus money that you don't actually need if you are a Mustachian.
EDITED: I realised my math was slightly wrong...I should have said sal sacrifice up to the 25k concessional cap...you won't have to put the whole 25k in, since your employer will put part of it in for you under the super guarantee. So you won't need to earn as much to acheive this..
