# Teenager Wants to Start Investing!



## philworld (6 January 2013)

Hi everyone!

I am currently fifteen years old with around $10,000 of money I'm willing to invest.
I also have a weekly income of around $100~200.
How should I get started?
I do not have any financial commitments and don't earn enough to pay tax.

I want to start investing but am not sure on how to do so and where to start.
I wish to make low risk investments but I am willing to hear you guys out.
I am also open to suggestions outside of the stock market.

E.g. my dad said I could invest in a car space in the CBD.

Thanks for your time,

Philworld


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## cynic (6 January 2013)

philworld said:


> Hi everyone!
> 
> I am currently fifteen years old with around $10,000 of money I'm willing to invest.
> I also have a weekly income of around $100~200.
> ...




The last time I checked, Australian teenagers under the age of 18 were subject to income tax whenever their annual income exceeded $416. Has this changed in recent times?


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## So_Cynical (6 January 2013)

cynic said:


> The last time I checked, Australian teenagers under the age of 18 were subject to income tax whenever their annual income exceeded $416. Has this changed in recent times?




$100 to $200 a week, tax-free threshold $18,200...so Phil isn't paying tax.

http://www.ato.gov.au/individuals/content.aspx?doc=/content/00322113.htm


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## springhill (6 January 2013)

philworld said:


> I want to start investing but am not sure on how to do so and where to start.
> I wish to make low risk investments but I am willing to hear you guys out.
> I am also open to suggestions outside of the stock market.
> 
> ...




What kind of return are you looking for on your 10k?


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## So_Cynical (6 January 2013)

10K hey, strange as that's exactly the amount needed to open an IB account...just a coincidence or fate???

:


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## cynic (6 January 2013)

So_Cynical said:


> $100 to $200 a week, tax-free threshold $18,200...so Phil isn't paying tax.
> 
> http://www.ato.gov.au/individuals/content.aspx?doc=/content/00322113.htm




My current understanding is that those rates do not apply to minors.

http://www.ato.gov.au/individuals/content.aspx?doc=/content/20046.htm

Edit: Upon closer examination, it appears there have been some significant changes with regard to excepted income since I last examined this aspect of Australian Taxation.


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## philworld (6 January 2013)

So_Cynical said:


> 10K hey, strange as that's exactly the amount needed to open an IB account...just a coincidence or fate???
> 
> :




Sorry, not sure what your talking about. Did a quick google search. Are you talking about Interactive Brokers?



springhill said:


> What kind of return are you looking for on your 10k?




Something that makes more money than leaving it in the bank at a low risk. I also have time on my side and as I mentioned I don't have to spend any money.

Thanks again.


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## So_Cynical (6 January 2013)

philworld said:


> Sorry, not sure what your talking about. Did a quick google search. Are you talking about Interactive Brokers?




Yes sorry i was trying to be humorous, picturing dad opening a 10K account you can day trade with on your smart phone...just the start every new investor needs.


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## cynic (6 January 2013)

Unappealing as the current interest rates on offer by the banks are, I'd be reluctant to recommend anyone whom professes to be risk averse to invest elsewhere.

One only needs to peruse the ASF Storm thread to discover the likely outcome for those "risk averse" investors seeking higher returns.


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## burglar (6 January 2013)

philworld said:


> ... E.g. my dad said I could invest in a car space in the CBD....




I don't have a clue how to invest in a car space in the CBD 
(which financial vehicle does your dad recommend).

It sounds brilliant!

Maybe you could try a REIT 

Check out this thread:
https://www.aussiestockforums.com/forums/showthread.php?t=19776

Good luck!


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## burglar (6 January 2013)

One of the four big banks!

Here is a chart over 10 years for NAB National Australia Bank
compared to CBA Commonwealth Bank.


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## philworld (7 January 2013)

cynic said:


> Unappealing as the current interest rates on offer by the banks are, I'd be reluctant to recommend anyone whom professes to be risk averse to invest elsewhere.
> 
> One only needs to peruse the ASF Storm thread to discover the likely outcome for those "risk averse" investors seeking higher returns.




Thanks for your input! Could someone please link me to the thread or summarise why "risk averse" investors don't do well?
I'm also open to other ideas other than stocks as well though 



burglar said:


> I don't have a clue how to invest in a car space in the CBD
> (which financial vehicle does your dad recommend).
> 
> It sounds brilliant!
> ...




He says that buying a car parking space in the Melbourne CBD costs around 50-60k.
He says I could possibly negotiate with the banks on a 15% deposit and get a loan for the rest.
The car spaces are managed by a private company and you get majority of the money it generates.
Most, if not all, of this money will go to paying the bank.
He says that although the car spaces won't rise in prices dramatically, they won't drop and once it's paid off, it is a nice little source of safe, steady income.
He didn't go into specific numbers as he has a very vague understanding of how it works as well.

Thank you for your comment.



So_Cynical said:


> Yes sorry i was trying to be humorous, picturing dad opening a 10K account you can day trade with on your smart phone...just the start every new investor needs.




That sound pretty cool! What are the margins like for IB? Could someone in my situation realistically make some decent money from that?

Thanks!


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## cynic (7 January 2013)

philworld said:


> Thanks for your input! Could someone please link me to the thread or summarise why "risk averse" investors don't do well?
> I'm also open to other ideas other than stocks as well though
> 
> 
> ...




For a teenager you're displaying a remarkably high degree of financial/business literacy. 

The fact that you're a first time poster with nigh on impeccable grammar and spelling, leads me to suspect your sincerity. 

Furthermore, there seems to be a recurrent central theme regarding acquisition of car spaces with bank finance.

In relation to my comments about "risk aversion" ask yourself this question:

"If this is such a good risk free investment, then why are the banks willing to lend me the money, when they could simply make more money by buying the spaces themselves?"


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## burglar (7 January 2013)

cynic said:


> ... "If this is such a good risk free investment, then why are the banks willing to lend me the money, when they could simply make more money by buying the spaces themselves?"




@philworld
Some here will pull your leg because they believe you are a university student with a little too much time on your hands. (believe it or not, we get a lot of that !)

@cynic
The answer is that banks don't care where their profits come from.
If you default, they still get a car space!!


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## cynic (7 January 2013)

burglar said:


> @philworld
> Some here will pull your leg because they believe you are a university student with a little too much time on your hands. (believe it or not, we get a lot of that !)
> 
> @cynic
> ...




Well done, Burglar! Proceed to the top of the class.

Not only will the banks get the car space, they'll have also gotten it at a sizeable discount (due to investor deposit and profit from any loan repayments/fees actually paid).


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## philworld (7 January 2013)

cynic said:


> For a teenager you're displaying a remarkably high degree of financial/business literacy.
> 
> The fact that you're a first time poster with nigh on impeccable grammar and spelling, leads me to suspect your sincerity.
> 
> ...




Thanks alot. I like to tell myself this but it feel good to hear it from someone else.
I understand your concerns about the loan. But as I mentioned, and as far as I know,the value of the car space will not drop and the costs associated with purchasing and maintaining the car space are again, as far as I know, very low. Therefore, if I were no longer able to support the loan, the bank would simply sell off the car space not lose any money, and in addition to that, will have made some money from the interest.

Again, this is only a vague idea and the costs and risks associated with a purchase are thus still unclear to me.



cynic said:


> Well done, Burglar! Proceed to the top of the class.
> 
> Not only will the banks get the car space, they'll have also gotten it at a sizeable discount (due to investor deposit and profit from any loan repayments/fees actually paid).




This gets me a little excited.



burglar said:


> @philworld
> Some here will pull your leg because they believe you are a university student with a little too much time on your hands. (believe it or not, we get a lot of that !)
> 
> @cynic
> ...




Haha, well to clarify, I am in Year 11 this year.

Thanks for your comments, much appreciated.


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## prawn_86 (7 January 2013)

Firstly let me say well done for taking an interest in your financial future. I was about your age when i started taking an interest in investing. Just remember to have fun still in your youth, money isnt everything 

What makes you think a car park space wont decrease in value? Do you have any historical data as to what car park prices have done? What if a new building and/or car-park is built next to where you buy? How quickly can you sell it if you need to?

I had a quick look and most of the ones i could find in Melbourne return about 5 - 7% net. So if you have a loan then you are basically paying the bank just to hold onto it one you take your interest rate into account. It might be an OK investment if you had the spare cash, but i would think it is hard to get out of if you need to, and the returns are not spectacular


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## burglar (7 January 2013)

philworld said:


> ... Haha, well to clarify, I am in Year 11 this year. ...




Hi philworld,
Welcome to ASF!

My children want to inherit a sizable portfolio! 
But none wish to discuss shares or other wealth creation.
So I take delight in seeing young people have a go.

Most importantly, I'd like to see you survive.
"He who fights and runs away, lives to fight another day"!


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## FlyingFox (7 January 2013)

prawn_86 said:


> Firstly let me say well done for taking an interest in your financial future. I was about your age when i started taking an interest in investing. Just remember to have fun still in your youth, money isnt everything
> 
> What makes you think a car park space wont decrease in value? Do you have any historical data as to what car park prices have done? What if a new building and/or car-park is built next to where you buy? How quickly can you sell it if you need to?
> 
> I had a quick look and most of the ones i could find in Melbourne return about 5 - 7% net. So if you have a loan then you are basically paying the bank just to hold onto it one you take your interest rate into account. It might be an OK investment if you had the spare cash, but i would think it is hard to get out of if you need to, and the returns are not spectacular





+1. Do not assume that prices will only increase or stay the same. That is what risk is, hence no such thing as a risk free lunch.

Also read above. Your basically getting a 1-2% return (if that) for something that may or maynot even hold it's value.

But Good on you for thinking about your financial future. Hope you go a long way.


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## FlyingFox (7 January 2013)

burglar said:


> .....
> Most importantly, I'd like to see you survive.
> "He who fights and runs away, lives to fight another day"!





+10. Words to live by.


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## philworld (7 January 2013)

prawn_86 said:


> Firstly let me say,  well done for taking an interest in your financial future. I was about your age when i started taking an interest in investing. Just remember to have fun still in your youth, money isnt everything
> 
> What makes you think a car park space wont decrease in value? Do you have any historical data as to what car park prices have done? What if a new building and/or car-park is built next to where you buy? How quickly can you sell it if you need to?
> 
> I had a quick look and most of the ones i could find in Melbourne return about 5 - 7% net. So if you have a loan then you are basically paying the bank just to hold onto it one you take your interest rate into account. It might be an OK investment if you had the spare cash, but i would think it is hard to get out of if you need to, and the returns are not spectacular




Hi and thank you 
I understand your concerns.
I would need to do more research. 
I don't want to stick extra money onto the loan each month though. I want the investment to mostly sort itself out financially once I get started.
Would you guys have any other idea on your mind that may suit my situation?



burglar said:


> Hi philworld,
> Welcome to ASF!
> 
> My children want to inherit a sizable portfolio!
> ...




You would've heard the same stuff before but,  everyone is different. 

Thanks everyone again for your support. This is my first time on a forum of educated people and it feels good to be able to talk about something without need rage and the etc.


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## burglar (7 January 2013)

philworld said:


> Would you guys have any other idea on your mind that may suit my situation?




Index shares!!

You can buy index shares while you decide. 
They follow the index (a collection of blue chip companies) of your choosing. 

E.g. 
ASX200, top 200 companies on the ASX
or
ASX20, top 20 companies on the ASX


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## FlyingFox (7 January 2013)

philworld said:


> Hi and thank you
> Would you guys have any other idea on your mind that may suit my situation?





Why not take the opportunity to think about risk vs reward etc and investing in general. 

You have X amount to start of with. How much of that are you happy to risk? e.g by buying shares property etc. What are your rewards for it?

How much do you want to preserve? Put that in a bank account with good savings rates. Ofcourse there are consequences of this as well i.e inflation. 

Also what levels of risk... blue chips with dividends, small caps or stocks which may make a lot of capitol gain.

How would you like to balance all that?

+1 to burgular


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## YMI (7 January 2013)

Hi Phil 
Not meant to be an advice but from my own experience…

My mom was a huge fan of investing money in houses and properties and I owned a house from the age of 9 or 10, can’t remember… hang on, the house was managed by my parents and owned by the bank. IMO banks don’t want you to become insolvent, their business is money not houses nor other businesses or even car parks. What they really want is that you pay interest for a looong time.

To cut a long story short after some 15 years the house was paid off, incl. the bank interest I calculated that about 50% was paid by my parents and 50% by myself and the final price was about 200% - in other words, the bank earned the value of the initial price in cash.

Some years ago the estate market worsened in the region and I sold it for about 60% of the value it had five years earlier. The car parking space may not decrease that much in value (although you never know as prawn86 mentioned) but as I understand from your financial situation, you would need to give all earnings to the bank, maybe even more and that would be a shame.

I would try to find something where I am involved, I make the decisions and I can afford it and not depending on the bank too much. Stock market could be an option if you’re prepared to learn a little about how it works first. A good thing is to test your trading skills with a ‘realistic’ virtual trading account, so you don’t risk any actual money and if you start getting successful after half a year or so you can invest real money. Optionsxpress offer a free virtual account, however it’s for US equities only.

Another idea would be to invest in funds instead, that is perhaps less risky. Or the index shares burglar mentioned. One strange thing I noticed but don’t take my word for it, the graphs of the S&P/ASX 200 and S&P500 look very similar but what happens to the S&P5oo seems to be a few hours earlier most of the time because it’s US – could that be an advantage?

Good luck!


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## sydboy007 (7 January 2013)

ETS are a good option.  fairly cheap in terms of management expenses and they provide a good form of diversification

I've used a couple of ishares ETFs in my SMSF

IOO - global 100 companies

IDH - high dividend shares.  Limits 20% to any sector and 4% to any share, so it should be less concentrated in the financial stocks compared to a lot of other high yield funds.

I'd also say having a weekly stocks night could be good.  Drinks and pizza.  Agree to pick 1 or 2 stocks you are thinking about.  Give the reasons why you think it's a good investment.  Could also maybe have a competition where you can invest 50K.  See how the investments pan out over the year.  Some practice before risking real money could cut down on costly mistakes.  Minimising loses is far more important than maximising profits.  if you loose 20% of your capital you have to make a 25% gain just to get back to where you were.

Could be good to enforce a rational approach to investing.  Do I sell when the shares have fallen?  Why do I want to sell?  Is my original reason for investing still valid.  If yes then hold your nerve, if no then sell.

These are skills I had wished I had learned a couple of decades ago.


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## philworld (7 January 2013)

burglar said:


> Index shares!!
> 
> You can buy index shares while you decide.
> They follow the index (a collection of blue chip companies) of your choosing.
> ...




My main concern with this is my lack of knowledge.
I did play that stock market game and ended up with a portfolio worth something like 52k (from 50k after 10 weeks)
EDIT:The game seems to continue after it is finished? My portfolio is now worth 55k
Code 	Holding 	Current value 	Current price
AMC 	400 	$3,228.00 	$8.07
SHL 	300 	$3,999.00 	$13.33
WES 	300 	$11,055.00 	$36.85
CPU 	400 	$3,596.00 	$8.99
CSL 	150 	$8,085.00 	$53.90
COH 	150 	$11,865.00 	$79.10
AMP 	450 	$2,164.50 	$4.81
NWS 	300 	$7,350.00 	$24.50
CRZ 	400 	$2,936.00 	$7.34
That was pretty fluky and  I just bought the ones that looked alright to me



FlyingFox said:


> How would you like to balance all that?




I do not need ANY liquid funds.
I want to put my money somewhere where it will take care of itself at a low risk and I am willing to sacrifice some reward for that piece of mind. (For some reason I stress a lot and I already have more white hairs than both my parents added together)
This doesn't mean however I am not willing to put in the work.

I am also happy to set up a fix term deposit in the bank but I'm sure there are other options that can grow my wealth more substantially with low risk. 



YMI said:


> Hi Phil
> Not meant to be an advice but from my own experience…
> 
> My mom was a huge fan of investing money in houses and properties and I owned a house from the age of 9 or 10, can’t remember… hang on, the house was managed by my parents and owned by the bank. IMO banks don’t want you to become insolvent, their business is money not houses nor other businesses or even car parks. What they really want is that you pay interest for a looong time.
> ...




My dad has talked to me about buying me an apartment but I would need at least $20,000 for the deposit.
Should I just save up and buy one of those?
It seems like a good investment to me as because of how cheap the house is, it would be able to get pretty good rent meaning I don't have to stick too much extra onto the loan. In this case I wouldn't mind paying the extra money because houses ALWAYS rise in price (in the long run at least).

I like the idea of virtual trading. But I am lost on how I can educate myself on the subject. I am also coming up to VCE and may or may not have enough time or effort to make this happen.

Thanks for your responses.


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## FlyingFox (7 January 2013)

philworld said:


> My dad has talked to me about buying me an apartment but I would need at least $20,000 for the deposit.
> Should I just save up and buy one of those?
> It seems like a good investment to me as because of how cheap the house is, it would be able to get pretty good rent meaning I don't have to stick too much extra onto the loan. In this case I wouldn't mind paying the extra money because houses ALWAYS rise in price (in the long run at least).




I could attach the charts for you but I am lazy. 

Google UK property prices  
Google US property prices

Last but my fav Google Japan property prices

Bet you they were saying that in Tokyo in 1989. 15 years is a long time.


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## George Washingto (7 January 2013)

philworld said:


> In this case I wouldn't mind paying the extra money because houses ALWAYS rise in price (in the long run at least).




Might want to rethink this statement, this is most definitely not always the case.



> I like the idea of virtual trading. But I am lost on how I can educate myself on the subject. I am also coming up to VCE and may or may not have enough time or effort to make this happen.
> 
> Thanks for your responses.




In my opinion, the best way for you to start educating yourself would be to spend some of that money buying some good, conservative investment books. Good places to start:

Common Stocks and Uncommon Profits.
The Intelligent Investor.
One Up on Wall Street.

Another excellent free resource available on the internet are the Annual Reports written by Warren Buffett for his company Berkshire Hathaway. 

This should give you a good grounding, and illustrate the importance of investing long term, in good quality companies and the differences between 'trading' (speculating, gambling) and investing.

Also, keep in mind that anything that involves leverage (i.e a loan) will both magnify your potential returns and potential losses. The bigger the loan, the bigger the increase in risk. I.e having a $50,000 loan on a single car park is hugely risky in my opinion. You are highly leveraged into a singular asset, that is located in one precise location and it comprises 100% of your portfolio.


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## philworld (7 January 2013)

FlyingFox said:


> I could attach the charts for you but I am lazy.
> 
> Google UK property prices
> Google US property prices
> ...




Sorry if I offended you with my statement. I was trying to make a point that in SE Melbourne, an apartment like that is UNLIKELY to depreciate in the long run. I was being too general and exaggerated.

EDIT: However my dad did bring to my attention that in the future when apartments are going to be more popular with larger families, the demand for these small one/two bedroom apartments may be significantly lower.
And we have seen what has happened with the flooding of all the inner city apartments in Melbourne. (too many apartments settling around the same time, too much supply > insufficient demand > suppressed prices)

But thanks for pointing out my mistake 



George Washingto said:


> Might want to rethink this statement, this is most definitely not always the case.
> 
> 
> 
> ...




I will look into those sources, thanks a lot.
You seem to have a good point about the loan but what are the risks? Can't I just sell it (not as easy as said that done of course)? Isn't that just like someone spending all their money on a house except I am under a lot less financial pressure and the asset doesn't appreciate much(if at all)?
Again, I assume I am nowhere near as educated as any of you in this area so please do not take any offense from what I say.
I am here to learn 

Thanks


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## George Washingto (7 January 2013)

philworld said:


> I will look into those sources, thanks a lot.
> You seem to have a good point about the loan but what are the risks? Can't I just sell it (not as easy as said that done of course)? Isn't that just like someone spending all their money on a house except I am under a lot less financial pressure and the asset doesn't appreciate much(if at all)?
> Again, I assume I am nowhere near as educated as any of you in this area so please do not take any offense from what I say.
> I am here to learn
> ...




A hypothetical situation to illustrate risks:

Buy 60k car park. 10k savings 50k loan.

In a year demand for car parks in that location significantly declines and the car park stops generating income.

Car park now worth 30k.

Sell and use money to pay off loan.

You are now left with no savings, no car park and 20k worth of debt.

So, you can see that leveraging/taking on debt in this case removes the ability to just sell the asset and move on.


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## philworld (7 January 2013)

George Washingto said:


> A hypothetical situation to illustrate risks:
> 
> Buy 60k car park. 10k savings 50k loan.
> 
> ...




Thanks for your patience.

I understand what you mean now .


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## YMI (7 January 2013)

philworld said:


> ...I wouldn't mind paying the extra money because houses ALWAYS rise in price (in the long run at least).
> 
> I like the idea of virtual trading. But I am lost on how I can educate myself on the subject. I am also coming up to VCE and may or may not have enough time or effort to make this happen.
> 
> Thanks for your responses.



You're welcome
I like your optimism unfortunately the 'ALWAYS rise in price' wasn’t true in my case but the reason why the value of houses declined in my region was foreseeable and it happened over years but I was young(no experience) and my mom had exactly the same opinion that houses always rise in value and she kept saying 'the prices will recover soon...' but I do actually think investing in real estate is one of the better ideas and lower in risk. However, I also think it’s important that a fair portion of the price can be paid with your current savings. If you’re going to rent the place out IMO the rent earnings should be high enough to pay the mortgage rates and any extra money you earn can be used to pay off the loan even quicker. Perhaps your parents are willing to borrow you some money interest free

Stock market is probably not a good idea if you just pick some random stocks and bet your money on them. You need to understand/learn reasons and situations why and when investors buy shares or sell – and that is hard to know, I am still trying to figure it out.

Real estate market is somewhat similar I think, not quite as hard to understand maybe. For example the house you want to buy has no shopping centre nearby but for some reason you believe that they’re going to build one in near future – that can increase the value. Or a run-down house in a rich area is perhaps cheap to buy, then renovate it and sell for three times the price. A negative example would be if they’re planning a rubbish tip close to it or a freeway right next to it.


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## George Washingto (7 January 2013)

philworld said:


> Thanks for your patience.
> 
> I understand what you mean now .




For what it's worth, I believe the best course of action here would be to find an Australian index fund with the lowest fees tracking the ASX200 or 300 etc, reinvest dividends and leave it long term (10 years at least ideally).

However, don't let other people tell you what to do, you should research and come to a conclusion yourself.


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## burglar (7 January 2013)

sydboy007 said:


> ... Minimising *loses* is far more important than maximising profits.  if you *loose* ...




Normally I am not a "spelling Nazi"  ... but for the most important of words!! 
"Losses" is not the same as "Loses" and
"Lose" is not the same as "Loose".
I have no loose change, I lost it playing two-up! You dig!:

As you were!


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## Julia (7 January 2013)

philworld said:


> Could someone please link me to the thread or summarise why "risk averse" investors don't do well?



Here is the Storm Financial thread.
https://www.aussiestockforums.com/forums/showthread.php?t=13176&highlight=Storm+Financial
If you read through this, you will see the havoc that can occur as a result of leverage.
If you believe the people who went along with this stuff, they were sold it as a safe, low risk scheme.
They said they were risk averse.
It's hard to see how anyone who is risk averse would be prepared to borrow against their home to buy into the sharemarket, then leverage up again by taking out a margin loan on the shares purchased with that borrowed money.

So it's not so much a matter of "why risk averse investors don't do well" but surely if you defined yourself as risk averse (meaning you are not comfortable with risk) you'd hardly do as described above.

On that, in one of your later posts you mention that you stress easily.  Think about how you will feel if you buy a bunch of shares, using your own money plus what you have borrowed, there is another sharp fall in the market and the value of your shares drops by anything up to 50% in a short time.

Ask yourself how you would feel and what would be the actual financial results of such a situation.

Congratulations on your polite approach.  It's difficult to ask the 'right' questions when you don't know what you don't know.  So far, imo you're doing well.


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## burglar (7 January 2013)

burglar said:


> Normally I am not a "spelling Nazi"  ... but for the most important of words!!
> "Losses" is not the same as "Loses" and
> "Lose" is not the same as "Loose".
> I have no loose change, I lost it playing two-up! You dig!:
> ...




Sorry I was terse, just returned from a funeral !!

Life is short.


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## Sir Osisofliver (8 January 2013)

Hi Phil!

Here's some info (i'm in a rush so dot points it is...)

Read the thread in my signature
Right now you have an awareness that you don't know much - seek to change that BEFORE you risk capital
Know thyself - how risk averse is "Risk Averse" your level of risk aversion will change with knowledge and experience.
What's the plan?  Without a plan you plan to fail.... find a measureable goal and time period.
Know that you are on a journey that will last you the rest of your life,  enjoy it


Cheers

Sir O


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## odds-on (8 January 2013)

Hi Philworld,

Have you thought about alternative investments? E.g.Art, stamps, classic cars...

Have you thought about running your own little business? E.g. Delivery routes,  lawn mowing, burger van at sports events..

A friend of mine made a nice income on the side selling antiques on ebay. He specialised in a specific area and selling to the US market. 

Cheers


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## philworld (8 January 2013)

Sir Osisofliver said:


> Hi Phil!
> 
> Here's some info (i'm in a rush so dot points it is...)
> 
> ...




Hi Sir O, thanks for your time.

Your thread was actually one of the first I visited. I will swim through the sea of knowledge gradually . Thanks.

I agree that I lack knowledge and I appreciate the fact you have read my comments to come to this conclusion(I'm assuming you did). I will do my homework and ask others for help., thanks for your advice

I do not have a clear cut plan as of now. However my goal is to have an investment set up by the end of the year. The plan is to make it a long term (around 10 years or more) investment. I am willing to stick extra money in if need be.

Thanks again for your help.




odds-on said:


> Hi Philworld,
> 
> Have you thought about alternative investments? E.g.Art, stamps, classic cars...
> 
> ...




Hi!
I have certainly though about the eBay business. I am still looking for products I could possible sell and It is something that I am interested in doing. However I do understand that this can be quite time consuming and isn't very easy to operate.
I know a 16 year old who sells barbeques on eBay and makes $300 (profit) a week.
I know it can be done.
But I personally believe it is about finding the right product and that is where I am having trouble.

This is something that is much closer to me and seems a lot more realistic. I can also get a lot more direct help from my dad (business man). 

Would anyone have any ideas?

Thanks again and sorry about my delayed reply.

EDIT: spelling/grammar


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## burglar (8 January 2013)

philworld said:


> ... Thanks again and sorry about my delayed reply.




Don't be sorry ... you are in the beginners lounge. There are no stupid questions here and there are no deadlines.




philworld said:


> ... Would anyone have any ideas? ...





https://www.aussiestockforums.com/forums/showthread.php?t=25573&p=733940#post733940


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## philworld (8 January 2013)

burglar said:


> Don't be sorry ... you are in the beginners lounge. There are no stupid questions here and there are no deadlines.
> 
> 
> 
> ...




You know, I wish I could sit down with some of you people and just breathe knowledge for an hour or two. I always find it almost "exciting" listening in on my dad's business meetings or during negotiations/talks. Hope you don't mind me slipping that post into my stash of quotes.


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## burglar (8 January 2013)

philworld said:


> You know, I wish I could sit down with some of you people and just breathe knowledge for an hour or two. I always find it almost "exciting" listening in on my dad's business meetings or during negotiations/talks. Hope you don't mind me slipping that post into my stash of quotes.




You are most welcome, ...

I would prefer you wrote your own and ...


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## TMC93 (10 January 2013)

Just put in my few points, I would never make a "set and forget" investment, the main reason for me is I don't find monitoring my investments a chore like some people do, I actually enjoy it. I am always seeking new ways of getting my money to work harder for me, like for instance 2 years ago I was at a single malt tasting and one of the guys there started a whisky portfolio a few years back and to date his return is over 400% on outlay. Ever since I have been collecting scotch and have seen returns in 3 digits (doubt it will be the same for 10+ years) Good news about scotch is if it doesn't go up you can still drink them! Sorry getting sidetracked, if you are really interested in shares now is either a great time to buy or a bad time to buy, depends if which way you look at it. When I was 17 I traded shares under my mothers name and managed to half my $6000 (which felt like a million back then) in about 3 months. I learnt a lot about those three months including listen but don't believe a thing people say, make your own judgement.

I think you have right idea about capital preservation, at the moment a term deposit with one of the big banks is probably only going to give you a small profit after you take in inflation. I bought my first house at 19 and I know how hard it was for me to get a loan because of my age, even though I had a 20% deposit and a managerial job in a well established company. 

One of the things I think you should also look at is if you are working and have a super account, the government will match extra co teibutions up to $500 I think it is now, play around with a super calculator and you will be pleasantly surprised what $25-$50 a week extra will have on your final balance, considering you'll probably love to 100+.

Anyway food for though


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## ParleVouFrancois (10 January 2013)

@ TMC93 A mate and I have an ongoing joke about investing, he is always joking around that I should be spending my time investigating scotch whiskey investments rather than the sharemarket. According to this he might not have been too far from the mark: 

http://au.pfinance.yahoo.com/educat.../scotch-whisky-a-better-investment-than-gold/

@philworld The super co-contributions is a great way to multiply your money without any special expertise/hard yakka. I have been chucking in the 1 grand every year for the past 4 and a bit years, plus the compulsory 9% has added up to over 17 thousand dollars. I would prioritize putting cash into this to claim the maxmimum amount, over learning how to invest in the sharemarket/realestate market. I have also set my super fund to 100% be in bonds, over every single period since inception (including the GFC, greek/euro crisis) it has returned 5-7% which is relatively boring when taken alone but very much worth it when taken in conjunction with the 100% instant return you get from the government (this juices up the return on your invested capital to 10-14% very low risk). Back when I started contributing while working at KFC the government gave you 150% of your contribution up to 1000 dollars, since reduced to matched 1 for 1 for the 1000 dollars.  You don't have to have a job/taxable income in order to claim this bonus from the government so it's a win/win starter investment. It's a good place to start building a base of assets.

http://www.ato.gov.au/individuals/content.aspx?doc=/content/42616.htm

Another MAJOR tip I'd give you is to not buy a car in highschool/university and to instead save the money. If your parents feel it is their obligation to give you a car for university insist on receiving cash instead to invest/save. Even if you buy a cheapie 3-5 thousand dollar car it'll add up for petrol/insurance/maintenance, when you're just starting out every single dollar counts so much more.

If you're getting 'interested' in shares and the sharemarket invest in a copy of Warren Buffets biography "The Snowball" and read Benajamin Graham's "The Intelligent Investor" then continue onto "Security Analysis". IF you can manage to smash all those out you'll learn the majority of what fundamental investing is all about.


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## philworld (10 January 2013)

@TMC93
It's more your hobby than your investment I'm assuming? However, I think It's really cool that you are making money from doing something you are passionate about!

I like the idea of the extra super contribution and taking advantage of what the government has to offer, but honestly, I don't like the idea of storing the money away for a period of time that seems like an ETERNITY to me. Of course this is probably because I am young and foolish.

@ParleVouFrancois
My mum is really excited about me driving (getting my license this month (provided that I pass the test(Are multiple brackets grammatically correct?))).
She probably WILL get me a car.

I believe you are right. My grandpa bought a car for $800 and insurance + fuel + rego etc costs much more than $800 every year.

Thanks a lot for your advice though.
____________________________________

On another note, I have been thinking these couple days about another way I could make some cash.
About ten years about when we first came to Australia, my dad negotiated a deal with an Aussie man for a few containers of toilet paper dispensers, letter boxes, etc and I was the 6 year old interpreter(my dad knew 0 English and basically is still about the same).

Last night I remembered about this and started talking about it with my dad. I asked him what happened with that order in the end, if we made any money, etc etc.

Turns out that we did make some money.

He also mentioned that we STILL have the molds for the products in China and it would still be 100% viable to make them.
There is nothing proprietary about the products and it isn't branded (however this could be an option).
They are just plain, ordinary, pieces of metal.

I know for sure that we can still get manufacturers in China and we are also able to pay after we receive money.
We are also able to ship our products out on containers WEEKLY.

The only problem that I am facing is I don't know how to find a customer.
Do I just contact distributors in Australia?
How do I even find them?
I also lack knowledge of the market.
We would make revenue of under or around 30%.

Could you guys tell me what you think about this?
Could It work?

Thanks,

Philworld


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## FlyingFox (10 January 2013)

philworld said:


> @TMC93
> It's more your hobby than your investment I'm assuming? However, I think It's really cool that you are making money from doing something you are passionate about!
> 
> I like the idea of the extra super contribution and taking advantage of what the government has to offer, but honestly, I don't like the idea of storing the money away for a period of time that seems like an ETERNITY to me. Of course this is probably because I am young and foolish.
> ...





Hi Phil,

While import/export is a good way to make money, it's not as simple as it seems and can be very competitive. Basically you need to be compliant to any Oz standard if applicable, you will almost certainly under estimate costs. 

Also your customer may not pay you up front (or at all) and if you don't sell from the ship/wharf storage and distribution costs can be quite high eating into any profit.

My suggestion is to to avoid it unless you know what you are doing, have deep pockets or are really planning on starting a business. Also you will need to have good reputation which takes time to build. Difficult to do this part time if you get my gist unless you are looking at niche markets.

Also some advise which you may or may not like. You are what 15? Don't get too worked up about making money, you'll burn your self out. Have some fun!


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## philworld (10 January 2013)

FlyingFox said:


> Hi Phil,
> 
> While import/export is a good way to make money, it's not as simple as it seems and can be very competitive. Basically you need to be compliant to any Oz standard if applicable, you will almost certainly under estimate costs.
> 
> ...




It was compliant 10 years ago, not sure now, but I'm assuming it is or isn't far off.
We are able to actually keep stock AT the wharf in China.
I understand that my situation isn't optimal because I can't dive in but it is just an idea.
To compensate for my lack of reputation I am willing to not take a deposit.
Is it enough? I don't know but I have my doubts.
And your right, this is DEFINITELY not a niche and people WILL probably kick my ass.

Yes I'm turning 16 soon. I do like that advice =]. I'm by no means "obsessed" with making money or with money. I just have interest in the finance and business world and have come to see what I could possibly do with my money. I honestly do have problems socializing with people my age, most of my friends are older than me... or do I just have problems socializing?.. haha don't really know. But yeah, I'm trying to not care as much and just lose a bit of tension but I just can't relate to most people.

Thanks again.


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## McLovin (10 January 2013)

I used to sell *ahem* adult movies when I was in high school. $75/video. The interwebs has probably killed that industry off though. Made a killing and much easier than shipping things in from China!


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## philworld (10 January 2013)

McLovin said:


> I used to sell *ahem* adult movies when I was in high school. $75/video. The interwebs has probably killed that industry off though. Made a killing and much easier than shipping things in from China!




supply and demand... supply and demand...but $75?!?!? Who were your customers? Kids at school? Thats some big money


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## Julia (10 January 2013)

McLovin said:


> I used to sell *ahem* adult movies when I was in high school. $75/video. The interwebs has probably killed that industry off though. Made a killing and much easier than shipping things in from China!



 Well, who'd have thought it, McLovin.  Enterprising little chap, weren't you!


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## white_goodman (10 January 2013)

philworld said:


> supply and demand... supply and demand...but $75?!?!? Who were your customers? Kids at school? Thats some big money




year 7 and 8 kids... had someone similar at our school... (the 'pornking')


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## McLovin (10 January 2013)

philworld said:


> supply and demand... supply and demand...but $75?!?!? Who were your customers? Kids at school? Thats some big money




I believe it's what economists call inelastic demand. 



Julia said:


> Well, who'd have thought it, McLovin.  Enterprising little chap, weren't you!




Don't worry Julia, not all my businesses were as "blue". When I was six I used to make friendship bracelets and sell them at after school care, by ten I was selling about $100/day worth of lollies. When the principal shut me down, I called her communist, which went down well.

I like small little businesses for something to do on the side. I still do it, now I buy and sell bikes and bike parts. For something that started completely by accident (a bike frame was too big for me so I had to sell it) it's surprisingly profitable, especially with all the hipsters wanting fixies. When I came back from overseas a couple of years ago, unemployed, I bought a pizza place that was struggling and "restructed" it ("gourmet" pizzas, free home delivery, really basic stuff that works) then sold it. It was private equity on a micro scale!


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## Julia (11 January 2013)

I'm reassured we're not likely to be reading about you as head of some dubious enterprise, McLovin.
Admire your entrepreneurial capacity.


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## hotchy (11 January 2013)

philworld said:


> Hi everyone!
> 
> I am currently fifteen years old
> 
> Philworld




Can a 15 year old get a loan? Trade shares?


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## DJG (11 January 2013)

So_Cynical said:


> 10K hey, strange as that's exactly the amount needed to open an IB account...just a coincidence or fate???
> 
> :




The required minimum on IB for individuals aged 26 or younger is $3,000 going by the website. Is this for only US residents?

-------

You'd need to trade under your parents name Phil until you're 18.

I'll be watching this thread


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## stewiejp (12 January 2013)

Phil,

Firstly good on you for taking a healthy interest in your financial future. If you are interested in shares, I'd whack the whole $10k in a high interest online savings account while you read up about the pros and cons of the stock market. At least then you are earning 4 or 5% while you learn. 

As noted previously, you would have to trade under mum or dad's name until you turn 18, and they would have to pay any taxes earned on dividends, though this shouldn't put you (or them) off.
Do a bit of "Googling" and read some good books, including Sir O's thread mentioned previously. Then read it again, take notes on the info which would help you.

Decide on a strategy. If your current net worth is $10k, do you want to put the whole lot into the market? You are turning 16 soon, and I'd guess you'll be looking at cars soon... they can get expensive - not just buying one but running the thing as well... with cars come girls - you thought cars were expensive! 

What I'm getting at is the stock market should (IMO) be looked at as a long term venture, and it can be bad to put your money in and then want to withdraw in a year or two - the whole lot because you've found a car, or met someone special.

Lets say after you do a bit of reading, talk to Dad about it all, and make some more contributions to your $10k, it's grown to 12... One option may be to keep $4k in the bank, and invest the $8k. Re invest the dividends into whatever stock you think is the goods, and try to add amounts from your income as you go.

A strategy I often recommend to people starting out is to sign up to a broker of your choice. CBA offers 12 free trades within 3 months ($20 thereafter), NAB has just launched a new platform offering 20 free trades over 3 months ($15 or 16 thereafter). Minimum purchase $500 bundles, which could work, but are generally not worth it when you start paying brokerage. There are others out there - Bendigo I know does it as well as some online brokers such as Bell and CMC. They all have their own pros and cons. Going with a bank broker your Dad banks with MAY have a benefit. 

Pick your shares - do your own research and make your own decisions. Banks are generally regarded as safe, as are some of the bigger LIC's. In my opinion, you are best off having a decent % of your total investment in "safer' stocks before you even contemplate "day trading" or taking on a bigger risk. If you sign up with a broker with free trades as a start up bonus, plan what you are going to invest in in advance, and create a strategy to do it. There's no rush - try to look at this as a long term strategy which will help you immensely in your financial future.

Most importantly, take your time - read up all the information you can, And have fun. The market WILL rise and it WILL fall - don't get freaked out by this, you still own the shares. 

Stew.


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## burglar (12 January 2013)

stewiejp said:


> ... And have fun. ...



stewiejp,

I like your post, particularly this bit!
So easy to forget during a crisis.

Win, lose or draw; I love sharetrading!


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## bailx (6 February 2013)

philworld said:


> Hi everyone!
> 
> I am currently fifteen years old with around $10,000 of money I'm willing to invest.
> I also have a weekly income of around $100~200.
> ...




Congadulations on 10K starting points. Investing can be a risky business if you don't know how to go about it or were to start. 10k can go a long only invested in any place or market. Fx Options are always a choice for capital investments, as I have learnt.  How ever investing in stocks you want to be flexible and on top of your profit compound.  Blue chips are good and all, but your profit compound may be limited.
As you may well know investing in stocks needs a good scanning system to find the stocks you need. A portfolio etc. may I recommend to that you that you purchase and become a member of Equity Smart. As a friend a fellow investor whom uses Equity Smart, can safely tell you its a *Win Win*. Other programmed  software that cost thousands and are hype full of swing. Equity Smart will cost you a few hundred dollars members and 45 dollars a month data. And you get the lot. The best system you could ever use, given you have the integrity to trade as a  Investor and not  a Amateur . Excellent choice to start of big and trade the ASX low capped market for extra returns and massive results.

http://www.equitysmart.com.au/


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## ganoric (6 February 2013)

There is so much to learn if you start trading - and it may be wise to do it with the support of paid advice - there are many companies that provide advice in trading options, CFDs, shares, FX, commodities and while it is possible to trade in demo accounts, the real learning comes with trading with real money - although in amounts small enough to pay for the learning without doing too much damage at the start to the funds.

Regarding car space rental ... I found this (and you will be able to locate it easily) ... It confirms the comparison to leaving your money in the bank ... and the info is tainted by being provided by the person who benefits.



Car Parking Spaces 

The mounting scarcity of car parking spaces in Sydney and Melbourne is giving quite a boost to the niche investment parking space market. 

Brett M...., joint CEO of S.... Parking, which operates and manages around 180 car parks around Australia, says that some parking spaces in Sydney CBD have sold upwards of $80,000. The average cost of one in Kings Cross or Ultimo would be $50,000. 

Sold through real estate agents, car park spaces give a consistent return of 6.0% to 8%,the rents are usually indexed to inflation (handy if high inflation hits) are fully managed, and would usually be managed by a reputable operator on long leases.

Capital Growth is usually tied to the rental increase. In other words, if rents go up 4% per annum, that is you capital growth.

In Melbourne, expect to pay anywhre between $35,000 to 70,000 for a well located, high yielding space.

But they are very safe and secure, and it is sure better than leaving your money in the bank! 

Newer car parks, in desigbnated office buildings, will be easier to manage and will give higher returns than private car parks offered by individuals in residential buildings


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## bailx (6 February 2013)

Don't park there get a Education and do what you want?!!!!!!!!!!!!!!!!!!!!


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## ganoric (9 February 2013)

Hi Phil,

You do have the option of learning how to be a trader and manage your risk, assuming this is something you will find challenging and interesting, and you have the time.

The car space idea is one of a many possibilities - but this one locks up your money, is very hard to change to another finanical strategy, has the lowest level of diversification, even the most optimistic figures look barely attractive, and not without risk, and is not free of complications and paperwork and ongoing costs, and it is useful to factor in cost of time for office duties and protecting and assessing your investment.

My daughter is learning how to trade options, forex, local CFDs, foreign CFDs, and shares, in the hope of being freer to leave her normal job and to work from home while being a new mum, while her beloved partner continues with his satisfying job.  There will be times of conflict of interest in how she spends her time, and gets help from baby sitters, but she believes it is a viable plan, and one she feels will be satisfying, gives her an intellectually challenging life, and places her in a community of fellow learners and practitioners.


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## bailx (10 February 2013)

bailx said:


> Don't park there get a Education and do what you want?!!!!!!!!!!!!!!!!!!!!




Put 2-5 K into a FX & Binary Opions trader, Find a Broker. Play and learn the market. Don't Lose, that's Imposable! Invest 5 k into Equity Smart. Done right You are a very rich man.................


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## philworld (10 February 2013)

First of all I would like to apologize for my recent absence. Things got a little busy.
@bailx
Hi and thanks for your interest .
I am quite keen to start trading but I don't believe I have the time in the next couple years. I'm in year 11 and taking on pretty hefty subjects. I think I need to 
@ganorix
I agree with you. I believe I need to learn a lot but now probably isn't the best time to do so.
Thanks, also, for providing me with that information of parking spaces. I understand that the returns aren't great and there is work/risk involved in such an investment. But I think am just looking for something better than leaving it in a term deposit  now.
I spoke to someone my bank and they offered me 4.35% for 6 months on my 15k~ account. I didn't negotiate, just asked him for a number, got his card and left. What is the standard for term deposits? A couple of my friends say they get ~5.5%.
And you mention the support of paid advice. By that do you mean getting a broker who will help you make the decisions or doing a course on trading?

Thanks


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## Julia (10 February 2013)

philworld said:


> I spoke to someone my bank and they offered me 4.35% for 6 months on my 15k~ account. I didn't negotiate, just asked him for a number, got his card and left. What is the standard for term deposits? A couple of my friends say they get ~5.5%.



Philworld, have a look here:
http://www.infochoice.com.au/
Compares deposit rates for at call and term deposits.

And congratulations on getting together that much capital at such a young age.  Just so well done.
Best wishes.


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## bailx (11 February 2013)

philworld said:


> First of all I would like to apologize for my recent absence. Things got a little busy.
> @bailx
> Hi and thanks for your interest .
> I am quite keen to start trading but I don't believe I have the time in the next couple years. I'm in year 11 and taking on pretty hefty subjects. I think I need to
> ...




Well or right lucky Phil! I'm not gunner change dipper bi rally fellow. Take a couple years bank interest, make  sum low down interest rates. Give your self the mentality to accept time over measure. ( Very Good ) in the mean time educate yourself ( Very Good ). Sorry Boy!!!!!!! here comes WW111 . Swing & Price Action ain't the way to go. I f you have an understanding of the financial market and it prospects, take my a advice educate yourself!!!!!!!


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## ParleVouFrancois (11 February 2013)

I'm with ING Direct and they offer a bonus introductory rate of 5% p.a. for four months, it's one of the highest rates I can see in the market (short of going into a bank and charming you way to a higher rate). That could be a potential place to keep your money for a while.


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