Whatever your financial objectives, most of us wish we had more money to build wealth. Through gearing, you can access the funds you need to invest, and reach your financial goals sooner. And increasingly, more and more people are gearing into the sharemarket because the benefits include:

Greater potential returns

• Gearing provides you with more funds to invest - potentially magnifying your returns.

Portfolio diversification

• A spread of investments means you can reduce risk by not putting all your eggs in one basket. A larger portfolio usually means a better quality portfolio too.

Financial flexibility

• Gearing is flexible for your financial situation and objectives. You can decide on your preferred level of gearing at the outset, or adjust it over time.

Upfront opportunity

• You can start investing sooner, rather than later. Gearing plans are available which allow you to get started without putting in a large amount of your own funds.

Potential tax efficiencies

• You may be entitled to claim loan interest as a tax deduction against your investment earnings and other taxable income earned during that year.

A larger portfolio, a better spread, more opportunities and potential tax efficiencies - it all adds up to a more dynamic investment strategy.

Understanding the risks of gearing
While gearing can magnify your returns, it can also magnify your losses. It is important that you understand the different types of risk involved and the steps to take to manage those risks to acceptable levels.