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.

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Thomas Jacks BCom (Acc), SMSF SpecialistTM, Adv. Dip F.S. (FP)
“I want to be able to assist clients with their investment and retirement planning by providing real strategy advice. It’s my aim to not only help my clients but to educate them by addressing the entire picture” Google Plus

Categories: Borrowing To Invest, Financial Planning, Shares   |  Posted on
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