• My Fortress

Gearing

Gearing or borrowing to invest, allows individuals and couples to excel their wealth creation to help grow their retirement assets.

Pro’s:

  • Allows individuals wanting to accelerate their wealth creation by accessing a larger amount of money to invest and subsequently provides the opportunity to generate compound returns from the investment.

  • Provides an alternative retirement strategy compared to superannuation for those with longer timeframes and potentially wish to access their capital before the age of 60.


Con’s:

  • The value of the asset may fall, and the same overall debt still needs to be paid.

  • Possible margin calls with margin lending products – When the loan to value reaches a level where the lender forces you to inject further funds. Failure to inject further funds could result in part of the asset being sold at a depressed level to reduce the loan.


Suitable for:

  • Those with a longer timeframe to invest (i.e. 7 plus years) who have the timeframe to ride-out investment volatility.

  • Those with high and steady incomes looking to reduce their taxable income and have the capacity to service interest costs.