Episode Details

With recent changes to negative gearing for investment properties, many Australians are starting to ask an important question:

Can you negatively gear shares instead?

The answer is yes — but borrowing to invest in the share market comes with its own risks, responsibilities and opportunities.

In this episode of SugarMamma's Fireplay, financial planner Canna Campbell explains how negative gearing shares works, the two most common ways Australians borrow to invest, and the practical steps you can take to reduce your risk and build wealth more safely.

Whether you're curious about debt recycling, considering a margin loan, or simply want to understand how tax deductions work when investing in shares, this episode will help you make more informed decisions.

In this episode, you'll learn:

✔ What negative gearing actually means

✔ Why negative gearing is a tax outcome, not an investment strategy

✔ The difference between margin loans and debt recycling

✔ How investors use borrowed money to invest in shares

✔ The potential tax benefits and wealth-building opportunities

✔ The risks of borrowing to invest

✔ What a margin call is and how it works

✔ How rising interest rates can affect your strategy

✔ The importance of cash flow and emergency savings

✔ 7 practical ways to reduce risk when negatively gearing shares

My 7 risk-management rules for borrowing to invest:

1. Diversify your investments
2. Focus on liquid investments
3. Have a clear investment goal
4. Maintain a strong emergency fund
5. Consider reinvesting dividends or using the dividends to service & reduce the investment debt
6. Gradually reduce investment debt - consider a P&I loan over a IO loan - with advice
7. Review your strategy regularly - e.g. every 6 months

Key takeaway:

Borrowing to invest can accelerate wealth creation, but it can also amplify losses. Before considering a negatively geared share strategy, make sure you understand the risks, have a long-term investment plan and never invest purely for a tax deduction.

The goal isn't to create a tax loss. The goal is to build long-term wealth.

Resources Mentioned

• Debt Recycling Explained
• Margin Loans Explained
• Emergency Fund Calculator
• ETF Investing for Beginners
• LIC Investing Basics