Do more with your money
Are your finances set up for long-term growth?
Getting the right advice can make a big difference when it comes to growing and protecting your family's financial future. Working with a financial adviser gives you access to the latest thinking and smart strategies, including tips on how to structure your portfolio for faster growth.
Gearing for growth
Find out how
Greg and Jackie increase their investments by $429K
Most of us are comfortable with the idea of borrowing money to buy a house we can't afford outright.
But what about borrowing to buy other investments that have the potential to grow in value?
Known as gearing, this can allow you to build wealth faster than if you rely on your own capital.
It can be tax-effective and you can repay the loan using income from your investments. Of course, it can enhance your losses if your investments fall in value.
To be successful in the long term, your investments need to generate a total after-tax return (income and capital growth) that exceeds the after-tax costs of financing your investment (including interest on the loan).
It's important to match your loan to your risk profile, to make sure you don't borrow more than you're comfortable with. It's also worth noting this strategy works best for those who are disciplined with their money.
There are a number of ways to implement a gearing strategy. You can:
- borrow against the equity in your home
- take out a margin loan, or
- invest in an internally geared share fund
Borrowing against the equity in your home
This allows you to take advantage of a low interest rate, with no restrictions on what you can invest in.
Take out a margin loan
Typically, the lender will lend up to 75% of the value of approved share and unit trust investments. For example, if you had $100,000 to invest, you may be able to borrow $300,000 to purchase approved investments and make a total investment of $400,000.
Investing in an internally geared share fund
This is where the manager borrows on behalf of investors to make a larger investment in Australian and/or global shares.
A financial adviser can discuss these strategies in more detail and see whether gearing is right for you.
Understanding the right opportunities for you
There's no one size fits all solution when it comes to making the most of your money.
What works for your friends or neighbours might not be the best strategy for you.
This is where an MLC financial adviser can help.
We take a comprehensive look at the plans you already have and show you how you can achieve more with your money.
There are a range of strategies to consider and we'll work with you to see what fits with your goals.
We can help with: investment and super strategies; balancing your investment portfolio; managing debt; protecting your assets; retirement planning, and much more.
To make the most of your money, it's often the opportunities you haven't considered that can make the biggest difference.
Call us today on 132 652 to speak with an adviser about how we can help.