If you're serious about building your wealth, gearing can be a powerful investment strategy. Borrowing money to invest in growth assets like property and shares can magnify your investment returns (positive or negative!) and help you achieve your long-term financial goals. Along the way, it may also help you reduce your annual tax bill.

Gearing explained
Gearing simply means borrowing money to invest. In the same way that you can borrow money to buy a family home, you can also borrow money to buy other assets in order to build your wealth.
$50,000 Your Money + $50,000 Borrowed Money = $100,000 Total Value of Portfolio

A gearing strategy can magnify your investment returns simply because it means you have more money to invest. Of course, the flip side is that gearing can also increase your losses if your investments fall in value.

How can gearing help you save tax?

Gearing not only increases your potential to make money, it can also save you tax. If you invest the borrowed money in shares or managed funds, you may receive franking credits that can help your tax position. You may also be able to deduct the difference between the interest you pay on your loan and the income you earn from your investments. This is known as 'negative gearing'.

Did you know?

When you borrow money to invest in income-producing assets like shares and property (whether direct or through a unit trust), you may claim the interest payments as a tax deduction.

With access to some of the best products in the market offering very competitive rates of interest, we can help you determine the optimum level of gearing for your circumstances. You might be surprised at how little you need to begin a successful gearing strategy so contact us for a free assessment of your situation