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Grow your wealth faster

Post Date:13/11/2008 | Author: Dylan Mann

Saving is usually a slow and steady process but when you combine the power of margin lending with the discipline of a regular savings plan, you can get results much sooner.

What is regular gearing?

With regular gearing, you combine your monthly savings with borrowed funds to invest in selected managed funds every month. It’s a simple way to 'drip-feed’ smaller amounts of money into your investments regularly, with the monthly instalment automatically deducted from your account.

What are the benefits of regular gearing?

Put simply, regular gearing increases the money you have to invest - you regularly invest your own money and add more to your investment with borrowed money. It’s also a more disciplined method of investing as your contribution is automatically deducted from your bank account and margin loan each month.

By regularly adding money into your investments, you can also take advantage of dollar cost averaging - buying more when the market is down and less when the market is up - which helps smooth out the highs and lows of investing.

Advantages of regular saving

  • helps you achieve a disciplined approach to investing
  • benefit from dollar cost averaging - smooth out the highs and lows of investing
  • the instalment is automatically debited from your bank account each month - this saves the frustration of having to 'time' the market.

Advantages of gearing

  • the ability to have more money working for you
  • more money invested means potentially increased returns
  • having more money to invest allows you to diversify your investments
  • margin lending can be highly tax effective.


How much do I need to get started?

The minimum investment amount required for a regular gearing loan is much lower than that of a standard margin loan. While a standard Margin Loan requires a $20,000 minimum loan balance, some Regular Gearing allows a minimum loan balance of just $2,500, if gearing is at 70%. This means that the initial equity required from the investor can be as little as $1,100.

Other requirements of establishing a regular gearing loan includes:

  • an initial investment of $1,000 per managed fund
  • a minimum monthly investment from you of $250 per managed fund
  • a minimum monthly loan advance of $250.


Like to know more?

For more information on how regular gearing can be used in conjunction with a margin loan to help build wealth more quickly give us a call 1300 882456

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