Property Investment or Share Portfolio?

My home now has over $200,000 of equity in it. Should I be using this equity to help fund further investments either an investment property or a share portfolio. I am single, with no children and would like to build wealth outside of my superannuation.

Is it absolutely necessary to use the equity in your home to achieve your goals and objectives? Borrowing to invest must be beneficial for you and appropriate to your circumstances and risk profile. It's really only suitable for people who have surplus income and who understand the nature of growth assets such as shares and property, especially when the risks are exaggerated by gearing. You also need to be a disciplined borrower because of the temptation to spend the money that you have access to.

Assuming you are the right type of person to be taking out a home equity loan, and you definitely need to in order to reach your long term goals, then you are thinking along the right lines. By using your equity to invest in growth assets such as property or shares the interest repayments are tax deductible (as opposed to using the equity to buy non-appreciating assets such as a car, for example).

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