# Trader Profiles



## Jesse Livermore (19 March 2005)

How old are the members of this forum and how much money do you make trading. Iam am 0nly 18 and have $100,000.00 sitting in a term deposit (i didn't make it myself, but it is mine now)


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## clowboy (19 March 2005)

If you are only 18 with $100k sitting in a term deposit then all I will say is think long ( I mean looooonnnnnnngggggg) and hard before doing anything with it.

The best divdend is an education, aside from that 100k at your age can set you up for life.


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## tech/a (19 March 2005)

Go buy an investment property with 100K it shouldnt be to hard making it positively geared.

Come back to trading AFTER you know what you need to to make a $$ LONG TERM.

51
Not a great deal as most of the $$s made are still there and stay there for years.(Open Equity).
I look at returns on funds invested rather than the $$ amount.
Over the last 3 yrs around 60% plus leverage from Margin.

Its not about how much you have or how you get it its about what you do with it that counts.


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## doctorj (19 March 2005)

If you have a reliable income in the 18-25 bracket and that volume of money saved up, the next investment you should be making is a home for yourself.  I personally can't think of anything, in the long run that will see you better off.


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## tech/a (19 March 2005)

Doc 
Seriously even if he lived with his parents he would be better served having an IP.
Income ofsets expenditure/interest AND he gets the capital gains.
Let alone all the Tax implications.
Increased equity in the IP becomes valuable.
Infact he could if he had servicability (Half a decient job) possibly get 2.

Make that $100k work!
Find a property sauvve accountant.
If you dont have a job yet then go for the 1 can always use equity in that for 2 and 3.
Buy the book.
DONT SIGN ANYTHING.

Oh shares .
Buy strong bluechips and hold.
Have an exit stratagy if they dont keep performing.
Have atleast 10 in a porfolio.
Learn all you can on long term trading.

Id do the housing first and only use a % of capital when share trading.


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## DTM (19 March 2005)

tech/a said:
			
		

> Doc
> Seriously even if he lived with his parents he would be better served having an IP.
> Income ofsets expenditure/interest AND he gets the capital gains.
> Let alone all the Tax implications.
> ...




I agree with Tech.  Maybe set aside 10k for trading after you get yourself an investment education.  Self taught is always the best.  Use the 90k to invest in a positive cashflow property.  You can always enlist your parents help etc.  There are lots of mortgagee properties for sale or maybe invest in properties used by the armed forces that guarantee an income.  Lots of ways to use your money.   

Ahhh... To be young again and actually have money..


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## Jay-684 (19 March 2005)

I'm young also (20)

I cant actually give a definitive figure of what I have made out of trading, however last year my return on my portfolio was 42%. Currently worth around the $85,000 mark. If I think about it though, besides the 200 WMC shares and 600 CBA shares I was given when I was a kid, the rest of the growth has come from the $5,000 parcel of shares I bought from dollarmites money saved up during primary school when I was around 14, so I spose around $55-$60k profit

If I were you I'd go to some ASX education seminars, and just read the paper alot (AFR, Money/Business section in the paper, Share magazines etc) Thats all I really do, and read this forum 

good luck making the money grow


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## Knobby22 (20 March 2005)

Blow part of it on cars and women.
You only live once.


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## canny (20 March 2005)

The Robert Kyosaki's of the world will tell you a house is not really an asset!

My kids have large trust funds - and the trustees will not permit them to buy an investement property at the moment as the housing market is 'too hot'. We're at the end of a real estate boom  - let it settle and buy into property at the start of the next boom - could be 7 years - but right now $100k doesn't get you much, unless you're not in a capital city. In 7 years, you could have theoretically turned that $100k into buying a house outright and having trading funds left over.

I would suggest some share trading seminars, but with no commitment to any particular group - then search and analyse charts for the best 'going and growing' shares - ones with a consistent uphill pattern.

Only put a small portion at a time into any speculative shares to protect your capital - and keep the rest in blue chips paying dividends, that have rising charts.

I also agree with the comments about both education and fun - critical to quality of life!
Enjoy it - and good luck.
Keep us posted on what you end up doing.


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## doctorj (20 March 2005)

Realistically though, houses serve two main functions in building a person's wealth - essentially a structured savings plan (ie. make payments on your mortgage to build equity) and everyone needs a place to live anyway.  Your rent can either go towards paying off somebody else's mortgage or your own.

Easy choice to me.  The flipside is, that as Tech pointed out, as long as you are willing and welcome, live at home.  It's so much cheaper and gives you the opportunity to make the first step out into the world a good one.


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## tech/a (21 March 2005)

*Blow part of it on cars and women.
You only live once.*

There are definate benifits in being a cashed up 30/40/50 something.

Make it when your young and spend it 

*When you can afford to!! *


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## money tree (21 March 2005)

Well I for one would not suggest taking the money out of a 5% yield secure investment and putting it into a 3% yield risky investment. Interest rates are on the rise. That means cash gets better while property and shares get worse. Stay put.

Property is a lousy investment. Especially with the current market conditions. High entry/exit costs, low yields, lack of liquidity, high maintenance and leverage aint that good.

What you may like to do is keep the money in term deposit, wait for rates to get higher then buy during the mortgagee sales.

Shares are much better, but not the best. They have much better liquidity, higher yields and drastically lower entry/exit costs. Leverage available via instalments, CFDs, LEPOs or other vehicles. Similar tax advantages to property if done right.

I invest in something most people have never even thought about. It has NO entry/exit costs. Higher yield. Greater leverage. Better liquidity. 

There is a time to change what you invest in but it is not now.


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## Fleeta (21 March 2005)

canny said:
			
		

> My kids have large trust funds - and the trustees will not permit them to buy an investement property at the moment as the housing market is 'too hot'.




And the share market isn't 'too hot'? I'd follow tech/a's points. If you can positively gear an investment property, its the best option. You just need to make sure you can get tenants cos no job + no tennants = trouble.

Personally, i'm 25 - and just got into the 'overheated' property market. In Melbourne, prices fell roughly 10% last year, so I don't feel like I can lose buying in after a 10% fall.

I'm still in the share market too - around 40% geared with a portfolio of about 12 stocks - mostly small caps I'm hoping will grow and give good capital return. I think yields on blue chips now are getting smaller, which tells me their will be a price correction in many of these blue chips.


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## krisbarry (21 March 2005)

EDUCATION IS A WASTE OF MONEY AND TIME!!!!

WARNING HECS FEES UP 25%

STAY AWAY FROM UNIVERSITY

I DROPPED $23 K ON AN EDUCATION, GOT A DEGREE AND COULD NEVER FIND WORK OUT OF IT.

THE ONLY DEGREES I RECOMMEND: LAW, DENTISTRY, MEDICINE, PSYCHOLOGOY, TEACHING OR NURSING, COMMERCE, ALL GUARANTEED WORK ON GRADUATION.

****** NEVER STUDY ARTS OR ANY ART RELATED SUBJECTS ***


The best divdend is an education, aside from that 100k at your age can set you up for life.


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## dutchie (21 March 2005)

Education is never a waste of money!

You should always learn something - even from your mistakes.

Most of us humans only use a small part of our brain so even stuff we think is currently useless can be easily stored in our memory bank without even getting close to filling it!


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## tech/a (21 March 2005)

*What you may like to do is keep the money in term deposit, wait for rates to get higher then buy during the mortgagee sales.*

Hmm higher repayments less opportunity for positive gearing.

*Shares are much better, but not the best. They have much better liquidity, higher yields and drastically lower entry/exit costs. Leverage available via instalments, CFDs, LEPOs or other vehicles. Similar tax advantages to property if done right.*

Yeh there is that.


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## TjamesX (21 March 2005)

I'm not so sure about property, I went through the same decisions about 12 months ago.... (I was 24 and about 90k in cash). After much analysis I decided the timing was wrong, IMO you will be able to buy houses in 5 years time for the same price. 

If your interested though a good property forum - www.somersoft.com/forums

The only case I can argue for property atm is if you really suck at saving hard earned $$$$. Positive gearing is much less risky than negative gearing - but if you factor in no capital growth, its really not any better than a term deposit and more risky.

Its all about the almighty %pa return you can get on your capital and what you're willing to risk to get it, I think Warren Buffet averages 20% over the long run (more than this and your doing bloody well), you can get 5-6% in term deposit, property yields are around 4%, the Allords returned over 20% in the last 12 months.... when does the bull run out of energy?

Invest in the sharemarket an amount that you're completely comfortable with losing

TJ


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## Fleeta (21 March 2005)

TjamesX said:
			
		

> Invest in the sharemarket an amount that you're completely comfortable with losing
> 
> TJ




Come on! Really! I have over $70k in the stock market and given that I have a massive mortgage, I am not comfortable with losing any of it...The only reason I have it there is because I BELIEVE that I can get a higher return out of this than the 6.55% interest I pay on my mortgage...and that is an after tax return out of the market. So far I am proving myself right - but so would anybody in the current climate of the ASX.

I think - start with an amount that will not make you cry when you lose it - for me, that is $7k. Now multiply it by 10. As long as you have a well diversified portfolio, you will not lose more than 10% of it over the medium term.


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## Fleeta (21 March 2005)

Hey Krisbarry - a university degree of a generic kind (i.e. Arts, Commerce, Science) is basically a degree in 'learning how to learn'. If you want a job in corporate Australia, you will at least need a Commerce degree. If you want to work in a bar, it may help to get an Arts degree.

Of course having a good job, whilst providing a good income, is not the key to wealth. I work in a firm with many people earning 6 figure salaries who don't have 2 cents to rub together cos they don't know how to make their money work for them. They pay off our mortgages and consume the products of companies that we have shares in. 

I think the key to wealth is financial education, through books and experience - and some good luck.


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## canny (21 March 2005)

Fleeta - I'm with you.
No matter what people earn, they seem to spend just a bit more than their income unless well trained or well disciplined from an early age.

Jesse - you've certainly started something!!

Perpetual Trustees are my preferred investment management company - and with a diversified portfolio of Aus and o/seas shares and some property development investing, they show a good annual return with low risk.

I personally think I could do better percentage wise annually just on Aussie shares, but I take more risks!


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## TjamesX (22 March 2005)

Fleeta said:
			
		

> Come on! Really! I have over $70k in the stock market and given that I have a massive mortgage, I am not comfortable with losing any of it...The only reason I have it there is because I BELIEVE that I can get a higher return out of this than the 6.55% interest I pay on my mortgage...and that is an after tax return out of the market. So far I am proving myself right - but so would anybody in the current climate of the ASX.




FLEETA!!! look... you weren't meant to take it literally!!!!  

Alright I did put it very badly, no one's going to lose every cent. What I was trying to get at is, I wouldn't invest money that you need for any particular purpose or money that has a short/medium time frame attached to it (ie investing funds that are needed for childrens education THIS year).  For me it takes the emotion out of it - I try to distance any feeling I have towards that money. Accepting/understanding that it may all go, while extremely extremely unlikely, helps me view it in that context.

So after sounding extremely risk averse initially - I actually have 90% of my cash in shares   

BUT: I still remember my first share investment 8 months ago... ION. Could have been a lot worse than the 8% loss I took


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## Fleeta (22 March 2005)

Oh no, you lost 8% - I lost 100%, I still hold ION shares - and I am praying that they give me the green light for a tax deduction in the current year!


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## TjamesX (22 March 2005)

NO don't do that....

Save the deductions for the year you sell NMS!!! you gonna need every tax deduction you can get your hands on for that one... :


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## Fleeta (23 March 2005)

If I listen to Baglimit I will probably never sell NMS...and besides I have already realised some big gains this year.

Selling NMS is an interesting dilemma, cos I still have to wait until October to get the CGT discount, but if it keeps falling, I want to get out...i'm hoping this isn't a big conspiracy and share price goes back to 20c.


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