Teenager Wants to Start Investing!

[philworld]

Hi everyone!

I am currently fifteen years old with around $10,000 of money I'm willing to invest.
I also have a weekly income of around $100~200.
How should I get started?
I do not have any financial commitments and don't earn enough to pay tax.

I want to start investing but am not sure on how to do so and where to start.
I wish to make low risk investments but I am willing to hear you guys out.
I am also open to suggestions outside of the stock market.

E.g. my dad said I could invest in a car space in the CBD.

Thanks for your time,

Philworld

 

[cynic]

Hi everyone!

I am currently fifteen years old with around $10,000 of money I'm willing to invest.
I also have a weekly income of around $100~200.
How should I get started?
I do not have any financial commitments and don't earn enough to pay tax.

I want to start investing but am not sure on how to do so and where to start.
I wish to make low risk investments but I am willing to hear you guys out.
I am also open to suggestions outside of the stock market.

E.g. my dad said I could invest in a car space in the CBD.

Thanks for your time,

Philworld

The last time I checked, Australian teenagers under the age of 18 were subject to income tax whenever their annual income exceeded $416. Has this changed in recent times?

 

[So_Cynical]

The last time I checked, Australian teenagers under the age of 18 were subject to income tax whenever their annual income exceeded $416. Has this changed in recent times?

$100 to $200 a week, tax-free threshold $18,200...so Phil isn't paying tax.

http://www.ato.gov.au/individuals/content.aspx?doc=/content/00322113.htm

 

[springhill]

I want to start investing but am not sure on how to do so and where to start.
I wish to make low risk investments but I am willing to hear you guys out.
I am also open to suggestions outside of the stock market.

E.g. my dad said I could invest in a car space in the CBD.

Thanks for your time,

Philworld

What kind of return are you looking for on your 10k?

 

[So_Cynical]

10K hey, strange as that's exactly the amount needed to open an IB account...just a coincidence or fate???

:

 

[cynic]

$100 to $200 a week, tax-free threshold $18,200...so Phil isn't paying tax.

http://www.ato.gov.au/individuals/content.aspx?doc=/content/00322113.htm

My current understanding is that those rates do not apply to minors.

http://www.ato.gov.au/individuals/content.aspx?doc=/content/20046.htm

Edit: Upon closer examination, it appears there have been some significant changes with regard to excepted income since I last examined this aspect of Australian Taxation.

 

[philworld]

10K hey, strange as that's exactly the amount needed to open an IB account...just a coincidence or fate???

:

Sorry, not sure what your talking about. Did a quick google search. Are you talking about Interactive Brokers?

What kind of return are you looking for on your 10k?

Something that makes more money than leaving it in the bank at a low risk. I also have time on my side and as I mentioned I don't have to spend any money.

Thanks again.

 

[So_Cynical]

Sorry, not sure what your talking about. Did a quick google search. Are you talking about Interactive Brokers?

Yes sorry i was trying to be humorous, picturing dad opening a 10K account you can day trade with on your smart phone...just the start every new investor needs.

 

[cynic]

Unappealing as the current interest rates on offer by the banks are, I'd be reluctant to recommend anyone whom professes to be risk averse to invest elsewhere.

One only needs to peruse the ASF Storm thread to discover the likely outcome for those "risk averse" investors seeking higher returns.

 

[burglar]

... E.g. my dad said I could invest in a car space in the CBD....

I don't have a clue how to invest in a car space in the CBD
(which financial vehicle does your dad recommend).

It sounds brilliant!

Maybe you could try a REIT

Check out this thread:
https://www.aussiestockforums.com/forums/showthread.php?t=19776

Good luck!

 

[burglar]

One of the four big banks!

Here is a chart over 10 years for NAB National Australia Bank
compared to CBA Commonwealth Bank.

 

[philworld]

Unappealing as the current interest rates on offer by the banks are, I'd be reluctant to recommend anyone whom professes to be risk averse to invest elsewhere.

One only needs to peruse the ASF Storm thread to discover the likely outcome for those "risk averse" investors seeking higher returns.

Thanks for your input! Could someone please link me to the thread or summarise why "risk averse" investors don't do well?
I'm also open to other ideas other than stocks as well though

I don't have a clue how to invest in a car space in the CBD
(which financial vehicle does your dad recommend).

It sounds brilliant!

Maybe you could try a REIT

Check out this thread:
https://www.aussiestockforums.com/forums/showthread.php?t=19776

Good luck!

He says that buying a car parking space in the Melbourne CBD costs around 50-60k.
He says I could possibly negotiate with the banks on a 15% deposit and get a loan for the rest.
The car spaces are managed by a private company and you get majority of the money it generates.
Most, if not all, of this money will go to paying the bank.
He says that although the car spaces won't rise in prices dramatically, they won't drop and once it's paid off, it is a nice little source of safe, steady income.
He didn't go into specific numbers as he has a very vague understanding of how it works as well.

Thank you for your comment.

Yes sorry i was trying to be humorous, picturing dad opening a 10K account you can day trade with on your smart phone...just the start every new investor needs.

That sound pretty cool! What are the margins like for IB? Could someone in my situation realistically make some decent money from that?

Thanks!

 

[cynic]

Thanks for your input! Could someone please link me to the thread or summarise why "risk averse" investors don't do well?
I'm also open to other ideas other than stocks as well though



He says that buying a car parking space in the Melbourne CBD costs around 50-60k.
He says I could possibly negotiate with the banks on a 15% deposit and get a loan for the rest.
The car spaces are managed by a private company and you get majority of the money it generates.
Most, if not all, of this money will go to paying the bank.
He says that although the car spaces won't rise in prices dramatically, they won't drop and once it's paid off, it is a nice little source of safe, steady income.
He didn't go into specific numbers as he has a very vague understanding of how it works as well.

Thank you for your comment.



That sound pretty cool! What are the margins like for IB? Could someone in my situation realistically make some decent money from that?

Thanks!

For a teenager you're displaying a remarkably high degree of financial/business literacy.

The fact that you're a first time poster with nigh on impeccable grammar and spelling, leads me to suspect your sincerity.

Furthermore, there seems to be a recurrent central theme regarding acquisition of car spaces with bank finance.

In relation to my comments about "risk aversion" ask yourself this question:

"If this is such a good risk free investment, then why are the banks willing to lend me the money, when they could simply make more money by buying the spaces themselves?"

 

[burglar]

... "If this is such a good risk free investment, then why are the banks willing to lend me the money, when they could simply make more money by buying the spaces themselves?"

@philworld
Some here will pull your leg because they believe you are a university student with a little too much time on your hands. (believe it or not, we get a lot of that !)

@cynic
The answer is that banks don't care where their profits come from.
If you default, they still get a car space!!

 

[cynic]

@philworld
Some here will pull your leg because they believe you are a university student with a little too much time on your hands. (believe it or not, we get a lot of that !)

@cynic
The answer is that banks don't care where their profits come from.
If you default, they still get a car space!!

Well done, Burglar! Proceed to the top of the class.

Not only will the banks get the car space, they'll have also gotten it at a sizeable discount (due to investor deposit and profit from any loan repayments/fees actually paid).

 

[philworld]

For a teenager you're displaying a remarkably high degree of financial/business literacy.

The fact that you're a first time poster with nigh on impeccable grammar and spelling, leads me to suspect your sincerity.

Furthermore, there seems to be a recurrent central theme regarding acquisition of car spaces with bank finance.

In relation to my comments about "risk aversion" ask yourself this question:

"If this is such a good risk free investment, then why are the banks willing to lend me the money, when they could simply make more money by buying the spaces themselves?"

Thanks alot. I like to tell myself this but it feel good to hear it from someone else.
I understand your concerns about the loan. But as I mentioned, and as far as I know,the value of the car space will not drop and the costs associated with purchasing and maintaining the car space are again, as far as I know, very low. Therefore, if I were no longer able to support the loan, the bank would simply sell off the car space not lose any money, and in addition to that, will have made some money from the interest.

Again, this is only a vague idea and the costs and risks associated with a purchase are thus still unclear to me.

Well done, Burglar! Proceed to the top of the class.

Not only will the banks get the car space, they'll have also gotten it at a sizeable discount (due to investor deposit and profit from any loan repayments/fees actually paid).

This gets me a little excited.

@philworld
Some here will pull your leg because they believe you are a university student with a little too much time on your hands. (believe it or not, we get a lot of that !)

@cynic
The answer is that banks don't care where their profits come from.
If you default, they still get a car space!!

Haha, well to clarify, I am in Year 11 this year.

Thanks for your comments, much appreciated.

 

[prawn_86]

Firstly let me say well done for taking an interest in your financial future. I was about your age when i started taking an interest in investing. Just remember to have fun still in your youth, money isnt everything

What makes you think a car park space wont decrease in value? Do you have any historical data as to what car park prices have done? What if a new building and/or car-park is built next to where you buy? How quickly can you sell it if you need to?

I had a quick look and most of the ones i could find in Melbourne return about 5 - 7% net. So if you have a loan then you are basically paying the bank just to hold onto it one you take your interest rate into account. It might be an OK investment if you had the spare cash, but i would think it is hard to get out of if you need to, and the returns are not spectacular

 

[burglar]

... Haha, well to clarify, I am in Year 11 this year. ...

Hi philworld,
Welcome to ASF!

My children want to inherit a sizable portfolio!
But none wish to discuss shares or other wealth creation.
So I take delight in seeing young people have a go.

Most importantly, I'd like to see you survive.
"He who fights and runs away, lives to fight another day"!

 

[FlyingFox]

Firstly let me say well done for taking an interest in your financial future. I was about your age when i started taking an interest in investing. Just remember to have fun still in your youth, money isnt everything

What makes you think a car park space wont decrease in value? Do you have any historical data as to what car park prices have done? What if a new building and/or car-park is built next to where you buy? How quickly can you sell it if you need to?

I had a quick look and most of the ones i could find in Melbourne return about 5 - 7% net. So if you have a loan then you are basically paying the bank just to hold onto it one you take your interest rate into account. It might be an OK investment if you had the spare cash, but i would think it is hard to get out of if you need to, and the returns are not spectacular

+1. Do not assume that prices will only increase or stay the same. That is what risk is, hence no such thing as a risk free lunch.

Also read above. Your basically getting a 1-2% return (if that) for something that may or maynot even hold it's value.

But Good on you for thinking about your financial future. Hope you go a long way.

 

[FlyingFox]

.....
Most importantly, I'd like to see you survive.
"He who fights and runs away, lives to fight another day"!

+10. Words to live by.