(08) 9317 7300

Borrowing to Invest

Borrowing money to invest is a very risky business and qualified, licensed, financial advice should be sought before doing so.

Borrowing to invest is also called “gearing”, more specifically “negative gearing” and the potential high returns can be wonderful, but the potential losses can be devastating as you will have to repay the loans on the investment regardless of your potential losses.

Therefore, you would be crazy not to seek qualified financial advice regarding the pros and cons of borrowing to invest, and whether it is a suitable option for you.

There are two types of loans you can get to use for investing:

• Investment Property Loan – this is where you, as the Lender, take out a mortgage on your property as security for the loan.

• Margin Loan – this is where, you as the Lender, use shares or managed funds as security for the loan.
Should you borrow money to invest?

That depends on your current financial and personal circumstances, and what your long term goals are.

Generally speaking, there are individuals and businesses borrowing money to invest every day.  Borrowing to invest is a sound investment strategy as long as the investment is sound.  A good investment takes time to choose, knowledge and experience.  Make sure you get professional advice from a licensed Financial Adviser to help you decide whether a particular gearing investment is right for you.  Real Estate Agents and Salespeople are not licensed and they just look after their clients, not you.

At Baggetta & Co, as licensed Financial Advisers and Accountants, we are obliged under the law to look at your personal situation.  Good advice from an experienced, well-informed Financial Adviser can help you save money and become more financially secure.

Latest Articles

Stay updated

Subscribe to the Baggetta newsletter to stay updated with regular industry and company news.

Establised 1989. Over 25 years. Advice you can rely on.

Is it time for a change?

For more information about the services we provide, or to find out if you are eligible for a free no-obligation consultation, call us now on 9317 7300.

The information provided on this website, including the material and contents provided in the website publications, are informative in nature only and you should not act specifically on the basis of this information alone. It should not be used as a substitute for legal, business, accounting, tax, financial planning or other professional advice. If expert assistance is required, professional advice should be obtained. Liability limited by a scheme approved under Professional Standards Legislation

Paul Baggetta is the Founder & Principal of Baggetta & Co (ABN 68 786 233 813).

Paul Baggetta has been a Taxation Accountant since 1981, a Financial Planner since 1998, and in 1993 qualified as a Real Estate Licensee, holding a Triennial Certificate (currently not trading) and operated his own Real Estate business for property investment clients for over 5 years as a second business.

Financial planning services are provided by Paul Baggetta as an Authorised Representative (No. 261469) of Capstone Financial Planning Pty Ltd. ABN 24 093 733 969. Australian Financial Services License No. 223135.


Taxation & Accounting services are provided by Paul Baggetta as a Registered Tax Agent (No.61487008) and is a Member of SMSF Association, FIPA & NTAA.