What Is Positive Carry?

By Kristi Waterworth – Updated Feb 26, 2025 at 2:33 PM EST

Key Points

Positive carry investing uses loans to fund investments for higher returns.
This strategy profits when earnings on an investment exceed the loan's cost.
It can amplify gains using borrowed funds but increases exposure to debt.

There are as many investing strategies as there are investors, although some are definitely more commonly used. A common investment strategy called "positive carry" can help you make more money without spending all your cash.

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Person pulling some cash from a leather wallet. — Image source: Getty Images.

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You just so happen to have a credit card with a 0% interest rate for the first year, so you decide to use that to buy the CD. Here, you're 5% ahead. If you had used your $100, you'd have earned only $5 with your CD. However, since you borrowed the money, you earned $50 from the CD instead.

It might not sound like much, but if it were $1,000 and $10,000, you'd have earned $50 versus $500. And the more you borrow (to a point), the more you stand to earn from using this investment strategy. Of course, borrowing more may increase your interest rate, so that's also important to figure into the calculation.

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About the Author

Kristi Waterworth has been a contributing real estate and financial expert at The Motley Fool, covering real estate, investing, and personal finance topics, since 2020. Kristi has been interviewed by various TV media outlets and podcasts for her real estate investing expertise – from residential real estate to digital real estate and everything in between. Kristi’s journalist career spans over 25 years, and she has written about real estate investing, homeownership, and home construction specifically for the last decade. She was also previously a licensed Realtor and general building contractor before the Great Recession and housing market collapse. She holds a bachelor’s degree in American history from Columbia College in Missouri.

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