Negative gearing

Negative gearing

“How much gearing depends on three strengths; the strength of your assets, the strength of your income and the strength of your stomach muscles.” – Noel Whittaker.

This means borrowing to a level where the net income from the asset purchased is less than the ongoing costs of ownership. It’s a great way to maximise profits but if you pick a bad investment, you’ll also suffer much higher losses. Use it with care.

This entry was posted in . Bookmark the permalink.
Loading Facebook Comments ...