Borrowing to Invest
Gearing is borrowing money to invest. The investment could be in direct shares or managed investments, such as an equity trust, balanced fund or property. Gearing is, in essence, directed towards producing a larger investment return by using borrowed funds often in addition to your own funds, so that financial goals can be achieved more quickly.
Gearing can be used as part of the overall investment strategy to help build your wealth. It gives you greater potential to generate wealth because you have money in the investment market.
Gearing is best suited to people who are comfortable taking extra risk with their investments and those who can cope with potentially large fluctuations, both up and down, in the value of their investments.
There are risks and implication with gearing so it is very important to seek advice from a financial Adviser.
Engaging with a financial adviser is not just about the strategies that are provided, it is about having someone there who will make sure that you stay on track with your plan and can guide you through changes to your wealth accumulation plan when required.