Planning Process / Loans Finance
Loans, Finance and Gearing Capital
Totally Integrated Financial Planning is able to compliment our comprehensive range of services to assist you in achieving your objectives and goals.This additional service relates to the identifying and accessing competitive alternatives for your financial requirements. We are able to match your individual needs to an appropriate funding source.
We can offer you option's on:
- Housing Mortgage Finance
- Mortgage Finance
- Reverse Mortgages
- Leasing
- Gearing
- Asset Finance
- Construction & Development
- Personal Loans
Gearing for Growth
Borrowing money to invest is generally called "gearing". The objective of "gearing" is to create wealth by using borrowed funds. Borrowing to invest gives you the opportunity to increase the size of your investment and therefore the potential return.
Gearing increases the potential profits in your investment because you have more money to invest, but this also means it can increase your losses.
To the extent that an investment is made with a view to generating an income stream, the interest cost of borrowing is an "allowable deduction". This helps support the cost of the investment and can make borrowing to invest an attractive proposition. In a negatively geared investment, the net income stream from the investment is exceeded by the interest cost of the borrowing.
Gearing is definitely not suitable for everyone.
Gearing is a strategy best suited to you if you:
- Have enough income from other sources, like a secure salary, or have a reserve of funds to meet possible margin calls if there is a significant drop in the market.
- Are in the highest income tax bracket, where the tax deductibility of the interest payments is maximised so the actual cost of the borrowed money is reduced as much as possible.
- Are an experienced investor, having a practical appreciation of the volatility of your investments and the risks involved.
Investments that offer the potential to deliver higher growth and low income are most effective.
Given that investment returns are variable; it is essential to view a geared investment strategy as a long-term commitment as this enables you to benefit from the returns of growth assets and minimise the long-term impact of short term market fluctuations.
