Financial Independence Retire Early
Sydney · A monthly journal
I'm Tran. Every month I put US$800 into a 2× Nasdaq-100 fund and US$800 into a 2× S&P 500 fund, following rules I wrote down before I started. Then I publish what happened, and what was going on in the markets that month. I'm not counting down to a retirement date and I have nothing to sell you. This is one experiment, running on money set aside for it.
The signal right now
Deploy this share of all available cash.
Nothing held yet.
Deploy this share of all available cash.
Nothing held yet.
Portfolio overview
Waiting on the first buy.
Waiting on the first buy.
Both funds plus both reserves.
Both reserves, waiting on the next dip and earning 4% a year meanwhile.
Return on money invested counts only what has been spent on shares, brokerage included. Return including the reserve counts every dollar contributed, with the cash still waiting for a dip. How the tiers work · Full history
The tax backdrop
The Treasury Laws Amendment (Tax Reform No. 1) Under reforms announced in the 2026–27 Federal Budget and now before Parliament, the 50% CGT discount is set to be replaced from 1 July 2027 with cost base indexation to CPI plus a minimum 30% tax rate on real gains, for individuals, trusts and partnerships, and applying to shares and units in trusts, not only property. The measure is not yet law, and details may change before it passes.
Gains accruing to 30 June 2027
Hold longer than twelve months, halve the nominal gain, pay your marginal rate on what remains. The rule Australians have planned around since 1999.
Gains accruing from 1 July 2027
Index the cost base to inflation, then pay your marginal rate on the real gain, with a minimum of 30%. Inflation is shielded. Everything above it is not.
Only the inflation portion of a gain is shielded. The better your real return, the smaller the share of it that's protected, so the assets most exposed to this reform are the high-growth ones.
Low-income years no longer produce low-tax realisations. Selling down slowly at a low marginal rate in early retirement is a much weaker lever than it was.
With no discount waiting at the end, when you realise a gain is one of the few levers left, and holding rather than trading is worth more than it used to be.
Concessional rates inside super are relatively more attractive now. But super is locked until preservation age, which is the opposite of retiring early. That tension just got sharper.
The family of funds
Leveraged ETFs come in a small family. They all aim for a multiple of one index's daily move, and they are cheap to hold by the standards of anything geared. Here are the four people mention most, with what they track, what they cost, how big they are and how they have actually done.
| Fund | Tracks | Fee | Started | Size | 1 yeartotal | 5 yearsa year | Since starta year |
|---|---|---|---|---|---|---|---|
| TQQQ | Nasdaq-1003× daily | 0.86% | Feb 2010 | $33b | — | — | — |
| QLD | Nasdaq-1002× daily | 0.95% | Jun 2006 | $13b | — | — | — |
| UPRO | S&P 5003× daily | 0.91% | Jun 2009 | $4b | — | — | — |
| SSO | S&P 5002× daily | 0.90% | Jun 2006 | $8b | — | — | — |
All four come from the same place. ProShares, based in Bethesda, Maryland, has run leveraged and inverse funds since 2006 and now lists 168 ETFs holding about $121 billion, which makes it the thirteenth largest ETF provider in the United States. TQQQ is its biggest single fund and the largest leveraged ETF in the world. None of these funds hold the shares in the index directly. They hold swap contracts written by a dozen investment banks, which is how a fund the size of TQQQ can promise three times a daily move without owning three times the stock.
Where that fee actually goes
Nobody sends you a bill for it. An ETF takes its management fee out of its own assets, a little every day, which lowers the fund's net asset value. The market price follows that value. So the 0.86% is not charged to you on top of the price, it is charged inside it.
Put plainly: when a fund shows $66.00, that $66.00 is already after the fee. If the fund had charged nothing, the price would have been slightly higher.
That is why this site never subtracts the management fee from the portfolio value. Doing so would count it twice, and the number on the Progress page would stop matching a broker statement. Instead the site estimates what the fee has cost and reports it as a separate line, so the drag is visible rather than buried. Brokerage is the opposite case, and a different thing entirely. The $3 is what my broking app charges to place the trade. It has nothing to do with ProShares or the fund. It leaves my own cash account on every buy, so it is deducted for real.
The pattern is simple. Two issuers of the same idea: pick an index, pick a multiple. Nasdaq-100 or S&P 500, doubled or tripled. I want to sit at about twice the index and stay there with as little maintenance as possible, so I buy the two doubles: QLD on the Nasdaq-100 and SSO on the S&P 500. The tier rules decide how fast the money goes in. The triples are still useful, but only after a crash, which is set out on the strategy page.
One thing worth clearing up
Holding a leveraged ETF is not the same as borrowing money to invest. When you buy on margin, you owe a debt, you pay interest on it, and if the market falls far enough your broker can force a sale to recover the loan. That is a margin call, and it is how leveraged individuals get wiped out at the worst possible moment.
A leveraged ETF works differently. The leverage lives inside the fund, built with swaps and futures, and the fund manages it. You buy a share like any other share. The most you can ever lose is what you put in. There is no loan in your name, no interest bill arriving each month, and no margin call can come for you. If the fund falls 90%, your holding falls 90% and that is the end of it. Painful, but bounded.
That is the one genuine mercy of these funds, and it is why a strategy like mine is even thinkable. I can hold through an 80% drawdown without anyone forcing me out. A margin trader attempting the same thing would very likely be sold out near the bottom, which is the exact opposite of what the rules here tell me to do.
How it works
Two ideas doing one job. The first is deliberately dull. The second is what turns a falling market from something to dread into a schedule of larger purchases.
Every month, no exceptions
A fixed US$800 goes into each fund every month, whatever the price is doing. It takes the decision I'm worst at, picking the right moment, off the table completely. Part of it buys shares now. The rest waits as cash.
Only as the market falls
How much of that cash I deploy is set by one number: how far the fund sits below its high. Near the top I spend a little and let the reserve grow. The deeper the fall, the more I commit.
Each figure is a share of all the cash on hand: this month's US$800 plus everything already waiting in reserve. Whole shares only, and the remainder rolls into next month. Brokerage of $3 a buy, charged by my broking app rather than the fund, comes out of the cash separately. Drawdown is measured from each fund's own record high, taken live from Yahoo Finance: QLD's record high and SSO's record high. The price on the other side of that sum is whatever I pay on the day I buy.
What I'm trying
The standard Australian answer is a low-cost index fund held forever. It's a good answer and I'm not arguing with it. But I wanted to know what happens if you hold most of your money in cash while the market is near its high, then convert it into a 3× Nasdaq-100 fund as the market falls. 20% of the pile near the high. A third at −20%. Two thirds at −40%. All of it at −60%. Nobody in Australia seems to have written that down over a full cycle, so I'm doing it.
The engine
A leveraged fund aims for a multiple of its index's move on a single day, then resets and does it again tomorrow. TQQQ targets three times the Nasdaq-100, QLD targets two. Because those daily results compound on one another, a long climb carries the fund far past a plain multiple of the index. Here is what $10,000 became in the plain index, in the 2× and 3× funds on it, and in a line showing what tripling the index would have produced. All four start from the same point on the left.
| Year | QQQ | TQQQ | $10k in QQQ | $10k in TQQQ |
|---|---|---|---|---|
| 2011 | +3% | −8% | $10,340 | $9,195 |
| 2013 | +37% | +140% | $16,681 | $33,570 |
| 2017 | +33% | +118% | $30,944 | $150,147 |
| 2020 | +49% | +110% | $63,851 | $591,370 |
| 2021 | +27% | +83% | $81,347 | $1,082,089 |
| 2022 | −33% | −79% | $54,828 | $226,373 |
| 2023 | +55% | +198% | $84,928 | $675,180 |
| 2025 | +26% | +34% | $133,977 | $1,435,525 |
| 2011–25 | +1,229% | +14,255% | $134k | $1.44M |
QQQ, the plain tracker, turned $10,000 into about $133,000. Tripling that return would have reached roughly $379,000. The 2× fund on the same index reached about $696,000. TQQQ actually reached about $1.44 million. That is not three times QQQ. It is close to twelve times it, and about four times what tripling the index implies. The daily reset, compounding day after day through one of the strongest runs the Nasdaq has ever had, is the whole reason. (This is a lump sum left untouched, to show the fund's own behaviour. My actual plan buys a fixed amount every month instead, which behaves quite differently. That is what the Progress page tracks.)
It cuts both ways, and hard. Look at 2022: the index fell 33% and TQQQ fell 79%, wiping out four fifths of a balance in a single year. The same compounding that built the tall line hollows the fund out in any market that chops sideways or falls. That is the risk this whole plan is built around, not a footnote to it.
A single $10,000 left alone from the end of 2010, distributions reinvested, with nothing added. QQQ and TQQQ are Yahoo Finance annual total returns, compounded, and the series stops at the end of 2025, the last complete year. QLD is calculated from the other two rather than taken from its own price history: the gap between a 1× and a 3× fund on the same index gives the year's drag, and a 2× fund carries a third of it. 3× QQQ triples QQQ's growth and is not a fund you can buy. A log scale is used because the end values are too far apart to show on a straight one. Figures ignore brokerage, currency conversion and tax.
Where to start
The full tier ladder, a worked example at US$800, what I didn't build this on, and every way this can fail.
Every month since August 2026: price, drawdown from the high, shares bought, cash reserve and running return.
What I actually did, how it felt, and what the market was doing that month. Short in the quiet months, longer in the ugly ones.
Comments
What do you make of it?
If you hold leveraged ETFs I'd like to know how it has gone for you. If you run something else, tell me about that instead. Corrections welcome too.