In our latest Inside a Financial Plan episode, we unpacked how Rachel and Dion could be mortgage free in just four years - and financially independent by 52. This tailored plan balances lifestyle goals with long-term strategy, proving that with the right structure, financial freedom doesn’t have to wait until retirement.
Step one: A clear plan to pay off the mortgage
The first part of the couple’s strategy centres on becoming mortgage free. By selling down their Sharesies account and reallocating surplus cash flow, they’ll reduce their home loan balance faster. Their goal: pay off the mortgage within four years.
James explained that while investing in shares can offer higher returns, the guaranteed benefit of eliminating debt often delivers stronger long-term outcomes. “Even with average market returns of 10%, once you account for tax, fees, and inflation, paying off your mortgage still puts you ahead,” he said.
With disciplined budgeting through PocketSmith – and a surplus of around $3,100 each month – Rachel and Dion will use a revolving credit facility to “gamify” repayments and stay motivated as they track down that mortgage balance.
Step two: Setting up for long-term wealth
Once the mortgage is gone, the plan shifts focus to investment property and KiwiSaver.
The couple’s home equity and stable income create an opportunity to purchase a second investment property – likely a new-build townhouse – to generate future income and capital growth.
James highlighted the numbers: “If you buy a $700,000 property that grows 5% annually, that’s around $35,000 a year in capital gains for a $15,000 cash top-up. That’s over 100% return on your contribution.”
Their KiwiSaver funds will also be transferred to Pathfinder’s High Growth Fund, chosen for its strong track record and ethical investment focus. With regular contributions of 4% each, projections show combined KiwiSaver balances of around $1.4 million by age 65, alongside two investment properties and over $5.7 million in total assets – all while maintaining a $115,000 annual lifestyle.
Step three: The freedom to choose when to retire
The power of becoming mortgage free early is flexibility. By 2031, Dion could reduce his workload to 75%, then 50%, choosing projects that interest him rather than working out of necessity. Rachel can fully retire by 65 – or earlier if she wishes.
A “financially free by 52” scenario shows that even with private school fees, regular travel, and a comfortable lifestyle, the couple could stop working entirely by their early fifties. “It’s not about quitting work,” James said. “It’s about having options – and that’s what financial freedom really is.”
Key takeaways
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Selling down low-performing investments can fast-track debt repayment.
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A clear, structured budget is key to sustaining long-term wealth growth.
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Paying off your mortgage often outperforms share investing after tax and inflation.
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Property and KiwiSaver can combine to create lasting financial independence.
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True freedom isn’t just about retiring early – it’s about having the choice to.
Next steps
If you’d like to understand how your own numbers stack up – from becoming mortgage free faster to building long-term wealth – book a free 30-minute chat with Lighthouse Wealth team.
This series is proudly sponsored by PocketSmith, the smart budgeting software that helps you see your money clearly. With live bank feeds, automated categorisation, and powerful forecasting, PocketSmith gives you the full picture of where your money’s going – and where it could take you.
At Lighthouse Financial, we use PocketSmith with many of our clients because it connects your day-to-day spending to your long-term goals. Unlike a spreadsheet, it can’t be fudged – real data means real progress. Whether you’re managing a household budget or planning for financial freedom, PocketSmith helps turn your plan into action.
Try PocketSmith today and get 50 percent off your first two months.
If you’d like to learn more, check out these other episodes below.
For a no obligation discussion to see how we can help you on the path to wealth, please contact us.
Disclaimer:
The information in this article is general information only, is provided free of charge and does not constitute professional advice. We try to keep the information up to date. However, to the fullest extent permitted by law, we disclaim all warranties, express or implied, in relation to this article – including (without limitation) warranties as to accuracy, completeness and fitness for any particular purpose. Please seek independent advice before acting on any information in this article.
