Gearing / Borrowing to Invest

Understanding Gearing: Borrowing to InvestYour Sunshine Coast Financial Planning Specialists

The advantage of borrowing to invest, or gearing, is that if the return on the asset exceeds the cost of borrowing then you can grow your wealth more quickly. The interest payable on investment loans is normally tax-deductible.

A common gearing strategy is using the equity in your home, even if you don’t own it yet, and investing in other assets including property, shares or managed funds.

It’s important to remember, however, that while gearing can help you build more wealth there is also the risk that any losses you incur will hit harder.

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Before you decide to borrow to invest, talk to one of the team at Ethica Private Wealth specialists to check all your options and determine the most appropriate strategy.

Phone us on (07) 5443 5577 or complete the form to arrange a complementary initial consultation.

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