# What would you do if you were me?



## psailagroup (27 December 2012)

Hi all,
This is my very first post on this site and so glad that I have found it as well.
I am 28 from Melbourne and we have almost paid off our first home, Rather than paying off the home I would like to invest in shares to create an extra income, Our short term goal is to achieve a 4K per year income from shares where the money would be used for extra cash flow to invest. Our yearly repayments for our home loan is 4K so this would be a good first goal.

I need some sort of direction or help to achieve this goal:
1) If we have 1K to 3K in spare cash per month, how much would you invest in the share market on a monthly basis to achieve our goal?  
2) I have been trading for the last two years and have done well, but what I have been doing is this, once i make / saved 10K from shares i would use this money to pay our home loan. Would you continue this strategy or would you do it a different way.
3) The ASX market is a great  but i understand that the market has so much money invested from SUPER and because so many people have so called experts handling their super do you think that this has pushed prices above what they should really be? Also when things turn bad they seem to just sell all of their shares which in turn drag the market down too.
4) How has the share market improved your life?


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## prawn_86 (27 December 2012)

*Re: What would you do if you where me!!!*

Once you have traded/invested for a few years you would want to be able to out-perform the index, otherwise you might as well just invest in an index fund. Or in your case the minimum return you need to beat is that of your interest rate on your mortgage.

Look at the returns of most fund managers and they are below 10% pa for the last few years, so do you think you will be better than those that do it full time? If so you will need 40k upwards to acheive your goal (probably a lot more for a beginner in my opinion)

There is a lot of useful info here on ASF so make sure you use the search function.


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## So_Cynical (27 December 2012)

*Re: What would you do if you where me!!!*



psailagroup said:


> Our short term goal is to achieve a* 4K per year income from shares* where the money would be used for extra cash flow to invest.
> 
> 1) If we have 1K to 3K in spare cash per month, how much would you invest in the share market on a monthly basis to achieve our goal?




Using my experience as a guide i think you will need between 30 to 60 thousand dollars to realise a 4K profit...totally dependant of course on just how successful you are with your share market activity's. 



psailagroup said:


> 2) I have been trading for the last two years and have done well, but what I have been doing is this, once i make / saved 10K from shares i would use this money to pay our home loan. Would you continue this strategy or would you do it a different way.




Whatever you decide to do, you cant get around the fact that you need to own real estate to get access to cheap money.



psailagroup said:


> 3) The ASX market is a great  but i understand that the market has so much money invested from SUPER and because so many people have so called experts handling their super do you think that this has pushed prices above what they should really be? Also when things turn bad they seem to just sell all of their shares which in turn drag the market down too.




The market will do as it does.. opportunities come and go.



psailagroup said:


> 4) How has the share market improved your life?




Due to my share market activity's my yearly income is now 21% higher and im looking forward to a very early (working for a boss/idiot) retirement.


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## Vader (27 December 2012)

*Re: What would you do if you where me!!!*



psailagroup said:


> Our yearly repayments for our home loan is 4K so this would be a good first goal.




If your mortgage repayments are only $4k per year (~$333/m), then you must have a pretty small mortgage left - how long would it take you to pay it off if you put all your spare money into that? Once it's done, you'll have an extra $4k per year you can invest.


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## CanOz (27 December 2012)

*Re: What would you do if you where me!!!*



psailagroup said:


> Hi all,
> This is my very first post on this site and so glad that I have found it as well.
> I am 28 from Melbourne and we have almost paid off our first home, Rather than paying off the home I would like to invest in shares to create an extra income, Our short term goal is to achieve a 4K per year income from shares where the money would be used for extra cash flow to invest. Our yearly repayments for our home loan is 4K so this would be a good first goal.
> 
> ...





Read this: Unholy Grails by Nick Radge

Trade this.....Modified 20% Flipper

50k / US Equities / 2007 - 2009

50k / US Equities / 2006 - 2008

S&P 500 during the same period...

Who here on this forum can beat that?

CanOz


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## Calliope (27 December 2012)

*Re: What would you do if you where me!!!*

*What would you do if you where me!!!*

I think you intended to title this thread:

"What would you do if you were me?"

For starters you could probably begin adult education classes and learn basic English grammar and spelling. Even at 28 it is not too late to learn.


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## CanOz (27 December 2012)

*Re: What would you do if you where me!!!*



Calliope said:


> *What would you do if you where me!!!*
> 
> I think you intended to title this thread:
> 
> ...




While i understand your point i really don't understand what good can come out of making it on this thread. This is an internet forum, not a grammar contest. Aside from a few on here, no one really cares that the OP made a couple of mistakes...

CanOz


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## Calliope (27 December 2012)

*Re: What would you do if you where me!!!*



CanOz said:


> While i understand your point i really don't understand what good can come out of making it on this thread. This is an internet forum, not a grammar contest. Aside from a few on here, no one really cares that the OP made a couple of mistakes...
> 
> CanOz




You said;
*
 "Aside from a few on here, no one really cares that the OP made a couple of mistakes..."*

Maybe you don't, but psail is asking for advice on investment, and maybe his heading was just carelessness. But he will find that the stock market is very unforgiving of careless investors, as I'm sure you know. If psail has learned to be very careful when investing, then that is a more valuable lesson than your earlier advice to him.


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## CanOz (27 December 2012)

*Re: What would you do if you where me!!!*



Calliope said:


> You said;
> *
> If psail has learned to be very careful when investing, then that is a more valuable lesson than your earlier advice to him.*



*

You don't get much more careful than learning to manage risk and applying statistical analysis to your momentum investing plan do you?

CanOz*


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## Calliope (27 December 2012)

*Re: What would you do if you where me!!!*



CanOz said:


> You don't get much more careful than learning to manage risk and applying statistical analysis to your momentum investing plan do you?
> 
> CanOz




Is that what you were trying to get across? Well bugger me.


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## CanOz (27 December 2012)

*Re: What would you do if you where me!!!*



Calliope said:


> Is that what you were trying to get across? Well bugger me.




Sorry if you didn't get that part Calliope, perhaps my mistake. Plenty in the book about that, and if you looked at the charts carefully you would notice that risk was managed quite well through the GFC.

I'd be happy to elaborate if you like.

CanOz


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## Bill M (27 December 2012)

psailagroup said:


> Hi all,
> This is my very first post on this site and so glad that I have found it as well.




Welcome to ASF, I'm glad I found it too.



> I am 28 from Melbourne and we have almost paid off our first home,




You are a true saver/investor, you have done really well to be where you are.



> I need some sort of direction or help to achieve this goal:
> 1) If we have 1K to 3K in spare cash per month, how much would you invest in the share market on a monthly basis to achieve our goal?




IMHO, half. I would keep half in a cash emergency fund and devote the rest to stocks.



> 2) I have been trading for the last two years and have done well, but what I have been doing is this, once i make / saved 10K from shares i would use this money to pay our home loan. Would you continue this strategy or would you do it a different way.




You have done well to almost pay off your home loan. I personally would continue to do this until it is done and dusted, I hate owing money to anyone, but that's just me. Then once done I would concentrate on the stocks. 



> 3) The ASX market is a great  but i understand that the market has so much money invested from SUPER and because so many people have so called experts handling their super do you think that this has pushed prices above what they should really be? Also when things turn bad they seem to just sell all of their shares which in turn drag the market down too.




My opinion is that the market is not overvalued. As long as you can pull gross returns of 10% from some of our leading companies in dividends I do not think it is overvalued. 



> 4) How has the share market improved your life?



I do not pay any tax at all, neither does my wife. We do not draw super so I will not include that. Basically, fully franked stocks that have a 30% imputation credit works in our favour. Now with the new tax free threshold of 18K per person per annum my wife and I actually get tax refunds. A lot of people underestimate how good fully franked dividends are. The more money I can salvage from tax the more my wife and I can spend on holidays and other luxuries. 

Good luck with your investments.


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## Calliope (27 December 2012)

*Re: What would you do if you where me!!!*



CanOz said:


> I'd be happy to elaborate if you like.
> 
> CanOz



No thanks. It sounds boring, but if it helps psail, then good for you.


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## psailagroup (27 December 2012)

Hi every one,

Thank you all for your positive replies, I think for me
This forum is goin to help in many ways, talking and networking with like 
Indeed people is important. I will start slowly and maybe use this strategy
For any left over cash from each month il invest 70% in the market and the remaining 30% into my offset acccount 
Ps callIope maybe you should improve your attention detail skills 
Its psaila not psail Naughty naughty


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## CanOz (27 December 2012)

psailagroup said:


> Hi every one,
> 
> Thank you all for your positive replies, I think for me
> This forum is goin to help in many ways, talking and networking with like
> ...




You have no comments about momentum investing at all? I'm no vendor mate...you want to see the last twelve months walk forward?

CanOz


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## psailagroup (27 December 2012)

CanOz said:


> You have no comments about momentum investing at all? I'm no vendor mate...you want to see the last twelve months walk forward?
> 
> CanOz




Hi canoz 
What do you mean by momentum investing, also can u forward anything in regards to the last twelve months ?

T


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## CanOz (27 December 2012)

Lets post the last twelve months...US Equities...50 k

You need to stick with this for 24 months minimum.


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## Calliope (27 December 2012)

psailagroup said:


> Hi every one,
> 
> Thank you all for your positive replies, I think for me
> This forum is goin to help in many ways, talking and networking with like
> ...




I'm glad to see you took my advice psail, although with sentences like this;
"This forum is goin to help in many ways, talking and networking with like 
Indeed people is important.", you still have a long way to go in the careless department. 

Remember, carelessness and investing don't go together.


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## CanOz (27 December 2012)

Calliope said:


> I'm glad to see you took my advice psail, although with sentences like this;
> "This forum is goin to help in many ways, talking and networking with like
> Indeed people is important.", you still have a long way to go in the careless department.
> 
> Remember, carelessness and investing don't go together.




You really don't have more than this to contribute do you


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## DocK (27 December 2012)

CanOz said:


> You really don't have more than this to contribute do you




+1

I wouldn't be surprised if English were not the op's first language.  Smart a#se responses like those from Calliope do absolutely nothing to encourage newbies to post.  Poor form imo.


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## DocK (27 December 2012)

psailagroup said:


> Hi all,
> This is my very first post on this site and so glad that I have found it as well.
> I am 28 from Melbourne and we have almost paid off our first home, Rather than paying off the home I would like to invest in shares to create an extra income, Our short term goal is to achieve a 4K per year income from shares where the money would be used for extra cash flow to invest. Our yearly repayments for our home loan is 4K so this would be a good first goal.
> 
> ...




Psailagroup, If i were you I'd clear the home loan first - if it's your principle place of residence the interest you're paying, although meagre, is non-deductible - so you'd need to be achieving pre-tax investment returns of a few % above what you're paying on your mortgage to be ahead.  At your age I certainly wouldn't be "putting all my eggs in one basket" by investing all your savings into the sharemarket.  You've plenty of time to build a passive income, and property investment is also an option that may be worthy of consideration at some point in time.  Having liquid funds will give you options should you wish to diversify in the future.


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## Calliope (28 December 2012)

DocK said:


> +1
> 
> I wouldn't be surprised if English were not the op's first language.  Smart a#se responses like those from Calliope do absolutely nothing to encourage newbies to post.  Poor form imo.




Your response is the smart a*se one. If you have better advice for him - let's hear it. Slovenliness in posting equates to slovenliness in investing. Perhaps psail is not ready to take the plunge into the unknown,and should not be encouraged.

PS. I see you agree with me.


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## Calliope (28 December 2012)

CanOz said:


> You really don't have more than this to contribute do you




It's more than you've contributed. Psail couldn't make head nor tail of your offering.


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## pixel (28 December 2012)

DocK said:


> +1
> 
> I wouldn't be surprised if English were not the op's first language.  Smart a#se responses like those from Calliope do absolutely nothing to encourage newbies to post.  Poor form imo.




+2
... and thanks, Mods, for quickly correcting an obvious typo in the title 

psailagroup, welcome to arguably the best place to get some useful answers; that aside, you are to be congratulated for getting this far at an early age.

Without knowing more about your likes and ambitions, it's hard to make a really good suggestion. I was quite a bit older when I was in a similar enviable position. I bought an old place in an up-and-coming suburb, did it up to live in it, and, when I found better work elsewhere, I rented it out.
Problem One: The tenants - or rather: their boyfriends - wrecked the front garden within months; as my new workplace was a thousand miles away, I had to pay an agent, whose only comment was "but they're paying the rent on time." Bottom line, rent vs loss in value: about break-even.
In the end, I sold it - admittedly still at a tidy profit, but that was mainly the result of our own hard work put into renovatiions when it was our PPoR.

After the Crash of 1987, I bought into a few good stocks - IPOs and Mining; after our return to Perth, we could then buy a bigger place without any mortgage, but still had money left to invest in shares and fixed interest. At the end of 2000, I could afford to "resign" and become a full-time trader. Mind you, that meant primarily that I swapped working for an old idiot ("the Boss") for a new idiot (myself); but instead of spending 2-3 hours a day commuting on the freeway, my way to the office is now a short 5m walk. And in spite of frequent cause, there was never any threat of sexual harassment claims from the tea lady, secretary, or assistant supervisor :


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## skc (28 December 2012)

*Re: What would you do if you where me!!!*



CanOz said:


> Who here on this forum can beat that?
> 
> CanOz




Surprised no one responded to the above.


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## Joules MM1 (28 December 2012)

*Re: What would you do if you where me!!!*



skc said:


> Surprised no one responded to the above.




you include yourself, naturally


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## Joules MM1 (28 December 2012)

lulz



> This message is hidden because Xxxxxxx is on your ignore list




jeez......wonder who that could be.....


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## psailagroup (28 December 2012)

pixel said:


> +2
> ... and thanks, Mods, for quickly correcting an obvious typo in the title
> 
> psailagroup, welcome to arguably the best place to get some useful answers; that aside, you are to be congratulated for getting this far at an early age.
> ...




Hi Pixel,
I had to download Firefox this morning to get this site working properly. For some reason this site kept on crashing with internet explorer.   

I honestly love keeping busy and working, We own a Tattslotto store in Melbourne and I also work as state sales manager for a shipping company. My wife was working as a drafter but she lost her job in NOV. Our goal is to create a solid finical future by the age of 35. I love investing for two reasons, 1) If done properly it can provide solid income or capital and 2)  If you have a passion for investing, it can become your career. 

thanks
JP


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## pixel (28 December 2012)

psailagroup said:


> Hi Pixel,
> I had to download Firefox this morning to get this site working properly. For some reason this site kept on crashing with internet explorer.
> 
> I honestly love keeping busy and working, We own a Tattslotto store in Melbourne and I also work as state sales manager for a shipping company. My wife was working as a drafter but she lost her job in NOV. Our goal is to create a solid finical future by the age of 35. I love investing for two reasons, 1) If done properly it can provide solid income or capital and 2)  If you have a passion for investing, it can become your career.
> ...




Hi JP.
Now THAT sounds so familiar 

My wife was also working in an Architect's bureau, till she lost her drafting job to a computer.
After a few quick calculations, we found that she should become the family "Investor" with a growing share portfolio in her name and dividends taxed at a much lower than my own marginal rate.

Tell you what: Some women have a knack to pick the right time too. While I was still working "for de Man", I would usually crank up the PC before I hit the freeway; watchlists all set up, targets discussed; then she would ring the Broker (no onliners in those days) when the time seemed right. 

On one occasion, I had calculated a top of $3.05 and told her to sell at that price if it looked like forming a top. In the evening, she "confessed" to have been disobedient: Her gut feeling had been it might fall short, so she rang the sell order through for $3.02. Not only was that t he High of the day (and week and month...), but the blessed thing closed at $2.96 and a few weeks later ended its life far below our IPO price ($1) and was delisted.

I thought I mention that, in case your Good Lady finds some time and enjoyment to give it a go as well.


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## DocK (28 December 2012)

pixel said:


> I thought I mention that, in case your Good Lady finds some time and enjoyment to give it a go as well.




http://www.telegraph.co.uk/women/womens-business/9690599/Boys-will-be-boys-Why-women-make-better-traders-than-men.html


> 'Boys will be boys': Why women make better traders than men
> When a trading website recently declared that women make better traders than men, ex-Rothschild banker Emma Sinclair dismissed it as a wild claim. That is, until, a wealth of research convinced her otherwise.
> 
> The release listed five possible reasons why women generally do better at financial spread betting, those being:
> ...




http://www.traderplanet.com/articles/view/162236-why-women-make-better-traders/


> Why Women Make Better Traders ......
> You need only Google using these keywords "why women make better traders" to find many other experts and large financial publishers writing about the same thing. I am not alone.
> 
> So I would like to propose a toast, please join me in raising a glass to women in the markets.
> Congratulations ladies, you can indeed trade, and in fact, you are the better trader.




Food for thought?


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## matty77 (28 December 2012)

*Re: What would you do if you where me!!!*



Vader said:


> If your mortgage repayments are only $4k per year (~$333/m), then you must have a pretty small mortgage left - how long would it take you to pay it off if you put all your spare money into that? Once it's done, you'll have an extra $4k per year you can invest.




100% agree with this post - if that is all you are paying then pay the bloody thing off, yes there are some tax advantages but seriously pay it off ASAP and use the spare cash to invest.

???


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## psailagroup (28 December 2012)

Thanks every one!!!


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## Calliope (28 December 2012)

psailagroup said:


> Thanks every one!!!




I would like to apologise to you Johann for trying to lecture you. You obviously have a strong work ethic and will probably succeed at anything you try. 

Good luck.


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## Julia (28 December 2012)

Calliope said:


> I would like to apologise to you Johann for trying to lecture you. You obviously have a strong work ethic and will probably succeed at anything you try.
> 
> Good luck.



Ah, a happy ending.
Just when I was thinking you were rehearsing for the cast of "Grumpy Old Men", Calliope.

To the OP, well done on achieving what you have at your age and on remaining polite in this thread.
Impressive.


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## pixel (28 December 2012)

Julia said:


> Ah, a happy ending.
> Just when I was thinking you were rehearsing for the cast of "Grumpy Old Men", Calliope.
> 
> To the OP, well done on achieving what you have at your age and on remaining polite in this thread.
> Impressive.




+1 on both counts


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