Trade without paperwork?

BarryTheBigBadTrader · 20 November 2023

Hello there,

I am fairly new to stock trading (and new to this forum). I have been observing sports trading on Betfair in my spare time the past 5 years or so. It seemed attractive at first, but not sure its worth it considering the lowish liquidity and highly competitive nature of the place....Considering ditching that plan to look more at traditional trading.

I haven't owned any shares for 20 years or so, mostly because I prefer not to complicate my tax return..... and part of the attraction of Betfair was that there is little to no paperwork, tax implications, etc etc... Is there a similar way to do stocks? Is it Derivatives? Is that the correct term to be looking at? (Where one bets on the price but doesn't actually own any stock)?

Thanks for any thoughts!
Barry

Value Collector · 20 November 2023

BarryTheBigBadTrader said:
Hello there,

I am fairly new to stock trading (and new to this forum). I have been observing sports trading on Betfair in my spare time the past 5 years or so. It seemed attractive at first, but not sure its worth it considering the lowish liquidity and highly competitive nature of the place....Considering ditching that plan to look more at traditional trading.

I haven't owned any shares for 20 years or so, mostly because I prefer not to complicate my tax return..... and part of the attraction of Betfair was that there is little to no paperwork, tax implications, etc etc... Is there a similar way to do stocks? Is it Derivatives? Is that the correct term to be looking at? (Where one bets on the price but doesn't actually own any stock)?

Thanks for any thoughts!
Barry

Hi Barry,

Whether you are looking to trade or invest in Shares (or anything else), you need to get comfortable with good record keeping (or paper work as you call it).

As a minimum, you need to keep a record of the buy contracts of everything you buy, and the sell contracts for everything you sell so you can work out your profit or loss for your tax return, you also need to keep a record of the income such as dividends paid to you each year.

———————

If you really want no paper work, I would probably suggest just putting you money into your super fund or an investment bond or some other managed fund, where they just issue you an annual statement.

Out of all investments the share market probably generates the least paper work, I Mean compared to a rental property it’s next to nothing.

Belli · 20 November 2023

It's a legal responsibility under the Income Tax Assessment Act for you to keep records. The dog ate my homework won't cut it if you are ever questioned by the ATO. You may never be but don't bet on that. It can be a costly exercise as I discovered when the ATO was being bloody minded despite being wrong.

Keeping good investment records | Australian Taxation Office

Check which records to keep to help you report your investment income accurately and claim deductions.

www.ato.gov.au

farmerge · 20 November 2023

Belli said:
It's a legal responsibility under the Income Tax Assessment Act for you to keep records. The dog ate my homework won't cut it if you are ever questioned by the ATO. You may never be but don't bet on that. It can be a costly exercise as I discovered when the ATO was being bloody minded despite being wrong.

Keeping good investment records | Australian Taxation Office

Check which records to keep to help you report your investment income accurately and claim deductions.

www.ato.gov.au

In this day and age of GST reporting I find it so much easier with the keeping of anything that is remotely required for the Lying and Cheating Department.

BarryTheBigBadTrader · 20 November 2023

Thanks everyone! I suppose there is no way around end of year paperwork from the companies themselves? That sort of thing? It's just a necessity then.

In the back of brain I just also remembered this...https://www.tradefair.com/...it's related to Betfair some how... they refer to everything as bets... I guess that's the same as stocktrading I'll have some time reading about that website...

They say 71% of retail investors lose money on that website. I like thems odds!

Thank you all

BarryTheBigBadTrader · 20 November 2023

With that Asset register linked, do you guys just enter stuff manually, or are there systems out there that can automatically update it for you?

Captain_Chaza · 20 November 2023

The best way to avoid Tax is to Stay Unemployed
Good luck and Have a Good Life

Belli · 20 November 2023

BarryTheBigBadTrader said:
With that Asset register linked, do you guys just enter stuff manually, or are there systems out there that can automatically update it for you?

I do not maintain an asset register for my share transactions. I keep the Buy notices and any DRP/SPP/Rights Issues transactions if and when they apply.

rcw1 · 20 November 2023

BarryTheBigBadTrader said:
I am fairly new to stock trading (and new to this forum). I have been observing sports trading on Betfair in my spare time the past 5 years or so. It seemed attractive at first, but not sure its worth it considering the lowish liquidity and highly competitive nature of the place....Considering ditching that plan to look more at traditional trading.

I haven't owned any shares for 20 years or so, mostly because I prefer not to complicate my tax return..... and part of the attraction of Betfair was that there is little to no paperwork, tax implications, etc etc... Is there a similar way to do stocks? Is it Derivatives? Is that the correct term to be looking at? (Where one bets on the price but doesn't actually own any stock)?

Thanks for any thoughts!
Barry

Hello there BarryTheBigBadTrader
rcw1 knows exactly what you are saying.

Gambling proceeds you pay no tax (as defined by the ATO and contained within exemptions)

Definitions of gambling activities | Australian Taxation Office

www.ato.gov.au

Exemptions | Australian Taxation Office

www.ato.gov.au

Sound really good, but only if you win ha ha ha ha ha, otherwise it's an oxymoron. Say you put a couple hundred on a horse using Betfair which is a true gambling platform, and it comes home then karchink... no tax applicable.
Share trading, much different beast. ATO rubs their hands with glee ... as if you earn you pay tax.... and ecord keeping is required to be spot on.

Moto of the story, stick with gambling ha ha ha ha ha ha ha

BarryTheBigBadTrader · 21 November 2023

rcw1 said:
Moto of the story, stick with gambling ha ha ha ha ha ha ha

lol well, it doesn't matter how much tax you pay if you're not making any money

I believe gambling income is still taxed if it is your primary full-time income. The attraction is not having to deal with disparate paperwork, filing, spending brain space on other things that isn't data analysis, etc...

Value Collector · 21 November 2023

BarryTheBigBadTrader said:
lol well, it doesn't matter how much tax you pay if you're not making any money

I believe gambling income is still taxed if it is your primary full-time income. The attraction is not having to deal with disparate paperwork, filing, spending brain space on other things that isn't data analysis, etc...

To be honest, I think you are going to have the best chance of making money, and have the lowest amount of paperwork if you just dollar cost average into share market index through an investment bond.

Look up “10Invest” by Australian unity.

If put money in there, it gets invested across the whole share market, they pay all the taxes for you at 30% and do all the paper work.

And, if you hold your money in there for 10 years, there is no personal tax to pay, you don’t have to include it on your tax return.

There is only two main rules.

1, you have to keep your money in their for 10 years, otherwise you pay personal tax on it.

2, only increase your contributions by 25% each year, for example if you put $1000 into the bond in the first year, in year 2 you can only add $1250, then $1562 in year 3 etc etc. if you add more than that the 10 year tax free counter restarts.

Belli · 21 November 2023

farmerge said:
In this day and age of GST reporting I find it so much easier with the keeping of anything that is remotely required for the Lying and Cheating Department.

He he. Gone are the days when you attached all the receipts and the like to your return, sent it in and some clerk did all the calculations for you. A simpler life back then.

farmerge · 21 November 2023

Belli said:
He he. Gone are the days when you attached all the receipts and the like to your return, sent it in and some clerk did all the calculations for you. A simpler life back then.

And now She and Me do a considerable amount of the calculations and a spread sheet so as to make sure the local bean counter will get it right.
Had some issues with how they add up 2+2 a couple of times.

BarryTheBigBadTrader · 22 November 2023

Hi Guys, just wanted to say thanks heaps for your thoughtful replies. So much helpful information here, gotta spend a few months trawling the forum

Value Collector said:
Look up “10Invest” by Australian unity.

I had a look, interesting. I suppose my motive is to try and make a living from it. If paperwork is a necessity for that well, I guess it just is. The motive for the original question was that I am starting out looking for a better alternative to sports trading. (which is really what I 'enjoy'...but its less about enjoyment than looking to make an income on my own terms)

Value Collector · 22 November 2023

BarryTheBigBadTrader said:
Hi Guys, just wanted to say thanks heaps for your thoughtful replies. So much helpful information here, gotta spend a few months trawling the forum

I had a look, interesting. I suppose my motive is to try and make a living from it. If paperwork is a necessity for that well, I guess it just is. The motive for the original question was that I am starting out looking for a better alternative to sports trading. (which is really what I 'enjoy'...but its less about enjoyment than looking to make an income on my own terms)

The biggest factor that will decide Whether you can make a living of the share market is

1, the size of your capital base

2, what percentage return you can consistently make.

If you only have $100k of capital. But need $100k to live off, you need to make 100% return per year, which is basically impossible.

In my opinion, the best way to make a living from the share market is just own enough shares that you can live off the dividends, that’s what I do.

So, then it becomes more about accumulating a large capital base, than it does actively trading. That’s where something like the 10Invest account can help, it would allow you to build a large capital base that you can one day live off.

Was never a “trader”, I made my way by earning as much as I could at regular jobs, but saving 50% of wages and using that to buy long term buy and hold investments, by the time I was 36, my share portfolio was paying more in dividends than I earned at my job, so I quit my job.

farmerge · 22 November 2023

Value Collector said:
The biggest factor that will decide Whether you can make a living of the share market is

1, the size of your capital base

2, what percentage return you can consistently make.

If you only have $100k of capital. But need $100k to live off, you need to make 100% return per year, which is basically impossible.

In my opinion, the best way to make a living from the share market is just own enough shares that you can live off the dividends, that’s what I do.

So, then it becomes more about accumulating a large capital base, than it does actively trading. That’s where something like the 10Invest account can help, it would allow you to build a large capital base that you can one day live off.

Was never a “trader”, I made my way by earning as much as I could at regular jobs, but saving 50% of wages and using that to buy long term buy and hold investments, by the time I was 36, my share portfolio was paying more in dividends than I earned at my job, so I quit my job.

Well done sir

BarryTheBigBadTrader · 22 November 2023

Value Collector said:
If you only have $100k of capital. But need $100k to live off, you need to make 100% return per year, which is basically impossible.

In my opinion, the best way to make a living from the share market is just own enough shares that you can live off the dividends, that’s what I do.

Well said. Thank you. That comment helps a lot. Makes sense to me. I'm also not psychologically ready to put down 1mil or anything Bit at a time sorta thing.

farmerge · 22 November 2023

BarryTheBigBadTrader said:
Well said. Thank you. That comment helps a lot. Makes sense to me. I'm also not psychologically ready to put down 1mil or anything Bit at a time sorta thing.

A bit like learning to ride a sweat machine ever so steady at the start

Trade without paperwork?

BarryTheBigBadTrader

Value Collector

Have courage, and be kind.

Belli

Keeping good investment records | Australian Taxation Office

farmerge

Keeping good investment records | Australian Taxation Office

BarryTheBigBadTrader

BarryTheBigBadTrader

Captain_Chaza

Belli

rcw1

Definitions of gambling activities | Australian Taxation Office

Exemptions | Australian Taxation Office

BarryTheBigBadTrader

Value Collector

Have courage, and be kind.

Belli

farmerge

BarryTheBigBadTrader

Value Collector

Have courage, and be kind.

farmerge

BarryTheBigBadTrader

farmerge

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