Many people have heard the word “Gearing” from friends at BBQs, read it in the press – my investment property’s negatively geared, I’ve geared my share portfolio – but not as many people know what it means.

It is possible to borrow money to make an investment – houses and shares are the most common types of investments against which it is possible to borrow – and it may even be possible to claim the interest on the loan as a tax deduction as it is considered a cost of making the investment.

The income generated by the investment relative to the interest cost of the investment is the level of gearing. If the income from the investment is higher than the cost, the investment is known as positively geared – while if the cash-flow is the other way around (cost exceeding the income), the investment is known as negatively geared.

Brisbane Money Management will discuss your views on the risks and benefits associated with borrowing to invest. BMM will help you decide if this strategy is appropriate for you, whether it will help you meet your financial needs.