Gearing can be a way of increasing your wealth faster, by increasing the funds available to you for investment. Although gearing can help you achieve your financial goals faster it involves a greater degree of risk as it involves borrowing funds for investment.

Before considering gearing seek out the advice of specialists in the field. We can help you do your homework, by offering you access to our specialist advice on gearing.

The benefits

  • facilitates higher levels of investment
  • earnings can be multiplied, in good market conditions
  • the excess cost of borrowing is an allowable tax deduction if the investment return is less than the amount borrowed
  • imputation credits may be available if you borrow to invest in shares. This can help to reduce the amount of tax payable

The risks*

  • volatile market conditions
  • rising interest rates could restrict your ability to pay back your loan
  • there may be times when investments produce no income or make a loss
  • losses may be multiplied
  • you may be subject to a margin call if you take out a margin loan
  • For more information on Gearing strategies, contact a Schroeder Capital adviser.

    *We only recommend gearing strategies to particular clients who fully understand the financial risks. For more information about the risks associated with gearing contact your Schroeder Capital adviser.

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