Young Person

[damien275x]

Hi all.

I'm new and looking for some advice, or maybe not advice, just need to know how I should start. Basically at the moment I'm doing a trainee ship, and I get a mere $18k a year. I am 19 at the moment, and by the time I am 20 I will be on a salary of about $40k/year.

I want to start investing, even if it is a small amount. But all this talk on TV about the state of the economy etc is scaring me. To be honest I don't have a lot of expenses, I worked at the supermarket for 2 years while I was at school and I spend about $10,000 all up on my car, and it's pretty decent, and my mum and dad make me pay board but that's at a minimum right now since I only make $300ish a week. I don't really want to get a financial planner advice because that seems costly and not worth it, but are there any resources I can read, I've downloaded a few e-books and i'm reading through them. I can buy stocks online, and it seems pretty easy to do.

I know lots of people have lost their money, but does this mean that a lot of stocks will start to go up? Have they hit rock bottom? Yeah I'm not too sure what I am asking, I just want to try build up a portfolio and start younger, I have time on my side. I have dumb friends who fritter their money away on cars and it's sorta dumb, and pisses me off when they make more than me (working part time) than me on a trainee ship wage full time!! How to get started?

 

[Trembling Hand]

Yeah I'm not too sure what I am asking, I just want to try build up a portfolio and start younger, I have time on my side.


How to get started?

You are very lucky. You do indeed have time on your side so read all you can and learn. And practise with paper trades/demo accounts. There is no hurry to actually start doing better to learn what to do first.

 

[damien275x]

You mean to say, I keep spreadsheets as if I invested and just watch them?
That's a good idea, at least risk free. In the meantime I'll just save it up til I know more

 

[Rainmaker2000]

Mate, you are a lucky young guy which many on this thread would be envious of.............I bought my first stock round your age......I made 20$, paid 'discount brokerage' of $120.........but gosh I learnt a lot........that pays off with every investment these days.....

You should invest what you have without at all hindering your lifestyle and your personal development.....but your greatest investment will be the knowledge and experience within yourself...you will have 'skin in the game' and feel the 'vibrations' from an early age........that means something

For example, a retiree a year ago with only an average superannuation of $600 thousand and an average financial planner, just by investing 'safely' in the 'market index' has lost about $300 thousand in the last year.......it's pretty valuable knowledge to them, if they knew about the market personally compared to some average financial planner.......to a 60 yr old, the last year is permanent, to a 19 yr old its an opportunity, and to a 40 yr old it is a mere blip in a chart which shows the market as a whole always goes up over time...

Read, don't trade, invest......then read more and invest......analyse your performance and invest......and keep the cycle going......it's a skill for life and you have a chance to be in the top 1% pretty quickly

To start reading, I recommend: One up on Wall Street, chased with "Common stocks uncommon profits" then maybe the somewhat boring but vital 'Intelligent Investor

Happy tidings for the bear market

 

[Stormin_Norman]

use a demo account to trade whatever takes your interest.

when youre making money on that, throw a small amount into a real account and lose that.

by the time youve blown up 25 demo accounts and 3 live accounts youll get the hang of it.

oh and read. internet sites and books. and dont pay for a course. the same info is available online or in books.

book id recommend after u have a basic understanding : trend following by covel.

 

[cutz]

Hi Damien,

Some suggested reading http://www.moneybags.com.au/default.asp?d=0&t=1&id=3712&c=0&a=74 , not really about trading but covers market fundamentals, and perhaps open up a comsec account so you can check out facts and figures on particular stocks and get your data for paper trading as TH suggested.

Another book I can suggest is The Four Pillars Of Investing – W.Bernstein, its easier reading than the first book but I couldn’t find it in moneybags.

 

[Julia]

Hello Damien,

Well, good for you. I don't agree with the others that you are 'lucky'.
I think you've thought about how to manage your life, are thinking about your future, and are already making first class decisions.

That's not luck, that's the beginning of wisdom.

My suggestion would be that you go to the Education section of the ASX website and read this through, very, very thoroughly. Then read all of the Brisconnections thread. Then think about how important it is to have some level of financial literacy before you even think of putting any real money out there.

And, as the others have said, paper trading/investing is a great idea.

Really sensible point has been made about what to a retiree is a disaster, is to someone your age a great opportunity.

All the best and keep us up with how you go.

Julia

 

[Wysiwyg]

use a demo account to trade whatever takes your interest.

Experience is many, many, many hours.

Understand that position sizing is the key to meeting your objectives.

V. Tharp

 

[Stormin_Norman]

you pay no attention to the warnings about position sizing until you blow a few live accounts. :lol:

 

[macca]

Congratulations,

You are ahead of 99% of your age group already.

You may not quite understand how much, but the world changes all the time.

In the new world of electronic communication I have strongly suggested to my son that he concentrate on futures. I know that others will scream it is too dangerous but with Computers and reliable internet this is no longer the case.

Once you master futures (commodities, Forex etc ) you are set for a trading medium for life.

You don't have to stand aside while stock markets languish in Bear phases for 5 years.

If you are going to spend time learning and demo/ paper trading why not concentrate on something that is always available ?

Now that we can have demo, mini and micro accounts futures are about to become the new casino.

Start now and you will be learning a life time skill, who knows, in 5 years you may be teaching your parents new investing skills.

All the best

 

[prawn_86]

Welcome Damien, i was in your exact situation a couple years ago, although without the income as im a uni student.

I started when i was 18, im now 21. Like most other people i lost money in the 'downturn' but the experience has been invaluable, and if it saves me cash in the future when i really need it (ie close to retirement) then its moeny well 'spent'.

Personally i have found that i have learnt more than any book or course could teach just by having real cash in the markets. Thats not to say you shouldnt read books and demo trade/invest though.

I decided to put 1 years worth of uni fees into the market, instead of paying off my HECS, and im still going with that amount (although its smaller now) and i have learnt more than a year of uni.

If you have any other questions feel free to contact me via PM or post them here. Also i would suggest checking out the ASX share game on the ASX website. Its a good starting point without risking any real cash.

Hope that helps

Prawn

 

[Ashsaege]

I found that having money in the markets made me a lot more motivated to read up on books and do research. I first got in when i just turned 21 back in August 07.... interesting times! It doesn't hurt to experience losing money at an early age - you gotta learn from it.

I've really found Nick Radge's (The Chartist) insight to be valuable, and he has a great book too 'Adaptive Analysis For the Australian Stock Market'. I wish i got onto that book when i first started!

 

[roofa]

Yes Damien, it is a good time to get in, but there is no rush so do some research. If you’re a little impatience you could do a lot worse than looking at a “blue chip” investment.
Check out stocks who are leaders in their segment, see what dividend they pay and go from there.

 

[Julia]

Yes Damien, it is a good time to get in, but there is no rush so do some research. If you’re a little impatience you could do a lot worse than looking at a “blue chip” investment.
Check out stocks who are leaders in their segment, see what dividend they pay and go from there.

Re this last comment, bear in mind that as company profits decline, dividends may be reduced or wiped.

 

[awg]

Hi all.

I'm new and looking for some advice, or maybe not advice, just need to know how I should start. Basically at the moment I'm doing a trainee ship, and I get a mere $18k a year. I am 19 at the moment, and by the time I am 20 I will be on a salary of about $40k/year.

I want to start investing, even if it is a small amount. But all this talk on TV about the state of the economy etc is scaring me. To be honest I don't have a lot of expenses, I worked at the supermarket for 2 years while I was at school and I spend about $10,000 all up on my car, and it's pretty decent, and my mum and dad make me pay board but that's at a minimum right now since I only make $300ish a week. I don't really want to get a financial planner advice because that seems costly and not worth it, but are there any resources I can read, I've downloaded a few e-books and i'm reading through them. I can buy stocks online, and it seems pretty easy to do.

I know lots of people have lost their money, but does this mean that a lot of stocks will start to go up? Have they hit rock bottom? Yeah I'm not too sure what I am asking, I just want to try build up a portfolio and start younger, I have time on my side. I have dumb friends who fritter their money away on cars and it's sorta dumb, and pisses me off when they make more than me (working part time) than me on a trainee ship wage full time!! How to get started?

Spend your time at first reading threads on ASF.

That is free.

It should give you some ideas to concentrate on.

then you can use demo accounts.

dollar cost averaging is a good thing for a young person to do.

In my own personal instance, I initially invested 10-15% minimum of my salary into Managed Investments, then direct shares.

I always re-invested dividends and never made withdrawls, even to pay tax.

After 20 yrs of that, that particular account was worth over $300,000.

The power of compound interest!

was something my mother taught me as a young lad.

over the last 10 years, I have become much more serious about my investments, but I could not have been in my current position without disciplined saving and investment.

I also:

never owned a new car

rarely took expensive holidays

dressed like a beach bum

bought most things second hand.

This is the first year for a long time that I have not been able to re-invest at least 10% of my income, and I dont like it

 

[roofa]

Re this last comment, bear in mind that as company profits decline, dividends may be reduced or wiped.

Julia,

I wouldn’t mind knowing of any blue chip who wipes it dividend; this is a serious request, not having a go.
I’m sure we all agree dividends will be reduced inline with earnings, but my main point is to ensure the investment is made into a stock that will still be around in the future.
Something I did not do in my first foray in the market many moons ago with regret.

 

[skyQuake]

Julia,

I wouldn’t mind knowing of any blue chip who wipes it dividend; this is a serious request, not having a go.
I’m sure we all agree dividends will be reduced inline with earnings, but my main point is to ensure the investment is made into a stock that will still be around in the future.
Something I did not do in my first foray in the market many moons ago with regret.

divvies don't have to be wiped. Just anticipation of divvie cut will hurt, eg. Rio

 

[kam75]

How to get started?

I'm assuming you do want to learn how to trade? Then try to put some money aside in a savings account every week or two while you learn how to trade the stockmarket. Learn all you can about money management - it's very important. Get yourself a copy of "The Secrets for Profiting in Bull & Bear Markets" - by Stan Weinstein. It's a classic that will teach you a lot of good stuff in very simple to understand terms.
cheers

 

[michael_t_f]

The best thing for you to do is to learn as much as you can while saving even if it is a small amount each week. Don't just learn how to make trades, learn how the world works, get a good idea of business, politics, global events and there effects on different investments. Learn the terminology so you actually understand what you are reading. Read the newspaper every day or online news yes even the business section every part of it.
I was also 19 when I started investing I am now 26 and am well ahead of any of my freinds financially. I have invested in property, shares and private businesses.
I started as an apprentice earning the same as you.

Last tip, if you can get a Mrs. with the same attitude as you and keep a good work ethic all the time even when you have a lot of cash in the bank.

 

[Shrewd Crude]

hey damien,
you will do well...
im 24 and started out just like you with a few k only and kabaam over the last 5 yrs...
last year pretty sad, but made back a heap of losses with 'all in play' on CUE up 65% this year...
Get into stocks over the next 6 months or earlier as the market has crashed...

we are in a recession not a depression, this is why we have seen a rally out of depression status on the markets...

study/watch/and learnstocks before you make a play...

.^sc