Join our investing community

investing as an 18 year old

Discussion in 'Investing Strategies' started by Sarge, 5th Jan, 2010.

  1. Sarge

    Sarge New Member

    5th Jan, 2010
    Launceston, TAS
    dont know if this is the wrong thread, but here i am. I am 18 and joining the defence force next year, i am on around $53k a year, i wil be working full time. i want to learn about investmentments that i can use to make that money use full, and tern the 53K a year in to a million, eventully, but i am unsure where to start. i dont know the "veichle" to use for my investment.

    All i am looking for is some advice on where to start next year, so i can earn a million :)

    (please dont bag me wanting to make a million, i am goal orientated and it gives me direction, once i earn that million, i want to keep investing it to make say 10 million)
  2. Johny_come_lately

    Johny_come_lately Well-Known Member

    1st Jul, 2009
    SE Queensland
    Hi Sarge

    To make wealth you must Pay Yourself First. You take 10% of Any money you earn and invest it. Then you spend the rest. Easy!:)

  3. Billv

    Billv Getting there

    15th Jul, 2007
    Sydney, NSW
    For most people the biggest investment we make is when we buy our first home. Once we've done that then we should spend as little as possible and invest the rest.
    Being in the defence force there could be other benefits associated with it.
    Ask other defence officials what's on offer
  4. Jacque

    Jacque Team InvestEd

    16th Jun, 2005
    Hi Sarge

    Starting out, I would do things differently myself, and setting up an automated savings plan would be no. 1 on my list!

    Get used to living on 10-20% less than your net earnings and getting it transferred automatically from your pay would be a wise move indeed. Once you have a sizable sum invest in a short term deposit and hunt around for the best rates. I know others on here would have better ideas than I (all my spare cash sits in our offset mortgage account at the moment so I'm not up with the best deals currently) but I have heard ING mentioned a few times as having high interest rates for term deposits.

    Getting sufficient cash is often the most difficult part of investing in the first place. However, saving requires patience and commitment, traits which will set you in good steed for your future financial independence.

    Bill makes a valid point that many investors have had success with using property (and most often their own residences) as leverage to further invest, and whilst this is true, it may not be something that you're ready for quite yet. Given the credit tightening of the last 12-18mths, you will still need to have a genuine cash deposit (even with the FHOG and stamp duty concessions) of at least 5-10% when you do go property shopping. Depending on what you decide to buy (and where) this will limit you. I know that the Defence Force, however, do have generous rebates/assistance schemes with buying/selling your own PPOR so you may also want to investigate this further when it's time.

    Nice to hear from someone so young with an investing "head" on their shoulders. Keep posting :)
  5. GregR

    GregR Well-Known Member

    13th Jul, 2009
    Berwick Vic
    I have a number of client in the ADF, including my son.
    They seem to spilt into two camps, young men and women earning decent money, often for the first time in their lives, either blowing it on booze and toys or they have an attitude like you, set themselves up for their own future.

    I agree with the others, to achieve your goals make sure you have an automated savings plan and put more in there when you have surplus funds. It is also about balance of living now and for the future.
    If you are lucky enough (or unlucky depending on your perspective) and are posted to a conflict zone overseas, you make a lot of money so use this windfall wisely.

    The ADF have some attractive options for purchasing property, the DHOAS scheme and HPAS. You need to decide which is either work for you but generally you need 4 years service time to qualify. It will depend on your deposit available whether you purchase an owner occupier place, using FHOG and HPAS to assist the deposit or you purchase an IP as most other investors do without the ADF assistance before you qualify.

    DHOAS has limitation being a P&I only loan so if you are going to convert into a IP, you need to consider the benefit or not. As an example my son purchased an IP first in Brisbane, was posted to Townsville and purchased an OO flat using FHOG and HPAS when he had the 4 years service time up. He did not use DHOAS. Once he is posted again it will convert this to an IP.

    Good luck in the service.
    Let me know if I can help.
  6. kizz

    kizz Member

    10th Mar, 2010

    Just wanted to post that I am also in the Defence, and want to congratulate you on having smart idea's at this age.

    It's quite common to see younger people all cashed up, with job security, getting huge loans for toys that they end up selling because they can't afford them (in time) or write them off, so, well done.

    I deployed oversea's a few years ago, and echo GregR's comments about using the extra money (which, can be a very large amount depending where you go) wisely. I invested about 80-90% of what I earned oversea's, and think it's the best decision i've made. Depending again what job you do will depend on the demand for your skills oversea's, so, you may be lucky to deploy regularly, but, in saying that, use everything you have/earn wisely, and your dream of earning a million won't be a dream anymore, it will be your reality.

    Good luck mate, and enjoy the forces!