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Much of the wealth of Australia has been built on borrowed money. Many people have long recongnised that, by borrowing money and investing it productively, they can grow their wealth faster than if they relied on cashflow alone. By borrowing to invest and adding it to your existing funds, you create a larger portfolio, a better spread of investments, lower average transaction costs and some potential tax efficiencies. But be aware, as much as gearing magnifies your gains, it has the same effect on your losses.

There are 3 main styles of gearing, the first is a single lumpsum amount or using an existing portfolio as security, the second is instalment gearing where regular amounts are advanced every month, and third establishing a facility which you can trade through, increasing and decreasing your balance as you go, similar to a line of credit.

Finding the right product is important. While interest rates are generally the first thing people look at, other features to consider are:

	The Loan to Value Ratio (LVR)
	Buffer amount
	Range of Stocks and managed funds available
	Minimum required loan balance
	Margin Call conditions
	Interest repayment conditions