Hey im new here , and to shares, so go easy!
I've always been interested in the idea of investing in shares, but unfortunately know very little on the subject. I found a couple of books which I thought would be a good read to get started, one is "Starting out in shares the ASX way" by the ASX (I believe) and the other is "The Rivkin Guide to Getting Started in Shares" by Jordan Rivkin (not the late Renne!)
Has anyone read these books, and do you think they'd be a good starting point?
Ultimately I'd like to be a successful day trading, flying my helicopter from my mansion to my office in the city, but I understand, for now, that's a pipe dream.
I happened across an episode of The Barefoot Investor over the weekend, and one segment of the show was answering the questions of new investors. The advice that was given over and over, was for new comers to look at investing in Listed Investment Companies (LIC's) and in particular AFI.
After a bit more investigation, it appears that for someone without a lot of money (up to $5000) investing in an LIC is a smart choice, as the company will use your money to increase their portfolio consisting of ASX 200 companies, of which your original $5000 wouldn't have purchased much.
This all sounds pretty good to me, but is there something I'm missing out on?
I understand that LIC's generally pay an interim and a final dividend per year, of about 13cents per share, meaning that $5000 original if bought into an LIC at $5/share will return you approximately $260 per year ($130 each dividend pay out). I also believe that the company pays tax on it's income (at 30% or something) hence no tax is required to be paid by me (the end trader) for money earnt from the dividend?
If in 5 years time, the LIC I invested in is trading at $10/share, I can then sell my 1000 shares, turning $5000 original investment into $10,000 - along with my 5 years of $260 dividend pay outs making a total of $11,300.
Does it seem that I have my head around this? Or am I way off?
Edit: Sorry meant to post this in the Beginners Lounge - could a moderator please move this thread?