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Borrowing to Invest




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Borrowing to Invest
Leveraged Investing

What is an investment loan?

Traditional investing is simple: earn money... save a portion of that money... invest money. This is a time-tested strategy, but did you know that your money isn't working as hard as it could be?

With a 'borrow to invest' strategy, your money works harder for you. Rather than making a series of small contributions over a long period of time, you borrow a larger amount, and invest it all at once. This allows a much larger investment to grow for your full investment period. Then, instead of making additional contributions to your investment, you make interest payments on your loan.

Why does this strategy work?
There are two powerful forces driving this strategy:

Compound returns: An investment loan allows a larger amount to grow for longer - which can generate a much larger long-term return.

Would you like more info on Borrowing to Invest?

Flash Presentation
(requires flash player).

.pdf format
(requires Acrobat 5 reader).

These excellent presentations are provided by Manulife Bank!!


Tax deductibility: Any interest charged on an investment loan is generally tax-deductible. This reduces your cost for the investment loan.

By deducting loan interest you can also reduce the rate of return needed to be better off using an investment loan than a traditional investing strategy.

How can you learn more about investment loans?

Hans Mathisen can answer any questions you may have about this type of strategy, and help you determine if this strategy is right for you. He would be happy to provide you with a customized illustration that shows how an investmentt loan could work for you, taking into account your own tax rate and expected rate of return.

For another, excellent source of information on borrowing to invest, check out these links:

Borrowing to invest - multimedia interactive presentation (requires flash player)

Borrowing to invest - .pdf format (requires Acrobat reader 5.0+)

Mathisen's May/2003 Commentary - On "Dollar Cost Averaging" - Using other people's money to invest.

For more information please call (306) 242-7042, or fax (306) 242-4314.
If you prefer to contact me by e-mail, address any questions you may have to:
There is no cost or obligation.

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Mathisen Financial, Inc.
335 Redberry Road
Saskatoon, Saskatchewan S7K 4W5
Bus. (306) 242-7042 Fax. (306) 242-4314