Ideas for establishing a capital base to begin investing - getting past first base

[tech/a]

Its pretty clear from many threads like the housing threads and also in the shares sections that there are many who are struggling to get to first base.

Establishing a Capital base so they can invest in all those things that some of us take for granted because we have a base from which to start from seems like a pipe dream.

Most know the saying
"There are those who work for money and those who have money work for them"
Great how do I get enough money so it works for me in a meaningful way!

I thought this thread would be a good place for ideas,perhaps experiences in how you can build that base---you know its like going for that first job and the interviewer says---so what experience have you had!---Employ me and I'll get the experience---wont I.

How do you get that deposit for that house---should I use it immediately for a house or should I build my capital base elsewhere?
What are my options.

If I have 5k and thats all I have what are ideas I can use to make that money work for me?
How much is enough to get into each suggestion.

What have you done to get past first base and beyond? What are your stories/experiences/practical suggestions?

I decided when 20 that if I worked for a boss (I had for 3 yrs) he determined to a large extent my earnings,particularly in a large organisation --I was lost in the clock cards---nothing but a number.
So with nothing but a $1500 loan from my Father (Who charged me interest!!!) I went to work for myself.
So I could govern my own destiny---bloody hell now I had 80 bosses!

More in my next post --but please join in there are plenty here who would benifit from the wealth of experience 14000 members here must have.

 

[cuttlefish]

Re: Ideas for establishing a capital base to begin investing - getting past first bas

On your deathbed the amount of noughts behind the 1 won't matter.
Who you are will.

Focus on whats important and don't focus on money. Contentment, happiness, family, friends, well being, creativity, contemplation, inner satisfaction, achievement.

And while you're about it put 10% of your earnings, however they may come, aside ... or not.

When you have achieved wealth that enables you to live freely you will realise how little you know about life. You will also realise how much everybody, everywhere in the world, focuses on money, and how unimportant it is to happiness.

 

[wayneL]

Re: Ideas for establishing a capital base to begin investing - getting past first bas

On your deathbed the amount of noughts behind the 1 won't matter.
Who you are will.

Focus on whats important and don't focus on money. Contentment, happiness, family, friends, well being, creativity, contemplation, inner satisfaction, achievement.

And while you're about it put 10% of your earnings, however they may come, aside ... or not.

When you have achieved wealth that enables you to live freely you will realise how little you know about life. You will also realise how much everybody, everywhere in the world, focuses on money, and how unimportant it is to happiness.

A drink for that man!

Money is fun, but if a person is not happy when broke, he/she won't be happy rich either. (So says a wise man I once knew).

On the other hand, nothing wrong with attaining wealth (in $$ terms), but what is the cost?

Balance.

 

[w.m.buch@bigpond]

Re: Ideas for establishing a capital base to begin investing - getting past first bas

cuttlefish, I agree with your sentiment but life without cash can be a pretty miserable existance and although money dosnt buy happiness it sure as hell buys comforts.
As to getting started, I believe its more the person than the ideas ie you can lead a horse to water etc .
My first real cash was made in the heydays of the 80s , I stagged every new issue and punted on the speccies, made enough to buy a couple of units in a couple of years but lost the lot, plus more ,on black Monday on futures. I was 17 at the time That was a huge reality check and still acts as a deterrent to big punts on the market. Point is you can make it lose it and come back again but its the determination of the person.

 

[nizar]

Re: Ideas for establishing a capital base to begin investing - getting past first bas

Money is fun, but if a person is not happy when broke, he/she won't be happy rich either. (So says a wise man I once knew).

Im not argue the popular opinion that money doesnt buy happiness.

But I sure as hell would rather be unhappy and rich -- than unhappy and poor.

 

[cuttlefish]

Re: Ideas for establishing a capital base to begin investing - getting past first bas

cuttlefish, I agree with your sentiment but life without cash can be a pretty miserabe existance and although money dosnt buy happiness it sure as hell buys comforts.
As to getting started, I believe its more the person than the ideas ie you can lead a horse to water etc .
My first real cash was made in the heydays of the 80s , I stagged every new issue and punted on the speccies, made enough to buy a couple of units in a couple of years but lost the lot, plus more ,on black Monday on futures. I was 17 at the time That was a huge reality check and still acts as a deterrent to big punts on the market. Point is you can make it lose it and come back again but its the determination of the person.

Yeah - I completely agree - but what I'm trying to point out to anyone starting out is - if you are chasing $$$$ you are chasing hot air, fairy floss, paper tigers, puff the magic dragon.

Put the $$$ in its box and focus on what is important in life - who is important to you - what is important to you - how do you like spending a day - what makes you feel good, satisfied, content, ecstatic, euphoric. What doesn't.

And do that, while putting the $$$ aside - or using the $$$ to build up and establish your own vision of happiness/contentment/the good life.

 

[numbercruncher]

Re: Ideas for establishing a capital base to begin investing - getting past first bas

Its pretty clear from many threads that some people cant help but barrack for the direction of their bets.

If they are shorting stocks theyll post " markets definately going down today "

If theyre swimming naked in the RE game theyll claim everyone else is stoopid and struggling to save two bob.

No use being the richest man in the graveyard as pointed out already.

Happy Investing all

 

[wayneL]

Re: Ideas for establishing a capital base to begin investing - getting past first bas

Im not argue the popular opinion that money doesnt buy happiness.

But I sure as hell would rather be unhappy and rich -- than unhappy and poor.

Non sequitur.

The point was not that one should stay poor, but that there may be a price for becoming rich and that a balance of effort between training the mind to be happy, and chasing money should be struck.

Let's leave the cliche's well and truly out of it please.

 

[Timmy]

Re: Ideas for establishing a capital base to begin investing - getting past first bas

Wow, this thread went OT after the first post

Tech - when starting out with let's say zero capital, or near enough to it, an alternative to having one job is to have more than one, this can kick start the process of building a stake. Or get a job where there is potential to earn beyond a somewhat fixed salary (a sales job can provide this, for example, but there are others). Starting a business with very little capital is another option, as you point out. A specific suggestion may be to buy and sell products using low-cost distribution networks such as ebay and ebay-like structures (Craigs List for example). There are plenty on ebay, for example, who sell refurbished computers and components, and of course other products/niches.

Even if you have a small stake, actually getting into the market in a 'trading' capacity (as opposed to an 'investment' capacity) with little capital and working full-time is a challenge. If you are working during daytime hours and unable to access Aust. markets then trading offshore markets is an option. (Of course I am conveniently ignoring such challenges here as knowing what to trade and how, but thats a subject for other threads I am sure).

 

[cuttlefish]

Re: Ideas for establishing a capital base to begin investing - getting past first bas

Wow, this thread went OT after the first post

The myth continues. Capital base - irrelevant - tuppence a bag.

 

[Bill M]

Re: Ideas for establishing a capital base to begin investing - getting past first bas

Hello tech/a, establishing a capital base is very very hard, I would like to tell you my story.

I started off as an apprentice in a factory in Adelaide, it was nothing but an ordinary job. On the 1st weeks wages I wondered what to do with my money. From nothing I went to something. This is where the crowd gets lost. How come they survived well without working then they can't survive with working? I could never understand this massive shift from day 1.

The real thing is that every single person must save, save hard and save everywhere they can. I don't mean forgo a pizza on a Friday night with your mates I mean, give some money to your Mum for board, put some in the bank and keep some for fun. The problem in my days of youth is the same as now, as soon as they get their money it is destined for spending within the week, this is wrong.

So 1st. base is save some money, 2nd base is don't rack up depreciating debts and 3rd base is if you are going to borrow, then borrow for appreciating assets.

As a young fella I noticed a lot of old Italian families always had a house and the old Papa of the family still worked. The secret is no matter how unskilled you are you must work. All our immigrants to this country have been successful why can't we? Anyhow I gathered from my early days that real estate is a must, not many Italians were renting in my youth. Why pay rent when you can own for nearly the same money? Anyhow my goal was to have my own home. Today unfortunately people want everything now and aren't prepared to sacrifice time off for it.

I was a bit of a dummy during my apprenticeship but it paid off in the end. Whilst I had to do a repeat term through failure I locked myself in my bedroom to get it right while all my mates were out getting pissed in the pub, my time was at home studying but my ticket was in the mail.

This is how it worked for me, study and get your certificate, save your money, buy a property, pay it off ASAP, then save for your investments. This is where the capital base comes into it. It takes years and years of "real" hard yakka to get it but if you prefer Friday nights in the pub and living from week to week you will never get there.

In my later years I had heaps of overtime offered to me and I took it. All the other guys used excuses like "the tax man will get my money", "I'm going out tonight", "I can't be bothered", "I've given enough time to this place" and many more. But hey tell me, who was the smarter punter, the guy getting double time money or the guy in the pub?

You don't have to forgo fun as such, I had plenty of that, just save those $$$$ for investments, work hard and then the capital base will follow, hope that helps.

 

[cuttlefish]

Re: Ideas for establishing a capital base to begin investing - getting past first bas

I would strongly recommend reading the "Petit Prince" written by somebody that faced the reality of fate ,,, or not. But don't be the man counting the stars is my advice. (I've been him ... might still be him I'll get there).

 

[Timmy]

Re: Ideas for establishing a capital base to begin investing - getting past first bas

The myth continues. Capital base - irrelevant - tuppence a bag.

Sorry, what's the myth? I enjoy Mythbusters ... might be a subject for examination!

 

[Bill M]

Re: Ideas for establishing a capital base to begin investing - getting past first bas

When you have achieved wealth that enables you to live freely you will realise how little you know about life. You will also realise how much everybody, everywhere in the world, focuses on money, and how unimportant it is to happiness.

Some people are mentally deranged over money but to say it's unimportant is not right. You should check out some 3rd world countries where there is no hope of education, no hope of bettering yourself and no hope of getting a decent meal for the night, try telling those people money is unimportant, just an observation been O/S for many years myself.

 

[wayneL]

Re: Ideas for establishing a capital base to begin investing - getting past first bas

Some people are mentally deranged over money but to say it's unimportant is not right. You should check out some 3rd world countries where there is no hope of education, no hope of bettering yourself and no hope of getting a decent meal for the night, try telling those people money is unimportant, just an observation been O/S for many years myself.

Depends on whether the society is "money based". I've visited people who live in mud huts who have more happiness than we westerners ever achieve. Missus was born and raised amongst Nandi tribes-people and makes the same observation. But on the other hand, living in squalor in the slums of Calcutta is an entirely different story.

All depends on context, and on what context money is relevant to that third world society.

Oils ain't oils Sol.

 

[Bill M]

Re: Ideas for establishing a capital base to begin investing - getting past first bas

Depends on whether the society is "money based". I've visited people who live in mud huts who have more happiness than we westerners ever achieve. Missus was born and raised amongst Nandi tribes-people and makes the same observation. But on the other hand, living in squalor in the slums of Calcutta is an entirely different story.

All depends on context, and on what context money is relevant to that third world society.

Oils ain't oils Sol.

Yes that's true mate, I've met people like this too, they are very lucky to be happy with what little they have, cheers.

 

[tech/a]

Re: Ideas for establishing a capital base to begin investing - getting past first bas

Thanks Bill and Timmy.

Wayne,Numbers and Cuttlefish.

Why dont you give the thread a chance.There are young people who are out there on this board who are asking this question all the time perhaps even some not so young.

Of course money isnt the be all and end all.

But we live in Australia not Bangladesh we live in a capitalist society,we are encouraged to put as much as we can into Superannuation so WE can look after ourselves.Day in day out you see stories of pensioners who cannot buy food nor can they afford appropriate health care.I look at the MAJORITY of these people and I see people sitting waiting for death.Bloody morbid.If they had more financial freedom they would have most of those things you and I take for granted,better health,could afford to socialise,eat well,and have some comforts that they deserve at that age.Starting at 20 will give more opportunity to your retirement years than at 40---or NEVER

Give the thread a chance.

Its a genuine topic.

Surely you guys have some positive input particularly you Wayne,your self made arent you---whats the Wayne story,how would you do it all again?

 

[wayneL]

Re: Ideas for establishing a capital base to begin investing - getting past first bas

Thanks Bill and Timmy.

Wayne,Numbers and Cuttlefish.

Why dont you give the thread a chance.There are young people who are out there on this board who are asking this question all the time perhaps even some not so young.

Of course money isnt the be all and end all.

But we live in Australia not Bangladesh we live in a capitalist society,we are encouraged to put as much as we can into Superannuation so WE can look after ourselves.Day in day out you see stories of pensioners who cannot buy food nor can they afford appropriate health care.I look at the MAJORITY of these people and I see people sitting waiting for death.Bloody morbid.If they had more financial freedom they would have most of those things you and I take for granted,better health,could afford to socialise,eat well,and have some comforts that they deserve at that age.Starting at 20 will give more opportunity to your retirement years than at 40---or NEVER

Give the thread a chance.

Its a genuine topic.

Surely you guys have some positive input particularly you Wayne,your self made arent you---whats the Wayne story,how would you do it all again?

I appreciate what your trying to do here Tech, and I'm not being negative, merely advocating balance. You'll see that if you examine my posts carefully.

My story? Started a business in an industry in which Messers. Keating & Co. decided to unlevel the playing field (while claiming to level it). Sold that business with enough profit to buy a few cheap nags to flog around Flemington plus got my farriers ticket to pay for groceries in the lean times.

That basically meant getting up at 3am and riding trackwork till about 8 am, then getting under 500kg of bad tempered, poorly trained mongrel thoroughbred and trying to hang a bit of iron off it's toes... repeat 6-8 times, nurse wounds, collapse into bed, repeat the next day.

Won a few races and built up enough dough to trade for a living when my body packed it in.

I enjoyed it (apart from dealing with thieving jockeys, poaching trainers, idiot owners and corrupt stewards) but that was the price for me, a ####ed back, worn out knees and a cynical disposition.

If I had my time over, I'd have gone into 'puters/software etc. I could have been a nerd AND make heaps.

 

[numbercruncher]

Re: Ideas for establishing a capital base to begin investing - getting past first bas

Ok I'll play the game too, my original dismissal of the thread concept is because so much of your work Tech is aimed at telling people rather than inviting discussion or debate from what I read.

Anyway, reaching first base for me was when I adopted the concept that reducing costs can be much more effective than Increasing income.

I acheived this by contracting to the Cruise line Industry, I went from an average wage to an above average salary - but the real juice lay with eliminating ALL cost of living expenses - Food, Accomadation , utilitys , travel etc were then a thing of the past - 12 months later made it to base one.

Base two - Leverage.

Base three - recognise when the economic cycle is turning.

Remember wealth doesnt equate to happiness, throughout my Travels some of the most happy people with the biggest broadest smiles would fit most peoples here definition of living in poverty. If your pursuit of wealth is making you unhappy step back and take a new approach.

Debt doesnt equal wealth, especially in the current enviroment. The cost and value of money can both Decrease and Increase. By this I mean prior to this ongoing correction I liquidated virtually all of my stock porfolio, I can now buy back everything at a 30pc discount, essentially making my money worth 30pc more TAX FREE. This ongoing correction has got many many people a Eddy Grove, Leverage in a rising market rocks, in a falling one it can destroy you.

My last piece of advice is use Google and use it prudently, Instead of just typing into google " House prices to rise for years " or " Commodities supercycle " also try some bearish phrases such as " Realestate Crash " or " Commodities bubble " and then thoroughly examine both sides of the debate, then make informed decisions based on the most likely scenario. Knowledge is power.

Cheers.

 

[tech/a]

Re: Ideas for establishing a capital base to begin investing - getting past first bas

When I was 18 I had 2 jobs like most did then.Worked Saturday mornings pumping gas as well.

A Latvian guy GEORGE who I never had a conversation with taught me some extremely valuable lessons.

I'll tell his story then would be interested in what others get from it.

My second job was in a machine shop working the 6-10pm shift.Knocked of my main job at 5 then straight to the 2nd.
On my first day a Wednesday---my supervisor asked do you have a dollar.
He had a plastic bag filling with dollars.
"What for?"
"There is a tradition here which has been going on for 10 yrs.Pay day is Friday and each Friday GEORGES wages are raffled off,his pay is $120/week (At the time my total earnings----all jobs---- were $45)."

"Who gets the $s I asked"
"GEORGE---its OK even management get involved--and yes they did!"

Some quick calcs had me realising that George pocketed around $350-400 each pay day and had been getting 3x his wage for 10 yrs.

I later found out it was more like $500+ as many paid much more than $1 for a better Odds opportunity.Particularly those who had won the raffle.

I learnt a lot from George.
Interested in what others gain from this true story.
It was stopped I heard about 10 yrs later by the UNIONS---so much for entrepeneurship!
George introduced me to "Out of the Square thinking".