# Hypothetical situation



## againsthegrain (30 August 2010)

hypothetically speaking I am very interested on peoples opinion and investment strategy.

Having 60 - 80 k to play with and a time frame of 3 - 5 years I am interested on what play most of you would take?

Is it property, market, simple interest or something more?

I am interested on what will be the most popular group view, this is not by any means asking for any sort of investment advice or opinion I am simply interested at what are the most popular views of asf members!


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## oztrades (30 August 2010)

LOL.. it would help if you stated your aims. Income or growth?


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## tech/a (30 August 2010)

How long has it taken to accumulate your 70K?
How long will it take you to accumulate another 70K?

Presuming you dont do any of those you mention above.


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## trainspotter (30 August 2010)

Mixture of all three IMO. Shares (some blue chip and speculative), Property (as in property trust) and Interest bearing account. I would not try and place all my eggs in one basket is the answer I am driving at !


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## tech/a (30 August 2010)

againsthegrain said:


> hypothetically speaking I am very interested on peoples opinion and investment strategy.
> 
> Having 60 - 80 k to play with and a time frame of 3 - 5 years I am interested on what play most of you would take?
> 
> ...




My reasoning in the above is that $70K can buy you a small business.
Lawnrowund comes to mind.
Having once been a Lawnie and the guy who naively gave Bill Viss the idea for VIP you could return greater than 20% on your investment outside of the boundaries you have suggested.

If you look at your $70k as a business investment then I would suggest it is uncapitalized and in some cases massively for the other vehicles you have suggested.


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## KurwaJegoMac (30 August 2010)

tech/a said:


> My reasoning in the above is that $70K can buy you a small business.
> Lawnrowund comes to mind.
> Having once been a Lawnie and the guy who naively gave Bill Viss the idea for VIP you could return greater than 20% on your investment outside of the boundaries you have suggested.
> 
> If you look at your $70k as a business investment then I would suggest it is uncapitalized and in some cases massively for the other vehicles you have suggested.




Just to clarify - are you saying that a better use of his money would be to forego all three and just buy/start up his own business? Do you personally run your own business and do trading for fun/other reasons? 

I ask because you're quite a prominant trader on the forums and just seems strange seeing you say to avoid all three of those investment vehicles and focus on a small business instead.

I'm not taking a stab, just curious because I'm in a similar position to the OP. I have money saved up that's split between shares and cash deposits, but have considered starting a business. I'm 24 and looking to build my passive income streams so that i can be financially independant by age 40 (i.e. not have to work a day job, can get by on passive income). 

At this stage I am on track to saving $35K a year from my day job (since starting this year). Also make money on top of this from my shares and cash deposits which I completely reinvest


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## againsthegrain (30 August 2010)

hypothetically speaking if I was in that situation, im 27 and its a realistic aim for me to be on 100k by the time im 30.

putting myself in this scenario and if I was to buy into a business right now and let go of my dayjob and fully focus on the business I don't know if the aim of 100k could be reached taking into account the worth of the business.

I have ran 2 businesses before not for the purpose of income nor full time but rather for experience and it is not as easy as it sounds. It needs dedication, knowledge in the field and being able to enjoy it. 

Funny that u mention but I have speculated on lawn mowing businesses or any simple trading service, car wash being ideal but more expensive. that is always sought after.

Only problem with that scenario is the person involved has to sacrafice 90 - 100 % of their time in the first 1 - 2 years.

If i was in the position I would like to keep more options open

If I was playing that scenario I would definately be securing the money in interest accounts in the meantime being the safest.

I wasn't really asking with the intent for growth or income, I was rather more interested what other members would do in such a scenario. Always interesting to see what are the trends in investing and peoples thinking/motivation.

p.s thats a very naugty name kurwa


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## tech/a (30 August 2010)

KurwaJegoMac said:


> Just to clarify - are you saying that a better use of his money would be to forego all three and just buy/start up his own business? Do you personally run your own business and do trading for fun/other reasons?
> 
> I ask because you're quite a prominent trader on the forums and just seems strange seeing you say to avoid all three of those investment vehicles and focus on a small business instead.




Firstly I'm 56 he's 27.
I have a son your age. He has an interest in trading and I have an interest in him having an interest---he's a Doctor of Physics kinda handy!

Yes I have my own Company specializing in Civil Construction the Soil Retention aspect is our specialty.I have 20 employees.I started in Business as a lawnie---fond memories!
I also have a Property Development arm which has been active since 1995.
Trading is an instrument in my overall financial strategy.



> I'm not taking a stab, just curious because I'm in a similar position to the OP. I have money saved up that's split between shares and cash deposits, but have considered starting a business. I'm 24 and looking to build my passive income streams so that i can be financially independent by age 40 (i.e. not have to work a day job, can get by on passive income).
> 
> At this stage I am on track to saving $35K a year from my day job (since starting this year). Also make money on top of this from my shares and cash deposits which I completely reinvest




After 30 yrs of business I am in the position for it to generate a passive income of 6 figures if I wished to retire.
Frankly Id be bored off my brain and whats next--death!
I can come and go as I please,enjoy the challenge of business have a cash flow many dream of and accept the challenges of trading and developing knowing I have the foundation well and truly laid.

Most including friends never built the foundation and before they knew it the get rich quick ideas of an exuberant youth left them with no capital base from which to enter into the areas mentioned.
I couldn't think of anything worse than trading for a living---it would bore me to death.
While scalpers wont agree with me (I dont see them around anymore)
the best thing you can do in life is take a long term view and get there with plenty to spare!
Trading 
Property
or Business.


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## skc (30 August 2010)

againsthegrain said:


> hypothetically speaking if I was in that situation, im 27 and its a realistic aim for me to be on 100k by the time im 30.
> 
> putting myself in this scenario and if I was to buy into a business right now and let go of my dayjob and fully focus on the business I don't know if the aim of 100k could be reached taking into account the worth of the business.
> 
> ...




It really depends on personal interest and prospect/enjoyment of current job. If your current career is steady with good growth, then putting the money in property or investment is probably what I would do (actually that's what I did when I was 27). If your career is so painful to you that you must have a change then dipping your toes into trading would probably be a good investment/outlet. If one has the experience and ability to run their own business then probably start building a business plan etc - while saving for more capital in lower risk, more liquid investments.

At the end of the day got to do something you look forward to doing every week when you wake up on Monday mornings.



tech/a said:


> *I couldn't think of anything worse than trading for a living---*it would bore me to death.
> While scalpers wont agree with me (I dont see them around anymore)




I would argue that mowing someone else's lawn all day would be more boring.


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## KurwaJegoMac (31 August 2010)

Seems that yesterday's server crash erased some of the last few posts in this thread. Boo  dont remember what was written


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## tech/a (31 August 2010)

KurwaJegoMac said:


> Seems that yesterday's server crash erased some of the last few posts in this thread. Boo  dont remember what was written




Strangely convenient.

I was sarcastically suggesting that skc look past his bubble before making his stupid sarcastic comment.



> I would argue that mowing someone else's lawn all day would be more boring




It has always been apparent that ASF policy is to deter posting criticising stupidity and leave it there for all to nod knowingly. 

There is no point commenting any further so will refrain.


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## KurwaJegoMac (31 August 2010)

tech/a said:


> Strangely convenient.
> 
> I was sarcastically suggesting that skc look past his bubble before making his stupid sarcastic comment.
> 
> ...




Haha now that you mention it I do remember you commenting something about that. Still, it's a good thing that some people find the prospect of mowing boring - business opportunity right there 

Tech/a you've had quite a successful run, with your companies growing to house a number of employees and provide a great passive income, (congratulations btw ). Based on all your experiences and knowledge, I was wondering if you had to give only one piece of advice/insight to your son, what would it be?


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## tech/a (31 August 2010)

> I was wondering if you had to give only one piece of advice/insight to your son, what would it be?




Was and still is to both Son and Daughter.

Don't have kids until you know who and your partner you are and where you and your partner are heading.
Make sure that your partnership can survive with only one partner earning the income. Financial pressures kill relationships and families (Happened to me!).

If you look around at the people you know who are single dads and mums.
Dad has to pay maintenance.
Mum has the kids and a difficult choice of working and struggling or not working and struggling more very few new partners want to take on your kids.---kids lose, Mum AND Dad lose.

Few get though relatively un scathed the large majority never recover!
The kids get caught in the same cycle.

A harsh reality and possibly not the answer you thought you'd get.
But the answer all need to hear!


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## KurwaJegoMac (31 August 2010)

tech/a said:


> Was and still is to both Son and Daughter.
> 
> Don't have kids until you know who and your partner you are and where you and your partner are heading.
> Make sure that your partnership can survive with only one partner earning the income. Financial pressures kill relationships and families (Happened to me!).
> ...




Definitely not what I was expecting : but I thank you very much for sharing that, it is definitely something I will be keeping in mind. 

I recently broke up with my long term girlfriend for this very reason - we had two very different mindsets about where we want to be in the future and while it was tough to break it off because we did care about each other a lot, looking back it was the best decision i've made. It ties in directly with what you said, that you should know who you and your partner are and where you're headed.

Thanks Tech/a!


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## Surly (31 August 2010)

tech/a said:


> My reasoning in the above is that $70K can buy you a small business.
> Lawnrowund comes to mind.
> Having once been a Lawnie and the guy who naively gave Bill Viss the idea for VIP you could return greater than 20% on your investment outside of the boundaries you have suggested.
> 
> If you look at your $70k as a business investment then I would suggest it is uncapitalized and in some cases massively for the other vehicles you have suggested.




Tech/a,

Most business brokers quote a return on the cost of a business without taking into account the wage you actually pay yourself.

If you paid an employee to mow the lawns in your round and only ran the business would it still return 20%?

cheers
Surly


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## tech/a (31 August 2010)

Surly said:


> Tech/a,
> 
> Most business brokers quote a return on the cost of a business without taking into account the wage you actually pay yourself.
> 
> ...




Yes your correct.
Now lets get outside the box and think like an entrepenuer NOT a Lawnie.

I buy a round for $70k which has me a customer base of $2000 in cuts.
I pay him $50k a year and costs are $35K a year (Hypothetical figures but not far of the mark I dont think---I could probably do it for $45K and $27K.)how do I still get my 20%.

So my guy also gets a bonus of $50 for every new client he secures.
He doesnt take long to find a new client a day! So he picks up around $15k a year in bonuses because he talks to neighbours. I had one guy who printed his own leaflets and had his wife drop them around while he cut lawns.

I of course have advertising going in every direction I can afford.
All new clients I cut.
When I have a big enough round to sell I pick the worst of my guys round and the worst of my round and make up a sell round with all new equipment. Now lets say the new round is worth $50K
I sell it to the new guy for $50K or sell it with a lease deal and do as I do with the original round---now I have 3 going---in a few years I have 7 then 10---I guess you get the picture how VIP and JIMS do it.

Some may possibly see the benifit of looking outside their own box---now.


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## treeman (31 August 2010)

Nice discussion and great tips


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## againsthegrain (31 August 2010)

This is exactly the discussion I wanted to hear

Like I posted before I have run 2 businesses before, not full time nor for profit but for experience and it taught me alot.

1. Never go into business with friends or family
2. Be dedicated and willing to give 120% of your time
3. Make sure you are moderately interested or at least can stand the job
4. Don't expect instant riches

I have been looking at business opportunities for a while now as a full time venture but since its a all in or out it is not a easy step to take. Not easy parting with your capital short term eventho knowing full well the returns will be greater.

Good advice tech, very motivating and definately something to take in for the future.

Kurwajegomac, lol cute nick naughty naughty, as you get a bit older you will no doubt change it in shame haha


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## KurwaJegoMac (31 August 2010)

againsthegrain said:


> Kurwajegomac, lol cute nick naughty naughty, as you get a bit older you will no doubt change it in shame haha




Haha don't know if i'll change it. It came about because I was trying to create an account name for ASF and everything I wanted had already been picked - in frustration I yelled out kurwa jego mac* and thought hey, why not just use that as my nick? And so the name stuck :

...though on quiet reflection it is quite a bad name


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## againsthegrain (31 August 2010)

I used to have one of those kurwa nicks back in highschool which was cool at the time but as I got a little older it was not a good nick to use especially to communicate with family lol


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## skc (31 August 2010)

tech/a said:


> Strangely convenient.
> 
> I was sarcastically suggesting that skc look past his bubble before making his stupid sarcastic comment.
> 
> ...




May be they were correct in deleting your post. Why is it stupid for me to think mowing lawn is more boring than trading?

You took 1 aspect of trading - sitting in front of computer all day - and call it boring. Perhaps you can allow others to take 1 aspect of mowing - pushing a lawnmower in a back and forth manner all day - and call that boring as well.

Sure mowing can be a valid and successful business endeavour. But can you argue that trading isn't the same?

The original poster seems to be getting something out of this thread so I will also refrain from now.


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## Joe Blow (31 August 2010)

skc said:


> May be they were correct in deleting your post.




I would just like to clarify something here. No post in this thread was removed deliberately. Yesterday, the forum database was accidentally damaged at approximately 5pm and we needed to restore a backup that was made at 3:30pm. As a consequence of this all posts made between 3:30pm and 5pm yesterday afternoon were lost and could not be restored.

That, in a nutshell, is what happened. 

Now that I have cleared that up, please carry on.


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## tech/a (31 August 2010)

> But can you argue that trading isn't the same?




Boring as hell.
You either trade a method which gives buy/sell/stop position size rules and set and forget.
Or you trade to a set of rules in a discretionary manner which most have to watch a screen all day.
Few can set limit orders and walk away.

Which ever way you look at it trading is bloody boring---no social interaction you cant discuss it with anyone its the most boring topic on earth.No one gives a rats.

Can be profitable but boring.


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## So_Cynical (31 August 2010)

I used to mow half of some guys lawn every 2nd week, the lawn was in Central Queensland and was about 1 and a half acres...i was very broke at the time and the lawn owner was old and a little invalid.

It was a hell of a way to earn $30 :shake: In mid summer its was nightmarish, and to make matters worse his very over weight, hairy daughter had the hots for me ( i was skinny and had hair then ) while there's a few choice words i could use to describe mowing...boring isn't one of them.


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