An investment loan allows you to borrow money to purchase investments that have the potential to increase in value, and:
- Accelerates savings through an initial lump sum investment
- Interest casts may be tax deductible
- Can be used as a wealth building tool
What are compound returns?
Compound returns on an investment means that returns are calculated not only on the initial investment, but also on the accumulated growth from year to year. Having a larger initial investment growing for the longest possible time is essential for compounding success.
Is an investment loan right for me?
Only your advisor can help you determine if investment lending is right for you. In general, investors who may benefit from this strategy will have:
- A long investment horizon
- Available cash flow
- A high risk tolerance
What is interest deductibility
Generally speaking, interest paid to borrow money to earn investment income is tax deductible. When the interest is deducted, it can be an effective way of reducing the overall cost of an investment lending strategy.