When trying to decide how to increase your capital gains, many people look forward to the things they can do in addition to what they are currently invested in. Many people don’t consider and miss the opportunity to adequately and safely leverage the investments they currently have. Capital gains are, in essence, an increase in your equity while leveraging is the use of debt to facilitate that increase. Using these gains can be risky, but there are ways to leverage your equity in a smart way to minimize your exposure.
One option is to invest in short term investments.
You can take your gains and use it to borrow a matching amount, thus the debt portion of the equation. Put the combined sum into a short term investment vehicle and leave them there, not adding to any additional loss or taking out any gains to pay off the loan.
A second and much more common approach is to invest in real estate with your gains.
Taking your gains and sinking them into real estate within the time frame will allow you to avoid paying taxes on these types of gains. Limiting your investment to the amount equal to your capital gains ensures that you don’t lose more than you have earned. Borrowing against your original investment is not advised and as always, don’t invest more than you can afford to lose or borrow more than you can pay back. When in doubt, consult a professional to help you make better decisions when leveraging your capital gains.
Plenty of research is necessary to increase your wealth by leveraging your capital gains. Using a professional can be extremely helpful. Good investment choices will allow you to sit back and watch your wealth exponentially grow.