How to Use Home Equity to Build Wealth

Wondering how to use home equity to build wealth?

Or what investments you can make using your HELOC funds?

When in need of investment/capital then a HELOC is one of the best choices. It allows you to tap into a home’s equity that would otherwise remain unused!

Plus they generally have lower interest rates than other forms of financing because it’s secured by your home. This also makes a HELOC one of the easiest ways of getting approved for a large sum of cash.

But as you know by now – investing always comes with some level of risk. Which is why you want to be especially mindful when considering how to put your HELOC funds to work…

Considering that the loan is secured by your home – you always want to put your money where it will hold or better yet – increase its value.

While some people will tell you it’s okay to spend the cash on a vacation or purchasing a new vehicle (even for business) – that’s not the best use when compared to other options because…

Those assets immediately depreciate! No value can be had from vacationing (other than relaxation & memories) and a new vehicle loses its value as soon as you drive off of the lot.

Tips on How to Use Home Equity to Build Wealth

Think how you can increase the value of your money. Ask yourself, “How could I use my HELOC funds to help me earn MORE money?”

1) Real Estate Investing 🏘️
Real estate investing is another popular way people use HELOCs, especially for portfolio diversification and generating passive income. We’ll go into more detail tomorrow about the benefits of real estate investing. Some popular REI strategies including: Flipping, Rehab, & Rentals.

Take Jen McFadyen’s duplex story for example…

“I reinvested money into my property to be able to pull out more money from the property. By putting in a little over $11,000 into improvements, and timing the market right, I was able to get the property reappraised for almost $100,000 more than I bought it for. This helped me reduce my monthly mortgage payments by $300/month and allowed me to take out a HELOC for $35,000. By doing this, I increased my investment by 3x and was able to take on a new project that continues to help me build my real estate portfolio.”

Now that’s a smart way to invest!

But what are some other smart ways to invest with your HELOC?

2) Put It Back Into Your Home 🏡Home improvement is one of the most common uses for a HELOC, especially if you’re preparing to sell. Or maybe you just want to make your house more comfortable to live in. A personal or home remodeling loan may work, but a HELOC can do it at a lower interest rate. By doing this you are building more equity into the home which is good because you’re using the current value of the home to further increase its value.

3) Metal Markets + Buying Physical Gold/Silver 🪙
Precious metals still have their place in an investor’s portfolio. There are many ways you can buy metals like gold, silver, platinum, and many good reasons why you should. Precious metals are one of the best ways to diversify your investment portfolio and hedge against inflation.

Although gold is the most common investment in the precious metals sector. Silver, platinum, and palladium are all commodities that can be added to your precious metals portfolio, each has its own unique risks and opportunities. When it comes to volatility, there are a number of factors that make these markets fluctuate, including supply, demand, and geopolitical issues. Gold tends to be the most stable. Silver, while more volatile, offers the most opportunities to increase your ROI. You don’t have to own just physical metals, you can also invest through the derivatives market, metal ETFs, mutual funds, and mining company stocks.

4) Growing/Starting a Business 🏢
As long as you’ve done proper market research and tested your business idea or your costs are relatively low – a HELOC can be a good way to get the capital you need to grow or launch your business. If you’re just starting out, we recommend an online business if possible since this is the best way to keep overhead costs as low as possible.

5) Investing in a Small Franchise or Food Truck 🍔
Did you know there are dozens and dozens of franchises that you can open for less than $50K? 

Want more freedom and customizability? Perhaps a mobile business like a food truck or mobile business (like home repairs or pet grooming) is more up your alley. For $50,000 to $100,000 you could own a used ‘food’ truck.

6) Invest In A Hobby That Earns You Side Income 🛠️
Do you collect antique furniture? Are you good at making or flipping furniture, fixing up old cars, or sewing? Own a power washer? Enjoy home improvement projects? Or painting homes? With a little cash, you could easily turn that hobby into another legitimate source of income.

7) Stocks  📈
Do you have good experience with trading forex or stocks? If so, why not use some of the funds to further expand your investment portfolio where your money can potentially grow in value. *We do NOT recommend this method if you do not already have some experience with playing the stock market.

Another advantage to using your HELOC to invest is the tax deductions. Remember, if the interest you’ve paid on your HELOC has been used specifically for business or home improvement purposes, it can be deducted on your tax return.

NOTE: Just be sure to keep track of all the investments, so it is easily defended if you are ever questioned.

Inside the Half Your Mortgage program we’ll show you how to find the right HELOC in your state, lock-in the best terms & rates, and how to manage and use it to pay off your home quickly, invest, consolidate debts and more.

Here’s what Simon, a recent student of ‘Half Your Mortgage’ said…

There are a multitude of ways that you can use your HELOC to earn more money. In tomorrow’s email we’ll discuss some of the benefits of investing in real estate with a HELOC. In the meantime…

Click the link to learn more about the Half Your Mortgage program.

Learn More About the Half Your Mortgage Program

Want to speak to one of our team members? We’re here to help…

You can also Book a FREE Discovery Call with Our Team to discuss how a HELOC can half your mortgage (whether it’s new or existing) we’ll run through the numbers with you using our proprietary software, see how much you’ll be saving in interest & determine YOUR EXACT PAYOFF DATE!

Your friends in finance,
Private Wealth Academy