With a traditional savings plan, only the first year’s contribution benefits from the full 20 years of compound growth. Each subsequent contribution compounds for one year less — the second year for 19 years, the third for 18 years, and so on. As a result, the overall compounding effect is diluted over time, limiting total growth.

If you invest $5,200 per year for 20 years at an assumed annual return of 13% (with contributions made at the beginning of each year), your portfolio would grow to approximately:

Total value of savings plan: $421,200

Alternatively, instead of investing $5,200 annually, you could use that amount to cover the yearly interest on an investment loan and borrow $100,000 upfront for immediate investment. In this case, the full $100,000 participates in compound growth for the entire 20-year period.

After 20 years at a 13% annual return:

Total investment value: $1,153,000

After deducting:

$100,000 loan principal

$104,000 total interest paid over 20 years

Net gain from investment loan strategy: $949,000

Compared with the traditional savings approach:

Additional gain from leveraged strategy: $527,800

This example demonstrates how strategic leverage can significantly amplify long-term wealth accumulation when investment returns exceed borrowing costs. To explore whether a leveraged strategy is appropriate for your situation, contact us for a personalized consultation.We can design a tailored leveraged investment plan — incorporating investment loans and segregated funds — to help manage risk, protect capital, and enhance long-term growth potential.