# Teenager Investing



## Daniel95 (25 March 2012)

Hi guys,

I'm 16 and have really grown and interest to the stockmarket and understanding the economy ( do economics and business studies at school) I currently just deposit all my money into a high interest bank account, around 5-6% and have about 6k all up in my account.  

Is their any other ways to get the most out of my small amount of savings to set me up for the future? Should i just continue to deposit the money in my bank account or invest in long term shares etc? any other investments? i have heard about managed funds but not to sure about what that involves.

 I am currently on stockwatch just testing out and getting use to the stock market, really enjoying it.At the moment i am just trying to learn as much as i can so when i am older i can have a large portfolio, planning to get into investment banking also. Any advice would be great.

Cheers,
Daniel


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## Julia (25 March 2012)

Daniel, that's a fantastic effort to have saved that much at just 16.  My suggestion would be to keep saving and get as much education as you can in the process.
Try the Beginners' Lounge where there is a good deal of information, in particular Sir O's thread for beginners.
Best of luck and well done.


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## McLovin (25 March 2012)

Good stuff Daniel. 

Maybe you could consider an index ETF (exchange traded fund) while you learn.

I started out at about your age too. Actually, you sound a lot like me. I remember doing work experience for JB Were back in 1997, 3 days on the trading floor of the SFE and two days on the options trading floor of the ASX, what a week, for a 15 year old! I ended up in IB but eventually got over the long hours and that little issue called the GFC didn't help.


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## So_Cynical (25 March 2012)

Daniel95 said:


> Hi guys,
> 
> I'm 16 and have really grown and interest to the stockmarket and understanding the economy ( do economics and business studies at school) I currently just deposit all my money into a high interest bank account, around 5-6% and have about 6k all up in my account.
> 
> Is their any other ways to get the most out of my small amount of savings to set me up for the future?




Are you aware of the ANZ Online Investment Account?

Its a round about way of investing in a S&P/ASX 200 Index ETF...because that's actually where your money goes  

Read on

http://www.anz.com/personal/investi...unds/online-investment-account/account-works/


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## ParleVouFrancois (26 March 2012)

A high interest rate account is fine, just KEEP SAVING MONEY. This is the most important thing for a young person looking to get into shares, you have to have as big a bankroll as you can! Take jobs every summer holidays and even casual or part time after school and save as much as possible. Keep reading and learning about the sharemarket, "The Intelligent Investor" by Benjamin Graham is always a good starting point if you want to get into investing. 

JM.


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## ACEz (26 March 2012)

Daniel, 

I'm 18 and started trading 3 months ago been following the share market since I was 15.

The ASX share trading game is great (Because you cannot trade until your 18YO), Games like that HELP a lot ! , getting to understand how bid/quote and fill etc feels.

 I Suggest working hard casual/part time saving as much as possible (but obviously not too hard in year 12).

 I would also really suggest paper trading , Maybe buy a good book my favorite being " Come into my trading room " By Alexander Elder.

 Don't let others say your to young or that your incapable in 3months i have increased my capital by 137 percent (probably just a few lucky trades . 

But most of all enjoy your life at 16 mate, It doesn't take long before your 18 and going to uni etc


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## McLovin (26 March 2012)

ACEz said:


> (Because you cannot trade until your 18YO),




You can, you just need someone over 18 to be the trustee of the minor's account.


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## Gringotts Bank (26 March 2012)

Daniel95 said:


> Hi guys,
> 
> I'm 16 and have really grown and interest to the stockmarket and understanding the economy ( do economics and business studies at school) I currently just deposit all my money into a high interest bank account, around 5-6% and have about 6k all up in my account.
> 
> ...




I have a forex system that can double your money every six months, fully automated.  PM me for details. 












What did you feel when you read this?


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## McLovin (26 March 2012)

ParleVouFrancois said:


> Keep reading and learning about the sharemarket, "The Intelligent Investor" by Benjamin Graham is always a good starting point if you want to get into investing.




As good a book as the Intelligent Investor is, I'm not sure it's the sort of thing you should read first. Even though it's Graham's most accessible book it's still a pretty heavy read. Maybe something by Greenblatt or Greenwald (Value Investing by Greenwald is excellent, IMO, and a little bit lighter) would be more approachable for someone young who is just getting started.


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## Sir Osisofliver (26 March 2012)

Daniel95 said:


> Hi guys,
> 
> I'm 16 and have really grown an interest in the stockmarket and understanding the economy (I do economics and business studies at school). I currently just deposit all my money into a high interest bank account, around 5-6% and have about 6k all up in my account.
> 
> Is their any other ways to get the most out of my small amount of savings to set me up for the future? Should i just continue to deposit the money in my bank account or invest in long term shares etc? any other investments? i have heard about managed funds but not to sure about what that involves.




Hi Daniel - well done on getting together your pool of funds, and well done at becoming interested at such a young age. The earlier you start learning about finance and investing the better.

At your age the choices that you have are extremely limited. Below the age of 18 you are not held accountable under common law. Ergo no one will write a contract for services with you individually. As McLovin indicated, the only way for you to participate directly into the market is to have an adult become trustee over an account for you. You do *not* need a trust, (Which would be an expensive entity to set up) you merely need a trustee. A parent or guardian would do nicely.  Should you purchase assets in that account, when you turn 18 any shares that are within the account will revert to your name with no change in beneficial ownership. IE you will not be paying capital gains tax by transferring them into your name and they retain their original cost base.

Many professional investors do not like managed funds (myself included). I encourage you to find out why this is the case. 







> I am currently on stockwatch just testing out and getting use to the stock market, really enjoying it.At the moment i am just trying to learn as much as i can so when i am older i can have a large portfolio, planning to get into investment banking also. Any advice would be great.
> 
> Cheers,
> Daniel




What are your Math skills like?  Investing and economics has a lot of math behind it, some of it simple, some of it reasonably complex. In my experience - technical analysis math is much more difficult than fundamental math.  Probability is your friend.

Investment w...bankers - hmmm well my mum always said if you couldn't say anything nice about someone don't say anything at all. 'nuff said. If you're thinking that what you want is a high paying job within finance...aim for a Bond or Forex trader instead. Not quite as many rats, sharks, soul sucking fiends. etc

Cheers

Sir O


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## Daniel95 (26 March 2012)

> Investment w...bankers - hmmm well my mum always said if you couldn't say anything nice about someone don't say anything at all. 'nuff said. If you're thinking that what you want is a high paying job within finance...aim for a Bond or Forex trader instead. Not quite as many rats, sharks, soul sucking fiends. etc




Why do you say this, bad previous experiences?


Also, thank you everyone for all your comments, i didn't think i would get this many replies. I have taken all the information into consideration and i think i will just keep saving until i'm 18 or so, and then look to invest when i am much more knowledgeable in all this. 

For now i will just keep paper trading and reading up on the forum, sometimes posting and asking questions.

Thanks,
Daniel


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## Dowdy (26 March 2012)

Put your money in ubank. I think they have the best rates atm....

Learn as much as you can about economics. Once you figure out how the economy works, then you'll know how businesses run and make a profit and then you'll know where  and which companies to invest your money in.

I tend to stay away from trading and stockmarket books telling you how to invest. Most of what they say go obsolete with every crash.

You want advice, save up for a car and buy the crappiest car you can find. One of my mates saved up a bit and bought a brand new car for his first car. Since he was only new to driving, he crashed it 3 times within a year....not a good investment


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## McLovin (27 March 2012)

Daniel95 said:


> Why do you say this, bad previous experiences?




It's a pretty cut-throat industry. When there are millions or billions of dollars in deal flow it tends to attract people who would step on their mother to get to the money. It's certainly not all like that and every IB has a different culture.

That being said, I've been on enough trading floors in my time (and have quite a few friends who work on them) and they don't exactly attract Type B personalities.


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## Sir Osisofliver (27 March 2012)

Daniel95 said:


> Why do you say this, bad previous experiences?






McLovin said:


> It's a pretty cut-throat industry. When there are millions or billions of dollars in deal flow it tends to attract people who would step on their mother to get to the money. It's certainly not all like that and every IB has a different culture.
> 
> That being said, I've been on enough trading floors in my time (and have quite a few friends who work on them) and they don't exactly attract Type B personalities.




what McLovin said...and yes I've been on the receiving end of some of it...plus some of the investment banker ego's can be seen from space. 

As for traders also having those unfortunate characteristics of thinking that they have a 12 foot schlong in a pissing contest...yup...but IME there's less of them as a percentage and it's easier to avoid them.

Cheers

Sir O


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## McLovin (27 March 2012)

Sir Osisofliver said:


> plus some of the investment banker ego's can be seen from space.




My grandfather used to tell me "always keep things in perspective, no matter how great you think you are, there's one billion Chinese who couldn't care less".

Sage advice, I think.


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## ROE (27 March 2012)

Well done, most teens probably be on the consoles playing games.

Time is on your side, compounding + time = get rich slowly but surely and a very comfortable life...

just keep saving and make sure your out going is less than your incoming
you will have money for the rest of your life to invest.

do enjoy a little but make sure you dont blow your money...you can have a very good time
without spending all your money...

Here are some books to read..

1. The Millionaire next Door (saving tips and good habits)
2. The richest man in Babylon (spend less than you earn and invest)
3. Debt into Wealth by John Cummuta (tackle debt if you have any but if you dont he has some awesome tips)
4. Common Stock, Uncommon Profit (Specific to shares investment)
5. Buffettology by Mary Buffett ..(simple way to pick out good business and Warren Buffett Principles)....

if you done with those I have a few hundred more for you to read, once you acquire all these knowledge you will know exactly what to do with your money.

I have young kids and they each save up around $1500 already before 10 year of age....
I dont buy them toys or anything with my money

I give them an allowance from that they can buy anything they want...

every time I give them pocket money, I remind them they can spend all they want but make sure  it is always below what I given them....and with that they dont seem to buy much toys at all

all they want to do is save and see next quarterly statement where they see their money keep growing..
and they all get excited and ask why they keep getting more from the banks, and I told them that is 
the magic of compounding and time... 

I hope in time they develop an interest in money and managing their own money...

No one look after your money better than you, everyone wants their cut in your money so cut them all out 

The more knowledge you acquire the better investor you become and you can manage all your money 
yourself and you save a bundle in the process...

Do pay for books and financial information source like AFR, Smart Investors etc...


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## Bill M (27 March 2012)

ROE said:


> Well done, most teens probably be on the consoles playing games.
> 
> Time is on your side, compounding + time = get rich slowly but surely and a very comfortable life...
> 
> ...




I reply to your post deliberately quoting the whole lot because it is so true and so important for Daniel95 to read again.

Everytime I read one of your posts I feel like I need to read more, the next chapter, maybe you should write a book too ROE. Great stuff, we think alike


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## tech/a (28 March 2012)

Well I'm going to add something a little different to those suggestions above.

As Sir O says CURRENTLY you have limited options.

*BUT.*

I've found that the* LIFE CHANGING* money comes from being in front of the Right Train at the Right time.

Now I know Sir "O" found one ---it cost me $500 to find out!

With all the advice above you should position yourself with the knowledge of what to look for.
That would be Economic Knowledge.
EG How to identify when GOLD is really Cheap A few years ago it was $250/oz
When Gold is really expensive and likely to tumble.
Same with Oil/Currency/Stock---any stock---
Property---when it was so cheap you could borrow 100% and rent it for profit
Like it was in 1996 when I just kept buying as long as the bank gave me money!!

Your young enough to see many many of these opportunities come by in your lifetime.
Things that NOW seem impossible will return.

*WHEN THEY DO*
Be armed with understanding RISK---mitigate it--if you cant control it then dont do it!
Understand how to take advantage of the opportunity and then go for it!

*Recognize opportunity
Understand how to take advantage of it.
JUST DO IT!*

That goes for you not so young ones as well!!!


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## notting (28 March 2012)

I'd just like to add one teeny little thing to that. 

*Uranium*.


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## tech/a (29 March 2012)

notting said:


> I'd just like to add one teeny little thing to that.
> 
> *Uranium*.




PEN  
Is stirring again


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## craft (29 March 2012)

tech/a said:


> Well I'm going to add something a little different to those suggestions above.
> 
> As Sir O says CURRENTLY you have limited options.
> 
> ...




Are you a closet value investor Tech/a

Good post – applicable to so many methodologies.


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## tech/a (29 March 2012)

craft said:


> Are you a closet value investor Tech/a
> 
> Good post – applicable to so many methodologies.




Opportunist.
There are just so many.
But the really life changing ones hit you in the face.
They freeze most into paralysis because you have to go against a strong grain
to capitalize on those opportunities.
When I sold all holdings in 2008 most thought I was an idiot---infact I was----I didnt short every index with everything I had.

Same with housing Friends thought I was playing monopoly.

Truth is that recognising opportunity generally isnt that hard.
Knowing what to do with it cuts the field down a fair bit.
Doing it is the hardest of all---and doing it to the extent that it is life changing is as rare as that rocking horse stuff.


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## Sir Osisofliver (29 March 2012)

tech/a said:


> Well I'm going to add something a little different to those suggestions above.
> 
> As Sir O says CURRENTLY you have limited options.
> 
> ...




LOL - I remember that - Love the CSG stocks! Some of the most profitable trades I've ever done and because I was writing the Newbie thread at the time and was intending to move into TA and didn't want to bamboozle the noobs with technical jargon. I used the phrase "bottoming features" or something and you called me on it saying that I was full of it and you were willing to bet $500.

I was livid with you calling me a liar; I called you a toxic something or other, told you to go do something unnatural to yourself, screenshot the trade statement and said give the $500 to Joe.

Good times.   Glad it's all water under the bridge now Tech and if I haven't said it before I do apologize for losing it at you at the time.

It's all a bit funny now in hindsight, but my track record for catching that kind of outlying event is pretty good. I've had an 800-1000% return trade about once every 18 months since 2001. 

*Enters Memory Lane*

Ahh you always remember your first  It was Minotaur Resources in early '01 original purchase 7.5 cents after AMP popped up on the significant holders register. Spent $6K on it (which was a dangerous position size given the size of my account at the time). Announced a 50:50 split deal with BHP (when ususally BHP does the "we will fund development if you find something commercial but we're taking 80% of the result" kind of thing) and baby I could just smell the money at that point, shares moved to 17 cents and the temptation to take profit was causing sleepless nights.

The following day they announced they'd discovered the next Olympic Dam. Stock closed on the day at *$1.65* with a high of $1.70 for the day. A 1000% day! Mind you this was my first so I had some issues with premature excitement and bailed at 90 cents. 

I made 65k on that trade, took a $200 bottle of French bubbly home to the missus and paid off half the mortgage.

As Tech said...life changing.

Cheers

Sir O


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## johnkerr (18 April 2012)

Great job Daniel. Best of luck in future.


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