Leveraged growth

You can't work more hours. Your money can.

Most of us build wealth by trading time for money. That has a ceiling. Here's how borrowing to invest puts more money on the job for you.

Show me how
One week
You about 40 hours
Your money all 168 hours
MTWTFSS
The catch: money can only work as hard as there is money.
The idea

You need money to make money. So hire more of it.

Rising costs leave less to save, and your savings can only grow so fast on their own. Leverage means borrowing money and putting it to work beside yours. You pay it a wage called interest. If it earns more than its wage, you keep the difference.

1

Work and save

Your paycheque covers life. What's left over is your first team of dollars.

2

Borrow to invest

Borrow with nothing down, or bring some of your own and a lender adds more beside it.

3

Keep the spread

The whole team grows together. After the loan's interest, the extra growth is yours.

See the numbers

It all comes down to the spread

Loan
Growth
Your spread
0%15%

Net worth with leverageSame cash, no loan

Loan at prime + 1% (5.70%). After-tax cost assumes a 43% bracket. "Same cash, no loan" invests your own money plus each after-tax interest payment yourself. Hypothetical steady returns after fees; 15% is aggressive and shown for comparison only.

Tax deductible

A tax break on the way in. The interest comes off your taxes.

Borrow to invest in a non-registered account and the interest is generally deductible. The government picks up part of the cost.

Interest
what the loan costs
→
~40¢
back per $1, roughly, at a higher bracket
→
Lower
real cost

Rounded and hypothetical. Deductibility depends on your situation.

The safety net

Invest with a floor under your family.

The borrowed money goes into segregated funds with a death benefit guarantee. If you pass away in a down market, the contract pays back at least what went in, so the loan is cleared and your family is not left with the debt.

Your money plus borrowed money. Markets down at the time of death. Hypothetical.
Regular fundworth less
The estate can be left owing part of the loan.
Seg fundat least what went in
Loan cleared, and your own money goes to your family.
Pays at death only. Withdrawals reduce the guarantee, and seg funds cost more for the protection.
Is it right for you?

Leverage fits steady incomes, long timelines and calm nerves.

Markets fall and rates rise, and the loan is owed either way. Let's check whether it fits your budget and size it properly.

Book a conversation

Before you borrow to invest

Losses are magnified too.If markets fall, the drop hits the borrowed money as well as yours. You still owe the full loan and interest.
Your payment can go up.The rate floats with prime. And if your investments fall far enough, the lender can switch you from interest-only to principal plus interest.
Time is part of the plan.Plan to hold for 10 years or more. Selling in a slump locks in the loss. The death benefit guarantee pays at death, not when you sell.
Borrow what you can carry.The interest should fit comfortably in your budget even if rates rise and markets are down for a few years.

Using borrowed money to finance the purchase of investments involves greater risk than using cash resources only. If you borrow money to purchase investments, your responsibility to repay the loan and pay interest as required by its terms remains the same even if the value of the investments purchased declines. Loans are subject to lender approval and rates float with prime. Interest deductibility depends on your circumstances. Figures on this page are hypothetical, at steady returns after fees, and are not a projection or a promise of future results. Seg fund market values are not guaranteed; the death benefit guarantee is payable on the death of the annuitant, reduced by withdrawals, and subject to contract terms.

Wealthed Up Inc. · Donny Mangos · Ontario, Canada