21 y.o with 25k wanting to start investing...any good tips/suggestions?

Hi guys,

I'm new to this forum so I don't know if this is the right place to ask the question, so please let me know if it's not.

As the title indicates, I'm a 21 year old uni student in Australia and I'm interested in investing in some stocks, securities etc, but am not sure how to start. I have 25k sitting in a savings account and only earn interest from that. I don't have any major debts or student loans and my living expenses are minimal. I work part-time and have a Super fund with about 2.5k.

I'm not expecting people to tell me to "invest in x and y stock", but rather, I'm looking for some guidance or resources on investing 101 that I can use to educate myself in order to make investment decisions.

Given my inexperience and current finances, I'd appreciate it if someone could offer some tips/suggestions on where/how to start, how much I should invest (or whether investing is even a good idea) etc.

Cheers

 

Your Making a great start!

The fact that you are trying to find out what options are available to you and how to educate yourself is a fantastic start - you need this pro active attitude to be successful, a mindset that not everyone has.

Personally we have built an investment portfolio that provides a passive income that will now allow us to not only keep investing but travel full time - our goal from the beginning. I personally started about the same age as you - the hard work is worth it.

We shall personally be looking at international stocks or australian companies with overseas interests on the stock market, it is very volatile in Australia and we personally think a good time to watch, learn and know your market. We also have a strong interest in health and food related stocks - something no matter what the economic climate people still need.

 

" I'm not expecting people to tell me to "invest in x and y stock", but rather, I'm looking for some guidance or resources on investing 101 that I can use to educate myself in order to make investment decisions."

Tharp Concepts. The basis of great trading.

Also - there are few books, worth reading:
"Trading Secrets" - Louise Bedford
"The Art of Trading" - Christopher Tate
'Taming the Bear" - Christopher Tate
"Reminiscences of a Stock Operator" - Edwin Lefevre
'Secrets for Profiting in Bull and Bear Markets" - Stan Weinstein
"The New Market Wizards" - Jack D. Schwager

 

The savings you have for your age are fairly reasonable - so I would be mindful to not erode it at this key point of time.

Build your knowledge - if you're looking at securities I'd suggest papertrading for a set period of time to see what your results are like being dipping in the real cash. The ASX has a sharemarket game which is a good tool for you to practice with: Sharemarket Game - ASX

Commit to it and see how you come out the other end of the game - this will help you make a strong decision on how you approach investing, as well as knowing your strengths and weaknesses.

 

Investing with sharks

Mate the rule to investing is you are surrounded by sharks a who call you dumb money and they call us that openly on on CNN, NBC etc. so most people who give you investing advice from this online company or that one are simply fleecing you. I have spent around 2 years being a sponge listening to all investing info from any where I could get it and most of them don't invest any better than I do.

Firstly I'm on here for two reasons one is to pass on what I have learned and the other is I am a gold brokers affiliate. That being said here are some things I have learned in the pass 2 years don't read any of the books people quote unless you have Investopedia.com website open at the same time as all these books assume you have more knowledge of investing than you do and is not going to help but confuse you. do not buy into the advisers that will send email after email to sell you services just use the sight to learn.

Do not invest without knowing what is happening in the world financially on a week to week basis and what your govt is doing to fleece you of any profits you might make. When you find advisers who are smart cookies at their trade don't follow their investment instructions to the letter. My advisers make more money than me because they see when to get into an investment but I lose less than them because I am better at seeing the drop in investments and get out before they do. Do not listen much to the talking heads on TV as they are often idiots who have no idea whats happening in the world. They are the people who loose their shirts in each market crash.
Do not subscribe to a service for their propriatory wiz bang algorithm or software because even someone like Jim Richards (CIA/Pentagon adviser on financial warfare issues) sells a service called the "Kissinger Cross" and it looks suspiciously like the Aroon indicator on a stock chart. So your paying for their research into the company, their experience in the world of finance but not their program.

First piece of advice stay out of the markets at this time unless its for short term stock you intend to hold no longer than 1-3 months. Rickard's, Ford and now Soros are telling people to buy gold and close and resize positions down. super wealthy like Soros and Buffett have listened to the IMF warnings of a new bigger crash for the past 18 months and have pulled large chunks of their cash out of the markets and have been buying hard assets such as entire railroad companies, tracks etc. When the big boys pull out you follow them. Keep around 10% of your investing capital in gold and or collectables that will rise in value when things turn to S@!t. Dont go crazy buying gold it is a hedge against bad times but not a very good investment for anything else. I would avoid the Aussie housing market for a while as we have not had the bubble burst yet and housing prices will plummet when it does. prices are through the roof because the Chinese are getting money out of china as fast as they can before it drops off a financial cliff over 300 billion each month so far. Soros suggests the next financial crises will come from China and I agree. Do not put your money into a new fixed term savings account because if the global financial slide continues like it is and there is every reason to think it will then money will dry up as people panic and you will lose most if not all if it. like in Greece last year banks lock up over night and the gov comes for your saving to fix what they stuffed up and in those time banks go belly up quickly.

Lastly watch every free seminar sites offer from investopedia, Agora financial, etc, because they are not just an advertising ploy for their service but a wealth of info and training. Best free stock market chart site tradingview.com heaps of the indicators you buy on other sites are free on this one and again have investopedia open to learn about what indicators are used for and what they track.

Find advisers that know what they are talking about Jim is the best for interpreting what the IMF says and what it actually means to the Elites.
Jim Richard's - Agorafinacial.com (Stock and financial markets)
Mark Ford - Portphillippublishing.com.au (wealthy business man the service mentors people wanting to start and or grow a business)
Biz opp detective -fitzroypress.com.au (they find start ups and online business opportunities and tell you how to go about it with clear instructions for each opportunity they find.)
The Motley fool - fool.com (open honest service on everything financial/market based).

 

ohh a short addition avoid Australian financial advisers/strategists as a rule they are notorious in this country for having no clue what they are talking about, charging large fees and losing you money. I am not speaking about Corey Batt professionally as I don't know him but the industry as a whole.

 

Hey 'investing101',

Contrary to other posters in this thread, I believe there are still good, honest and hard-working advisers in the Australian market-place who are not just out to make a quick buck from your transactions, and do actually have your best interests at heart. Sadly, there are probably more sharks and sharp-shooters, hence doing your own homework and learning what you can will hold you in good stead in the long term.

A good book you could start with if you want to learn about Aussie markets and investing principles is "The Intelligent Investor's Guide To Share Buying" by Tim Hewat. Now in its 7th edition, it's stood the test of time and he teach fundamental principles of value investing.

One of the first books I read when I started out and it's still one that I refer back to from time to time when I feel I need to review the fundamentals.

With your $25K, which I commend you on saving at such a young age, you'll want to make your first investments that offer a decent return for a moderate amount of risk.

I'm not a believer in timing the markets for the best time to get in or get out. Instead, look to the long term and keep adding to your investment portfolio through regular investments, i.e. a savings plan, and gradually as your knowledge and confidence increases, you can branch out into more sophisticated investments that offer higher returns. As long as you've done your homework, you can reduce the risk in these higher yielding investments and make a calculated risk decision that you are comfortable with. Hope this makes sense.

Short term trading with your entire savings account may not be the best thing for you at this time. Your lack of knowledge and experience will be your undoing in this game unfortunately. Sure, if you feel you want to play the markets to get some experience, allocate maybe $5K to a trading account and learn some charting skills and how to identify patterns that offer a high probability for at least a 2 for 1 return on your capital. Meaning, for every dollar you put into a trade, expect to get 2 in return. I generally don't trade setups with less than a 3 for 1 expected return. Trading takes skill, patience and discipline to control your emotions when the markets move against you, and also to not get carried away with the euphoria that comes from easy winfalls. Again, study, study, study.

Someone here mentioned Van Tharp's trading education books - these are great and will give you some good foundations to formulate your own trading style.

Longer term investing is what I'm all about these days, and I actually run a small Financial Life Management business where I coach clients in the areas of their finances and investments in relation to their life goals. An investment on its own is pointless unless considered as part of an overall plan and strategy for your life and what you are trying to achieve.

For example, are you looking to build wealth fast and live a financially free lifestyle by the age of 30? Or perhaps you are happy to work the 40 year plan and retire at 60 with a solid income stream and financial security for the rest of your life. Both paths entail very different investments and strategies, and both are achievable starting where you are now. The choice is yours.

So my advice to you is to get clear - as much as possible at least at your age as I know my plans changed many times as I matured - on the vision you have for your life. Wanting to be rich by a certain age is fine, just write it down and commit to that outcome. Then you can look for strategies that can get you there.

Through my business, we offer a holistic view of investing. Not so much on the actual investments but how those investments will fit in to your overall vision and plan you've laid out for yourself.

We can help you build up a share portfolio, invest in direct investment property, even coach you in starting your own business to generate some extra income fast to accelerate your asset acquisition. There are many options open to you, it just takes getting clear on what you want and getting appropriate advice that you can then back up with your own research and investigation.

Message me if you'd like to have such a discussion, happy to work with you one-on-one to help you make better financial decisions both now, and throughout your investing career.

Hope this helps.

Jeremy

 

Investing 101 - as I have said before I have spent 2 years being a sponge and I have come across loads of scam artists and just a few who are genuine. The Ripe Wealth Creation poster is one of those that should be taken seriously. Its very good site and the info I found on it marries up with what Mark Ford a wealthy Australian real estate investor has told us. There is a fair amount of good free advice and no bull from what I read. I even learned a couple new things.

Ta Jason

 

Hey There,

I was in your position about 12 months ago, but not with quite as much - good for you!
I was looking to go 50/50 in property with a sibling, and by chance attended an information seminar a co-worker encouraged me to attend and it completley threw me off property and I am so thankful it did!

I went and saw Peter Thornhill speak, and was enchanted by his words of wisdom. Prior to this, I was scared off shares and now I am a shareholder with an index fund.

As a side note, my sibling went ahead and bought an investment property and had terrible tenants which has drained his time and his savings.

I on the other hand, have happily sat back and just received my dividends - and chosen to re-invest them!

He is actually coming out again to speak on Monday 25th July at Beckett Theatre, 113 Sturt St (I saw it in a newsletter I am subscribed too).

Well worth the listen!

Good Luck!