Also known as borrowing to invest. A way of obtaining additional funds to invest, with the hope of gaining significant returns in the longer term. There are three levels of gearing. These are positive, neutral and negative.
Insurance that pays benefits to you if you are unable to work due to illness or accident.
A charge to a borrower for the use of a lender’s money. For example, if money is borrowed from a bank to buy a house (mortgage loan), the bank will charge a percentage of the total borrowed as interest for the use of the money.
In this type of loan, a borrower will only pay interest for a limited and defined period during the life a loan. After this interest-only period ceases, repayments become higher as the life of the loan has not changed; the borrower will need to catch up on the repayments delayed during the interest only period.
An asset acquired with the intention of generating revenue over time.