“Why would I want to grow my debt?” you may ask.

Many people at some stage during their life use debt to create wealth. However, to be a successful “debt grower” you first need to change your mindset from thinking debt is negative to thinking of it as a wealth creation vehicle.

Families often wait until their mortgage is paid down in order to begin their journey for financial success.

By biding time, many miss the wealth creation opportunities during those missed years.

Using an investment line of credit they re-borrow the principal of your home loan (their increased equity in the home) and invest it in growth assets. You may even decide to re-borrow and invest your increased equity in each subsequent year until the home loan is repaid.

Once your home loan is repaid, then you may start investing the entire surplus income over the remaining term.

Managed well, debt can increase wealth a lot faster than simply saving to invest, but as with most wealth creation strategies, there are risks to consider. Before making any decisions regarding this strategy, consult with a financial planner.

Modoras Pty Ltd ABN 86068034908 AFS License No. 233209. This article contains general advice information only and is not intended to represent specific personal advice. No individual personal circumstances have been taken into consideration for the preparation of this material. It is recommended that you obtain your own personal professional financial advice before making any financial investment decision.
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  • An interesting article and a financial planner sound’s like a good idea.


  • great article and it would be handy to have more info or a part two to this article. cheers for this


  • Really good knowledge to know! Thanks for sharing this!


  • this is a great approach but you need to ensure that you have a consistent income and rock solid relationship, we mortgaged our home to purchase a commercial property that we ran a small business from, this worked for us and we made a good profit on the sale of the property and the business at the right time, and now are comfortably retired at a relative young age, I am in my 40’s, we have no financial problems but we did have to think long and hard before making the commitment and sacrifice of mortgaging our home to try and create more income, it worked for us, but there are traps, you just need to weigh up the pros and cons and have an exit strategy if things don’t work out as planned, as no one actually ever says, well what if something goes wrong, sickness, job loss, death, anything can happen unexpectedly.


  • Interesting article, thanks for the info!


  • I don’t think I’d like to do this. We have used equity in our house to buy investment properties, but years later we want to pay of our mortgage, pay these off and continue to invest without debt.


  • We borrowed to purchase a rental property. We then sacrificed every weekend for 6 months to renovate the property. The property was rented out once the renovation was finished. That was 10 years ago. We had a tough 2 years at the start, but we sold the house earlier this year for a 100 percent return on our investment. It was worth it all.


  • I definitely come from the avoid-debt-at-all-costs line of thinking, but you have given me food for thought. I’ll be doing some more research to get my head around it a little more


  • A wealth creation vehicle, that’s a new spin on debt.


  • Something to look into and further research, thanks for sharing.


  • mm it sounds risky with the economy the way it is today, security in your job is non existent today


  • We are going to pay off our house loan a bit more before we consider our next step.


  • This is true, but you have to be so careful not to overextend yourself or invest in shonky get rich fast schemes.


  • Call me old fashioned but once our home was paid in full I considered that a financial success and don’t want to go there again lol!


  • we are about to do this. thanks for hints and tips.

    • Hi Nida! Let me know if you need any assistance. Managed well, debt can increase wealth a lot faster than simply saving to invest, but as with most wealth creation strategies, there are risks to consider along the way. Feel free to email me at katerina.sousalis@modoras.com or phone me in the office 13000 888 8803. Have a lovely weekend :)


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