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

frogen · 1 June 2008

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

The little old lady who taught me my trade gave me some early advice
'look after your pennies and the pounds will look after themselves'.
Being from the old school, she also told me that instead of concentrating on trying to earn more, I should try to spend less

Come a long way since then

Trembling Hand · 1 June 2008

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

frogen said:
instead of concentrating on trying to earn more, I should try to spend less

Come a long way since then

I couldn't disagree more. There is only so much you can reduce you spending and in most cases you are reducing some very nice things about being alive. If you continue to work on earning more then you gain even more nice things about being alive.

tech/a · 2 June 2008

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

Trembling Hand said:
I couldn't disagree more. There is only so much you can reduce you spending and in most cases you are reducing some very nice things about being alive. If you continue to work on earning more then you gain even more nice things about being alive.

When 20 my father said to me
"Son you have no respect for money".

He is right!

It doesnt equate to being frivolous.

njc.corp · 2 June 2008

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

Great thread-

this is what i was told by my father and also Nick radge said to me-the markets will be thier the next day and so on-

so what i did was save for the last 5 years and try and do smart things-

all jokes aside how can u go wrong if in the mean time u are getting good education on what others have done wrong-

i must admit while saving u are temped to buy what ever u see and i have noticed that the things u want were nothing but to make your mind happy-

and u look back at it and say why did i buy that for-i could have done this -at least i would have made a dollar doing that-

thats my story on how i got my captital

Hope that helps-i know some can't save-i say its mind over matter-if u look at the end result-u can say one thing which i have noticed is so hard it today's world to say"- I OWN WHAT EVER I HAVE-

Nick--(melb)

nioka · 2 June 2008

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

njc.corp said:
-u can say one thing which i have noticed is so hard it today's world to say"- I OWN WHAT EVER I HAVE-

Nick--(melb)

It is not hard at all to say " I own whatever I have" . All you have to do is spend less than you earn. If you adapt that principle it becomes easy. All it needs is a little less greed and a little patience. Often driving a second hand car you own rather than a new one which is depreciating faster than you can pay it off is a good start.

P.S. Is it too hard to type 'you'. (one of my pet peeves.)

njc.corp · 2 June 2008

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

nioka said:
It is not hard at all to say " I own whatever I have" . All you have to do is spend less than you earn. If you adapt that principle it becomes easy. All it needs is a little less greed and a little patience. Often driving a second hand car you own rather than a new one which is depreciating faster than you can pay it off is a good start.

P.S. Is it too hard to type 'you'. (one of my pet peeves.)

p.s-my next thread-will contain at least one you- just for you-

Nick--(melb)

tech/a · 2 June 2008

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

Yes all well and good--BUT.

Correct use of other peoples money will ensure wealth.
Most successful people gain that success not from their own money but from the use of others.
With a good accountant its not as expensive as you might think.

Good debt--Bad debt.

njc.corp · 2 June 2008

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

tech/a said:
Yes all well and good--BUT.

Correct use of other peoples money will ensure wealth.
Most successful people gain that success not from their own money but from the use of others.
With a good accountant its not as expensive as you might think.

Good debt--Bad debt.

fair call tech-
one question for you-is their a % of successful people who make it work for them while using others money?

my view and only my view is that i would rather waste my own money if something went wrong which does happen-

Thanks

Nick--(melb)

wildkactus · 2 June 2008

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

Tech/a,
Have to agree, the only way I see it to gain substanial wealth is by the use of OPM (other peoples money).

The use of OPM which creates wealth is a good thing and should be part of anybodys investment plan. That said it has to be managed well as it can soon turn into a bad thing, if let get out of hand.

A good accountant can be of help here.

dojara · 8 June 2008

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

cuttlefish said:
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.

Just an interesting read to follow on from cuttle :
http://www.theage.com.au/news/business/road-to-happiness-lies-in-health-family-and-friends/2006/01/15/1137259944644.html

dazers · 11 July 2008

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

The amount of capital required is dependant on the person.

After reading through the forum I was initially disheartened by the many people that claimed a good capital base to be between $10,000 - $200,0000

I dropped out of uni and worked for Woolworths for 8 months. The amount of time I worked was enough to get a $10,000 overdraft and a $9,000 credit card. (credit crisis anyone?)

With that negative capital alone I resigned from woolies and now trade comfortably (mostly) for income, despite knowing <1% about everything there is to know. This is of course at enormous risk, but the point is - "Other Peoples Money", and that you can do it, for establishing capital base. Don't be reckless about it though, as it may ruin a large chunk of your life. I am no where near 1st base but I'm defintitely not going back to home plate.

white_goodman · 11 July 2008

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

dazers said:
The amount of capital required is dependant on the person.

After reading through the forum I was initially disheartened by the many people that claimed a good capital base to be between $10,000 - $200,0000

I dropped out of uni and worked for Woolworths for 8 months. The amount of time I worked was enough to get a $10,000 overdraft and a $9,000 credit card. (credit crisis anyone?)

With that negative capital alone I resigned from woolies and now trade comfortably (mostly) for income, despite knowing <1% about everything there is to know. This is of course at enormous risk, but the point is - "Other Peoples Money", and that you can do it, for establishing capital base. Don't be reckless about it though, as it may ruin a large chunk of your life. I am no where near 1st base but I'm defintitely not going back to home plate.

i was thinking bout getting a margin loan soonish after id done a good amount of back testing/ paper-trading and was fairly confident in my trading plan... only using a 50% leverage.... im jsut hoping the bears are gonna be gone in a few months....

Trembling Hand · 12 July 2008

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

dazers said:
The amount of capital required is dependant on the person.

I dropped out of uni and worked for Woolworths for 8 months. The amount of time I worked was enough to get a $10,000 overdraft and a $9,000 credit card. (credit crisis anyone?)

With that negative capital alone I resigned from woolies and now trade comfortably (mostly) for income, despite knowing <1% about everything there is to know.

IMG!!

So I'm sorry but can you confirm for us mere mortals that you are trading with a borrowed capital of $20,000 paying compound interest over 10% making a "comfortably income".

:flush:

pottsy44 · 12 July 2008

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

prawn_86 said:
I am worried about my small capital base i think to myself:
"How many people my age who are studying full time, can travel overseas at least once a year, enjoy their life, and still SAVE 3 - 5k per year?"

ME ! Like yourself i study full time at uni (4 year degree) and I'm about to begin a diploma (i am 20). However, i don't work 2 days a week, i work full time, so like yourself i consider myself to be in a pretty good position, and considering in 6 months time i will also have a company car, i would consider this to be a pretty good position. As it stands currently i can save 10k+ p.a. and in 12 months time i will be able to save 20k p.a. Which would mean in a few years time i should have my capital goal of 50k.

tech/a · 12 July 2008

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

I dropped out of uni and worked for Woolworths for 8 months. The amount of time I worked was enough to get a $10,000 overdraft and a $9,000 credit card. (credit crisis anyone?)

With that negative capital alone I resigned from woolies and now trade comfortably (mostly) for income, despite knowing <1% about everything there is to know. This is of course at enormous risk, but the point is - "Other Peoples Money", and that you can do it, for establishing capital base. Don't be reckless about it though, as it may ruin a large chunk of your life. I am no where near 1st base but I'm defintitely not going back to home plate.

This has to be a rev up.
Nobody can be THAT stupid.

Lets do some maths--part of the other 99% needed to be learnt.
With $20k on credit (By the way $10,000 overdraft isnt possible without security).
You'll need a minimum of $400/ week to survive living with your parents.
You'll need to pay the loans another $60/week.

So you need to return 10%/mth just to survive.
Or 120% / yr.
All this while knowing <1% of everything you need to know.
I guess the 1% you do know is that you can fool most of the people most of the time.

I started this thread in a serious vein,I'd like it to stay that way!

dazers · 12 July 2008

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

I'm trying to fool anyone or big note myself. I was just trying to give some inspiration to some of the people starting out in low income jobs. I bet lots of hopeful people look through here with dreams of better lives outside their 9-5s, and spending more time with their families, only to be disheartened.

-The overdraft was secured by being employed for several months straight. This means I may or may not lose it when the bank reviews me next year, as Im no longer employed.

-I live in country SA with my partner and only pay $75/week rent. More fortunate than most probably. You can get an idea of all my expenses then, I don't need to give you an itemised list

-I only pay interest on my funds when I draw down on them below 0. This means about $10.00/days use.

-Once I've used the money to make money, it returns to the account and I don't pay interest on it.

-By day trading and writing near expired options, the cost per day of using the money is easily covered and then some.

I should add that this is not the only source of income I live off. And there is a bank fee I haven't factored in. There is nothing amazing or unbelievable about this. I wouldn't advise anyone to do it for obvious reasons, but if anyone is thinking about accepting the fact they have to be unhappy in their jobs and life forever, take hope from the example and don't settle for less.

Tysonboss1 · 12 July 2008

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

Trembling Hand said:
I couldn't disagree more. There is only so much you can reduce you spending and in most cases you are reducing some very nice things about being alive. If you continue to work on earning more then you gain even more nice things about being alive.

The trappings of wealth and the high spending material life style are very overated. creating a lifestyle that focuses on wasting less and investing more will lead to the ultimate prize,.... freedom.

But what happens in most cases is people earn an extra $1 and they spend an extra $1.5 locking them selves to there job.

Focusing on earning more and more just ties people to there jobs and creates bigger and bigger expectations, at the end on the day a $100,000 car just becomes the car your used to driving, $10,000 plasma becomes just the tv you watch.

You have to balance your offence ( earning ) with you defence (saving).

You should always spend less than you earn and invest the difference there by creating wealth and freedom.... if you do secure a higher pay then invest the bulk of it,.... don't increase your spending.

If you spend all that you earn and focus on earning more you'll never create wealth or freedom and instead tie yourself to your job.

Tysonboss1 · 12 July 2008

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

wildkactus said:
Tech/a,
Have to agree, the only way I see it to gain substanial wealth is by the use of OPM (other peoples money).

The use of OPM which creates wealth is a good thing and should be part of anybodys investment plan. That said it has to be managed well as it can soon turn into a bad thing, if let get out of hand.

A good accountant can be of help here.

Thats right,... Debt is like Fire,... used correctly fire safely heats your home, cooks your meals, If used by someone who doesn't understand the concept though fire will quikly burn their house done and scar them for life.

Before you play with fire make sure you understand the priciples, you have a plan for how you will safly apply it and moniter it to make sure it is acting the way you need it to and that it does not get out of control.

Once you understand it and know how to use it correctly though it will change your life and give you things that you never thought possible before. an investment structure that doesn't use debt is like a V8 running on 4 cylinders.

Trembling Hand · 12 July 2008

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

Tysonboss1 said:
The trappings of wealth and the high spending material life style are very overated. creating a lifestyle that focuses on wasting less and investing more will lead to the ultimate prize,.... freedom.

But what happens in most cases is people earn an extra $1 and they spend an extra $1.5 locking them selves to there job.

Focusing on earning more and more just ties people to there jobs and creates bigger and bigger expectations, at the end on the day a $100,000 car just becomes the car your used to driving, $10,000 plasma becomes just the tv you watch.

You have to balance your offence ( earning ) with you defence (saving).

You should always spend less than you earn and invest the difference there by creating wealth and freedom.... if you do secure a higher pay then invest the bulk of it,.... don't increase your spending.

If you spend all that you earn and focus on earning more you'll never create wealth or freedom and instead tie yourself to your job.

Thanks Tyson but you missed my point by 1000 miles.

Rolling the plasma screen rubbish argument out just shows how far off your understanding is of what I am talking about. Saving is slow and restrictive, working to increase wealth can have exponential results to not only your bottom line but your experiences and opportunities.

Sakk · 12 July 2008

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

Started out working part time in my brothers pizza restaurant at 15. Watched him blow out several times, no respect for money when he had it and not focused on the current business he was in....learnt what not to do!

At 21 I 'd worked two years and had nothing to show for it. Spent on booze, petrol for the V8, partying, petrol,more partying and....petrol...Ahh the good ol days. Realized I had to change to ever get ahead.

Saved 100K over the next 4 years, got married, bought a house paid off in 2 years. Asked my dad (European background) for advice as to what to do next........son buy another house...ok and then what....I don't know buy another house.....

Spent about $10k over the next few years on investment books, seminars etc
Bought, stripped and fully renovated 3 IP's
Kids came along, worked partime and started to learn how to trade

Took 4 years to develop a trading system that I finally jelled with my view on the markets and jelled with my psych........once you develop your own system, trading it becomes easy...

Currently doing two small property developments......moving towards a strategy of purchasing and subdividing existing homes and land into three, selling off the existing house and one of the new properties and keeping one as long term rental.....repeat.
Great strategy to build instant equity, longterm wealth and passive income.

All trading profits are currently re-invested to build account.

Not a very exciting but is working for me.

However, most importantly I've been able to spend most of my time with my wife and two kids.

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

frogen

Trembling Hand

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tech/a

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njc.corp

nioka

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tech/a

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wildkactus

dojara

dazers

white_goodman

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Trembling Hand

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pottsy44

tech/a

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Tysonboss1

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