Create wealth

Know your strategy and options

The first thing to be clear on is what your investment goals are and when you want to reach them. Setting a realistic timeframe can help you achieve your personal investment goals and stay focused.

Be honest about your risk tolerance. Do you want to play it safe or are you prepared to ride the ups and downs of the market? These are just some of the things you'll need to consider when preparing your investment plan.

For more information, visit MoneySmart.

What is equity?

Equity is the difference between what your home is worth today and how much you currently owe on it. For example, if your home is worth $400,000 and you owe $150,000, you have $250,000 in equity. Your equity may support further borrowings. Typically, many lenders allow you to borrow 80% of the value of your home without mortgage insurance. In this example, 80% of the property value is $320,000. Subtracting what is currently owed, $150,000 from the 80% of the property value $320,000 leaves $170,000 potentially available to go towards your investment purchase.

You may be able to borrow more than 80% of your home value if you are approved for mortgage insurance and if you can service the loan, however there are costs associated with this.

Case study

Case study: Investing in managed funds

Laurie has $170,000 that she wishes to invest for her long term wealth. After some research, including professional advice from a financial advisor, she decides to invest in both managed funds and direct shares to try and achieve her investment goals.

Account typePurposeLoan amountSecurity description Loan type
Laurie’s home valued @ $500,000
Loan 1Managed Funds $100,000Residential propertyVariable
Loan 2
Direct Shares$70,000Residential property Interest only
Investor account - Deposit dividends
- Simplify administration

Some things to note.

  • Simple structure.
  • Two separate loans (one for managed funds and other for direct shares).
  • Deposit dividends via Investor account.


Create a budget

The most important part of making your investment plan work is creating a practical budget. Sticking to your budget means you take full control of your finances and helps ensure you have enough money to pay your investment-related expenses such as repayments.

Here are some useful links for you.

  • Visit You and money for more information on how to plan and create an achievable budget.
  • You may also find our Budget Planner useful in helping you create your budget.

Any advice has been prepared without taking account of your objectives, financial situation or needs. BankVic cannot provide tax advice. Before acting on the advice you should consider whether the advice is appropriate for you. Investment and taxation advice should be sought from an experienced adviser. Our financial planners may be able to assist with investment advice. Before you make any decision to acquire any product or service you should obtain and consider the relevant Product Disclosure Statement available on our website, at a branch or by calling 13 63 73. As an AFSL holder, BankVic sells general insurance products under an agreement with Insurance Australia Limited ABN 11 000 016 722 AFSL 227681 trading as CGU Insurance. Terms, conditions, limits and exclusions apply. If you purchase insurance we will receive a commission that is a percentage of the premium. Fees and charges apply. Interest rates are variable and subject to change. Information on our terms & conditions, interest rates and fees & charges are available on request.

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