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What is gearing?
Take a lever, place it on a fulcrum and push down. With this simple tool you can lift a much greater weight than you ever could using your bare hands. Gears use the same principle. And that's why borrowing to invest is also known as "gearing". It's a simple tool that you can use to build your wealth – leveraging your assets to create wealth opportunities.

Gearing may enable you to:

Build your wealth faster Improve risk management by achieving greater diversification Reduce your tax liability – eg. taking advantage of potential tax deductions

Types
There are two main ways to gear your investing:

Using a margin loan – where the shares and/or managed funds you invest in are the security for the loan Using home equity – where you use the equity you've built up in your home as security to invest in other assets – typically property, shares and/or managed funds

Risks
Remember, gearing will magnify losses as well as gains.

To see how gearing works read our gearing case study or find out more about the types of gearing products available.