11.5 million Australians now invest outside super. Where should home equity go when advice is free?

The number

A record 11.5 million Australian adults now hold investments outside their super and their main home, according to ASX figures reported by the ABC this week. ETF ownership has doubled. And a growing share of younger investors are taking their cues from free AI tools rather than a paid adviser.

That is a very large number of people making capital decisions, most of them for the first time.

If you own a home with usable equity, this story is about you more than it is about them.

What changed

Three things happened at once.

The cost of entry collapsed. An ETF lets anyone buy a slice of a whole market with a few taps, for a few dollars.

The cost of research collapsed. An AI tool will compare two funds, explain franking credits or model a ten-year return in seconds, for nothing.

And the habit spread. Investing outside super stopped being something your accountant did and became something your group chat does.

None of that is a problem. Cheap access and cheap information are good for investors. The ASX figures are a sign of a country getting more financially engaged, and that should be welcomed.

But it changes what is scarce.

What it means if you have equity

Most readers of this page are not 22 with $50 a week to spare. You own a home. You have a mortgage, a decent household income and a meaningful amount of usable equity sitting inside the walls of the house you live in.

That equity is now the most contested capital in the country. ETFs want it. Crypto wants it. The AI tool on your phone will happily tell you what to do with it, at no charge.

So the decision in front of you is plain. Spare capital or borrowing capacity exists. Where does it go, and under what structure?

The asset class is the second question. Structure comes first.

The decision and the trade-offs

Here is the comparison most people never write down.

Leverage. A bank will lend against residential property at a level it will not lend against a share portfolio or a crypto wallet. As a simple illustration, $100,000 of equity used as a deposit at an 80 per cent loan-to-value ratio controls a $500,000 asset. The same $100,000 in an ETF controls $100,000. If both assets grow at the same rate, the growth is earned on $500,000 in one case and $100,000 in the other. That is the single biggest structural difference, and it is the one free advice tends to skip because it is hard to put in a chart.

Cost. Leverage is not free. Property carries interest, rates, insurance, maintenance and periods with no tenant. An ETF carries almost none of that. Anyone who tells you property wins on every line is selling something.

Liquidity. You can sell an ETF before lunch. A house takes months, and a bad sale in a bad month can erase years.

Concentration. An ETF spreads you across hundreds of companies. A property puts most of your capital on one street. That is a risk, and it is also the whole point: on the right street, concentration is where the return comes from.

Evidence. This is the trade-off nobody puts in the headline. Free AI advice is built on inputs: medians, yields, growth tables, forecasts. It is very good at inputs. What it cannot show you is outputs. It cannot tell you what happened to the last thousand people who followed its answer, including the ones for whom it went wrong.

The expensive mistake

The mistake is treating a free answer as a tested answer.

An AI tool can tell you a suburb's median rose 8 per cent. It cannot tell you that half the streets in that suburb went backwards while three streets near the station carried the whole number. Averages hide the spread, and the spread is where money is made and lost.

When information is free, the scarce thing becomes a measured, published record of results. The full distribution. Winners and losers in the same table.

That is the only claim we make for ourselves. Across 997 client portfolios since 2021, the median portfolio has grown at 19.0 per cent per year on a 5-year rolling basis, against roughly 6.3 per cent for the combined capitals over the same framing (benchmark: CoreLogic/Cotality). We publish that result in full, including the portfolios that underperformed. Past performance is not a guarantee of future results.

We do not say it to beat ETFs. We say it because a published distribution is what a free tool cannot give you, and it is the thing you should ask of anyone, in any asset class, before you move six figures.

The street-level reframe

Two streets in the same suburb can be having completely different years. One backs onto a park and sells in nine days. One backs onto an arterial road and sits for three months. Same median, same postcode, same AI answer.

The free tool reads the suburb. The money is made at the street.

So the question for a homeowner with equity is not whether 11.5 million people are right to invest. They are. The question is whether your capital goes into a structure that uses leverage you already have, on an asset chosen with data that goes below the suburb line, backed by a record you can actually inspect.

Structure, then street, then timing. In that order.

Want to see how that comparison is tested street by street before any equity moves? Join Jacob's free live webinar.