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young person looking to invest more

Discussion in 'Investing Strategies' started by mattybutler, 13th Mar, 2010.

  1. mattybutler

    mattybutler New Member

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    13th Mar, 2010
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    Location:
    townsville qld
    hi, I'm 22 years old and work in a underground mine earning anywhere between $130 000 -$150 000 a year (contract rates). I currently have a Investment property in innisfail north qld which i paid $245 000 for 18 months ago current value would be around $300 000. Its rent return is around 15000 pa. I now live in townsville and i need help on where to go from here. I am making a lot on money and doing nothing with it how should i invest it. i would like to buy another house with in the next 6 month because i do no see the point of paying 400 a week in rent when that could be paying another house off for me. I do not know much about share and stuff like that but would like to get into it but i need to know what to research first so any help would be great.
     
  2. Johny_come_lately

    Johny_come_lately Well-Known Member

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    Hi Matty

    With a wage like that, I would be inclined to really make a go of it. You could have some serious money when you get older.:rolleyes:



    Johny.
     
  3. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    I agree - if you are earning that kind of money, the banks will love you. I'd buy more property.

    If you are looking for a bit of diversification, have a look at low cost index funds or ETFs. They aim to replicate the market performance of your chosen index (eg ASX200), so only ever do "average" returns (ie no better than what the broader market does), but the management fees are low and you get good broad exposure to the sharemarket - over the long term, it should provide a good mix of income and capital growth.

    eg. buy some shares in STW (SPDR ASX200 index tracking exchange traded fund) - gets you exposure to the shares in the ASX200, weighted the same way that the ASX200 index is weighted. You watch the evening news, they say the ASX200 went up 1% today, that means your shares went up approximately 1% too :D

    ... but real estate is great too.
     
  4. mattybutler

    mattybutler New Member

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    thank you for that . Its taken me 4 years to relies that i should be doing more with my money then just spending it on cars and toys. I m not the smartest person in the world but if i put my full attention to something i can really achieve things i just need to study all this investment stuff as it is very new to me. the only reason i have the other house is because my folks made me buy it a few years back. So what other things should i be looking at to improve my knowledge of investing any good books that i should buy or anything.:)
     
  5. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    There's a lot of books on investing out there - some good, some pretty average.

    One thing to be careful of is that there is so much information out there on different strategies, it is easy to get overwhelmed by choice and get scared into not doing anything at all.

    My general advice to people starting out is to start with what you are comfortable with, start simple - there's always time to learn more sophisticated things later once you are more confident in how everything works.

    Have a bit of a search on this site for some of the threads where there have been lists of recommended books made.

    My advice is to read lots and ask lots of questions - that's what we are here for! There's a heap of information on this site you can access for free as well - and if you are unsure about anything you read here or elsewhere, just ask!
     
  6. mattybutler

    mattybutler New Member

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    thanks sims, i have been coming on this site every night for a couple hours and just reading threads an articles and the glossary even lol findind it very interesting
     
  7. Billv

    Billv Getting there

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    the simplest and easiest thing you can do will be to salary sacrifice as much as you're allowed into super.
    This way you save the 40% tax and it will be another investment vehicle for you..

    Do you have any savings?
    I'd borrow to gear the savings and invest in managed funds.

    Property could also be a good option and particularly in areas which have lost value or have stagnated since the GFC
     
  8. blingbling81

    blingbling81 Member

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    awsome income

    from 0-130 properties in 3.5 years by steve mcknight is a great book for someone just starting out it goes throught his story and how he did it and also tax,realestate agents,goals,and motavation very good read!
     
  9. mattybutler

    mattybutler New Member

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    yea i just finished reading it . it really opened my mind
     
  10. dollarsandsense

    dollarsandsense New Member

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    While your still young, a good piece of advice is to get rich slowly (remember the story of the hare and the tortose). Make small decisions and learn from those. Find and talk to people who have been successful. Good luck.
     
  11. Michealf

    Michealf New Member

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    Hello,
    I would strongly advise you to invest a portion of your wages in good investment education. When I started I thought that advice from piers and just books alone would suffice. You can learn this way but it takes a long time and you make mistakes(though not disasters) along the way.
    If I was in the position of starting my investment journey now I would definately 'back myself' with good education and personal mentoring.
     
  12. Nigel Ward

    Nigel Ward Team InvestEd

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    Matty

    Well done so make some hay whilst the sun shines.

    You say you're not the smartest person in the world - that's okay. In fact you don't need to be particularly smart.

    As some have already said - don't over think it.

    Buy good quality real estate (hopefully with some value add opportunity), buy a portfolio of large ASX listed shares (either direct or thru a low cost index fund), keep some cash on the sidelines to help buffer you, wait and repeat when free cash and opportunity presents itself.

    I don't agree with the advice to salary sacrifice into super. You're too young to lock that money away, despite the manifest tax advantages and the benefit of long term investing where the money is protected from being spent.

    By investing outside super you can still wipe out your tax bill with deductible interest and non-cash deductions like depreciation whilst having access to enjoy the fruits of your investing before you're too old to truly enjoy them :D

    The only downside to your current situation is whether or not the current income level is sustainable - if you think your position is very secure then higher levels of borrowing may be acceptable. But be a little cautious if there is a possibility of not being able to rely upon the high level of income for the short-medium term.

    Good luck with it.

    Cheers
    N
     
  13. TDFawaz

    TDFawaz Tony

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    Hey Mate, good work - you put in the hours and effort and it's paying off for you. Tony Fawaz
     
  14. ni

    ni New Member

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    Interesting thread. I'm in a similar situation. Well, not nearly as much income :( But 22 and (just started) in mining. Will be on 75kish within 6 months. Hopefully 100k+ in a year or 2.

    When I started the job I was really keen on getting my first investment property in Sydne. But in the 6 months or so it's taken to move from Sydney to start the job I've been reading all sorts of stuff and I really don't know if it's the right move? The fundamentals seem sound, extremely low vacancies and high immigration. So I looked at shares knowing it was a little volatile, but looking at the past few months it really looks like a downward trend. I don't see problems in Europe/US going away anytime soon. I've looked into gold/silver. It looks promising though I don't buy into what a lot of gold/silver bugs go on about with total colapses and the hoarding of beans/guns, trading silver for food in the future etc...That and no return.

    So I'm sitting on an OK amount of cash and saving like crazy but hate that the best I'm doing is getting ~6% in the bank. It's times like these I really wish I had an experienced mentor or at least someone with the same views on investing. Can anyone offer some advice/insight/thoughts on where we are heading please?
     
  15. Johny_come_lately

    Johny_come_lately Well-Known Member

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    Hi ni,

    I think most of us wish for an experienced mentor sometimes. But nobody can predict the future. I would be sitting on the beach in the Bahamas if I was a 'Guru'

    I think it is more reasonable to find someone who has similar investing veiws to yourself. Perhaps an investment club could help. Also the ASX has seminars and courses every month.




    Cheers:)

    Johny.
     
  16. Chris C

    Chris C Well-Known Member

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    Saving aggressively and being in cash is not the worst strategy in the world and 6% return before inflation in these times isn't something to snicker at.

    Plus cash gives you the option to make a swift move when a more obvious policy response becomes apparent. At this point there is a lot of volatility, because there are a lot of mixed signals from governments, central banks and businesses.

    There is a lot of game theory in progress - average punters would probably be wise to either be out of the game or very well diversified.

    I'm on the sidelines.

    :cool: