This segment was broadcast on 21 April 2016. Some information may be out of date.

Good borrowing

How gearing boosts returns — and losses
  • Good and bad borrowing
  • A simple example of gearing
  • Compare this with investing without borrowing
  • 2 other ways gearing is risky
  • Can you cope with gearing?

Mary Holm is a freelance journalist, a director of Financial Services Complaints Ltd (FSCL), a seminar presenter and a bestselling author on personal finance. From 2011 to 2019 she was a founding director of the Financial Markets Authority. Her opinions are personal, and do not reflect the position of any organisation in which she holds office. Mary’s advice is of a general nature, and she is not responsible for any loss that any reader may suffer from following it.