A great article by Bina Brown on page 28 of the weekends Australian Financial Review (2-3 November 2013). Bina writes how younger investors are using margin loans to create wealth and a deposit for their first home.
This is the type of strategy we have been implementing with a number of younger clients and wrote about its effectiveness a few months ago in August. Since then the market has grown by over 7.5%.
Key areas to consider:
- Gear at conservative levels – make sure you can afford the ongoing payments without relying on dividends.
- Diversify your portfolio – reduces the risk of being a pure “stock picker” (don’t have all your eggs in the one basket).
- Pay interest regularly – avoid any additional finance charges and margin calls
- Buy good quality shares
For more information see the article http://www.watkinsfinancialservices.com.au/finding-it-difficult-to-save-for-your-first-home/ or contact my office 07 3118 6000.
Is Direct Life Insurance the same as Advice Life Insurance?