When I ask about investing I don't mean in a good time or beer (short term investment)

I respect people like mrodgers that have invested in family rather than wealth and I know a lot here are young and are enjoying life without too much thought about the future. But it is never too early or too late to start thinking about investing and you don't have to be rich to think about investing.

I thought it might be good to stimulate a discussion on finances and achieving finacial independance to see if there are any others here struggling to achieve this goal and maybe to get some others to think about investing .

One of the primary realisations for me is that to achieve true finacial independance I need to get my money working hard for me so that eventually my money is making more than I can make at my dialy job.

One principle that I'm sure all have heard is "It's not how much you earn but what you do with what you earn." This thought in conjunction with a long term strategy is the first step towards financial independance.

There is a huge amount of options out there for making your money work for you and all too many people clamering to take it off you
So you need good research and well foundered strategies to make your money work for you rather than for someone else.

So what have you found that works?

I've personally spent alot of time studying technical analysis of the stock market and have actively traded the stock market for several years, I am not active in the stockmarket at the moment though, but still have a strong interest and intend to re-enter the frey at some future date.
For the last two years I have concentrated on houses and property development which leaves me with little or no spare time recently and while it's been a steep learning curve has been fun.

So before I bable on too much about risk/reward ratios and such, I just want to see if there are any others doing something similar or if there is any interest in such a discussion

One of our customers sells stock market advice. TBH I think they made a killing on the Google IPO and they set up their business on the strength (or lack thereof) of that one success. I don't know how successful they've been since, and I don't really want to know.

It doesn't look like a good time to be putting your money into the markets though. I know these guys are gambling on the market taking a huge correction upwards in the near future (taking the last ten years as a basis, the market hasn't moved, so they're thinking ten years of value is about to be added at some point) but with the current financial climate I wouldn't want to be taking that gamble.

If I were you I'd stick to property.

I invested in land. Buy lots and lots of land.

Quote from thisnameistaken :

One of our customers sells stock market advice. TBH I think they made a killing on the Google IPO and they set up their business on the strength (or lack thereof) of that one success. I don't know how successful they've been since, and I don't really want to know.
If I were you I'd stick to property.

People often think property is bullet proof, hence the saying "as safe as houses" but it's not always true.

We recently saw quite large reductions in property values on the east coast of Australia (although it's bouncing back nicely at the moment) and Japan saw major loses in property some 10-20 years ago. In the US they are seeing a downturn in some areas currently.

My point is that while there may be less risk in the property market there still is risk especially if you are highly geared (loaned all the money) and don't do your research (location, loc, loc). Property has other disadvantages as well, the obvious is that it is much slower to move your money around and there is high unseen costs to maintain property.

The stock market on the other hand is often associated with speculation and risk taking (people jumping out of windows in the '87 crash springs to mind) that image unfortunately stops people seeing the stockmarket as a valuable investment tool.

The interesting thing about the stock market is that depending on your investment strategy you can make it a very risky investment or alternatively quite low risk investment. In essence with the stockmarket you can taylor a risk/reward ratio that suites your circumstances, the more risk you take exposes you to more potential profits or losses, if you take a low risk strategy you can still get better than bank returns with a moderately low risk of losing money.

Don't for a minute believe that if you can make money at something that it is risk free. There is even risk in putting your money in a bank or for that matter hidding it in your matteress .

Quote from thisnameistaken :

It doesn't look like a good time to be putting your money into the markets though. I know these guys are gambling on the market taking a huge correction upwards in the near future (taking the last ten years as a basis, the market hasn't moved, so they're thinking ten years of value is about to be added at some point) but with the current financial climate I wouldn't want to be taking that gamble.

Short term trading does hold large risk I agree, I've made lots and lost lots more on short term trades - I put it down to education costs
I'd also tend to agree with your assesment of the market based on your discription, one principle I've seen acted out and believe strongly is that the herd is always wrong. If everyone thinks the market is going to go up then the chances are it want or it will be short lived. If everyone thinks the market is broken and never will recover that is when it will mount a recovery.

I saw this very dramatically in the gold price over the last several years. I remember quite clearly at one point where everyone was saying that the gold price would never recover to its former glory days as it was no longer relavant in our modern world, because it was no longer linked to currency and not seen as a safe heaven blah blah blah. Gold was worth about $180/ounce then, since that point in time it has steadily climbed to its current giddy hieghts of in excess of $900/ounce. Just recently everone has been saying that the demand for commodities is so high that there is no end in sight of how high the prices might go, low an behold that is right were things a seeming to come unstuck. I think too we are in for volitile times in the market in the near future. But volitility is opportunity also.

One of the good things about alot of the trading instruments on the stockmarket is that you can trade your view. I.e. if you think the market is going to go down you can short it and make a profit if your view is correct. So that's another advantage over property because you can make money most market conditions.

Quote from jayhawk :

I invested in land. Buy lots and lots of land.

I'd agree investing in land could be rewarding long term, but is it such a good idea to borrow to buy land? As you can't make alot of income from land until you sell it and it would have high holding costs. If you had lots of cash sitting arround idly it's a different matter I guess But I would have thought there are better ways to make your money work for you. Please elaborate on why you think buying land is a good strategy?

To be totally honest I think you'd be insane to borrow money to bet on the stock market. You might as well remortgage your home and put it all on a horse - at least that's a quick return if it comes in, and you've got professionals (bookmakers) who can give you a much more accurate assessment of what the risk is going to be, which they'll even publish for you before you take the gamble. Convenient!

Call me old-fashioned but I like the idea of earning what I spend by providing value to people. I don't like the idea of being in any more debt than I need to be - big purchases like a house are inevitable, a fifteen grand loan to bet on market behaviour is just frivolous.

But then again I don't particularly care about being rich, and in fact I don't think I even want to be rich. Yes I've heard all the benefits of "financial independence" but you've got to do something with your time even if you're rolling in it, and I'm pretty content to do what I'm doing already, with a couple of other irons in the fire in case I want to change paths.

When bombs are falling, buy real estate.

I buy and sell body parts.

Right now I have a nice collection of thumbs and big toes. Plus I have started a collection of tongues and back skin (all collected when the donor is still alive). Though I have no real interest in selling as of yet as the market is still a little slow.

We have a pretty good ShareSave scheme at work..we pay so much (between £5 and £15 per week) for 3 years, then get a block of shares in the company at preferential rates..
Last time I did it I had about 460 shares, bought at £4.90 and sold at £17.00. Should have kept the b**tards, they are at £24.00 now

you can go on horse races,but its like lottery

Quote from Bladerunner :

We have a pretty good ShareSave scheme at work..we pay so much (between £5 and £15 per week) for 3 years, then get a block of shares in the company at preferential rates..
Last time I did it I had about 460 shares, bought at £4.90 and sold at £17.00. Should have kept the b**tards, they are at £24.00 now

Hindsight is always 20/20 vision good too hear you did well out of them anyway. I like the idea of sharesave scheme's at work and also bonus systems as it can change an employees perspective dramatically.

Quote from thisnameistaken :

To be totally honest I think you'd be insane to borrow money to bet on the stock market. You might as well remortgage your home and put it all on a horse - at least that's a quick return if it comes in, and you've got professionals (bookmakers) who can give you a much more accurate assessment of what the risk is going to be, which they'll even publish for you before you take the gamble. Convenient!

I have never borrowed to invest in the stockmarket and would agree it is generally a bad idea.
A couple of points to ponder though:
- even though gambling may have published odds, it is a investment that has only two outcomes, either a payout or a 100% loss. Where as in the stockmarket there is many possible outcomes, with a 100% loss being highly unlikely (the company has to go into liquidation for that).
- in the stock market you can more effectively manage your risk.
- In the stock market you don't need to borrow to achieve leveraging, you can trade the movement of the main stock by its corrosponding warrants or options. Another way which is now my prefered way is CFD (contrats for difference) this allows you to see the same sort of returns on a $1,000 trade in say a blue chip stock like BHP as you would see with a trade of $10,000 were you borrowed the money. The downside risk is still there but you can limit you losses to whatever you like for example 3% then it will close out the position. The other advanatge of CFD's is that you can trade both long and short.

Quote from thisnameistaken :

Call me old-fashioned but I like the idea of earning what I spend by providing value to people. I don't like the idea of being in any more debt than I need to be - big purchases like a house are inevitable, a fifteen grand loan to bet on market behaviour is just frivolous.

But then again I don't particularly care about being rich, and in fact I don't think I even want to be rich. Yes I've heard all the benefits of "financial independence" but you've got to do something with your time even if you're rolling in it, and I'm pretty content to do what I'm doing already, with a couple of other irons in the fire in case I want to change paths.

I dont have any disrespect towards people that choose different ways of life, I have tried quite a few in my time so far. Some of the things I have done job wise are: car detailer 2yrs, postal clerk 2 yrs, offset printing 1 yr, machine operator in factory 7yrs, concrete construction and repair work 6 yrs, running a bussiness that provides computer network administrative support 2 yrs, lecturer in Introduction to computers 2 yrs, missionary in third world country 3 yrs, start up nonprofit organisation running school camps on a 25,000 acre farm 3 years, supervisor in factory 3 yrs, home renovations and building projects 2 yrs, stock market trading 2 yrs. Some of these were done concurrently.
So please don't get me wrong, I respect that there is many ways to live life and be fulfiled. I personally am not seeking finacial independance because I aspire to be "rich" if you know me in real life you will see I don't give a rats ass about what others think of me I drive a 20 year old car that looks very average live in a house that currently doubles as a building site and wear work clothes just about 24/7 lol.

For me financial independance isn't about living the high life, it's about doing work that I want to do and doing it when the desire is there and reaping the rewards of hard work rather than it going to company profits. Also being able to do other things when I so desire. In other words not being held to account by bosses and bank managers know or in the future

And as for the ideal of providing value to people by spending your money well 30 years ago when you were spending your money in localy owned stores on products that were made locally I might agree. But in this day and age of multinational conglomerates the "value you are giving people" is to a very few people, some of which would be shareholders or the top executives on there multimillion dollar bonus schemes

Banks, supermarket chains and the whole consumer oriented sociaty we live in is making obscene profits. I don't feel bad at all in denying them a little

You are doing well if you only borrow for a house and keep your depts to a minimum. Another principle I've learned is only borrow to invest in things that appreciate in value, never in things that depriciate.

I do not understand English very well but I have more or less followed the conversation, and I got the idea.

Right now, when it comes to earning money for a profitable and secure economic future, I am investing in solar photovoltaics.

The Spanish government encourages such initiatives and paid to 400-500% of the energy is produced from the company who buys this energy (electricity in this case).

A Fenosa (national electric company) since this will benefit not have to invest in infrastructure for customer support.

It is an ambitious project and future and already have a ivnersor interested to 100%.

How this works in Australia? There are these kinds of initiatives?

I would like to invest money in LFS in some future.. if im rich

I really wish I would've bought a few shares of Google back when they first started offering them for $100 each. Since then they've been worth as much as $700, and right now they're about to $500. :banghead:

Quote from Lynce :

The Spanish government encourages such initiatives and paid to 400-500% of the energy is produced from the company who buys this energy (electricity in this case).

A Fenosa (national electric company) since this will benefit not have to invest in infrastructure for customer support.

It is an ambitious project and future and already have a ivnersor interested to 100%.

How this works in Australia? There are these kinds of initiatives?

15-20 years ago Australia was at the forfront of solor technology but it has since dropped the ball on this which is a shame. The govonment here has been slow on incentives for solar technology.

The do have subsidy programs for individual solar instillations now though which amounts to at least 50% of the cost, alot of new houses are being built with solar panels and a grid connected inverter as standard in recent times which they claim will save about 15%. I doubt they are accounting for the replacement cost of the equipment when it reaches the end of its lifecycle

I personally have set up a solar installation on one of my properties which is out in the country and is not connected to the electricity grid at all. It has 6 panels of 110w each a 660ah battery bank and 3000w inverter/charger with a 10kva backup genset. I only have to run the generator when I use the power heavily over a whole day, otherwise it's 100% solar.

Don't be fooled into thinking solar is free though. Once you take into account that everything has an expected life span and will need to be replaced at some point you will see that it costs similar to traditional means of power. My batteries have an expected lifespan of 8-10 years the solar panels about 15 years, etc. I also found that alot of the government rebate schemes here were a false economy, as when they came out all the retailers and installers upped there prices and the government stipulates that to get the rebates you have to use licensed installers, have log books and have regular autorised maintenance. I did my sums and found I could still do it all cheaper myself even without the rebates

All in all I think it can be a good investment on your part to invest in companies that are profiting from a favourable environement. A couple of points though:
- something that seems to be a great long term investment usually ends up in reality being a good short term investment or at best medium term.
- governments can change there minds which could effect your investment.
- technology can change at a rapid pace, rendering current technology redundent.
- learn to read stock charts and some basics about price trends, even if your perspective is long term a chart can give you a timely warning to lock in your profits before it drops too much.

If your a small investor then your advantage is your ability to move quickly unlike those with 100s of millions as they are restricted by liquidity. Use this advantage. As small investors we have a disadvantage of having less good information than the big guys. But the big guys are slow moving by there shear size. If you learn to read stock charts you can see where the smart money is flowing and react accordingly. My point is don't invest blindly, know what your weakness and strengths are and plan accordingly.

Quote from chanoman315 :

if im rich

Alot of people live life like that, it's a lottery mentality. Many wish they could win lottery, but if you tell them with the right strategies, dedication and hard work they could make as much money as a lottery win in less than 10 years it just doesn't compute Investing is compounding and excellerates with time, people struggle with this concept because for the first 2-5 years the going will be tough.

I know of one young man where I work that choose to buy a 30k car (v8 HSV commodore) which he required a loan for. Three years later he is still paying it off were if he had bought a house at that time he would have made enough money to buy three such cars he complains that its too expensive to buy property now.

Quote from shiny_red_cobra :

I really wish I would've bought a few shares of Google back when they first started offering them for $100 each. Since then they've been worth as much as $700, and right now they're about to $500.

This is something that really kills motivation to invest imo, people focus on the high flying missed opportunities missing the more important point that the stockmarket over the longterm almost always outperforms the property market as a whole. We love to focus on the fast and exciting performing stocks rather than take safer more predictable outcomes of a basket of stocks or the market as a whole. It's like in the gold rush times of years gone by you had thousands and thousands of people feverishly looking for the next big strick. But then you had the people that really made money in those times that setup shops, pubs and entertainment establishments for the gold diggers to spend there money. Much more boring and much too much like hard work for most but they made more than 99% of the gold prospectors I'd suspect

I do not believe that stock charts have much to do with this issue.

I also believe, as I read you, confuses solar energy to heat water and the atmosphere of a building to a photovoltaic solar energy to generate electricity. Tell me if I am wrong.

What I will be in less than a year is to build a plant with electric solar panels.

The costs that this entails are very large and already have an investor. We know that has a high cost of maintenance, but the state encourages Spanish very well all these expenses as it is the future of this government.

While changing the government, according to our law and constituciíon, which was signed today is maintained over time.

If I signed for a 575% around 100 W, I was kept for life.

I am fully informed about this.

Follow this thread because I atren economic issues but do not share the excessive analysis of the stock market and I trust most of the hike of favourable business and market research.


Thank you.

Lynce I think there is abit of crossed wires happening because of language but that ok. I'm understanding more as you post more.

I thought you were a small investor investing in a company on the stock market from your fist post hence why I replied about stock charts and risks to technology and such.

If you are directly involved in the start up of a company or supplying funds for the start up of a company that is a whole different matter. I'm sure you will do well and have done your sums etc.

Quote :

How this works in Australia? There are these kinds of initiatives?

Australia has a bad track record of supporting startup businesses (alot in the past have gone offshore), we have recently had a change of governemnt though so that may improve in the area of green technologies.

I was talking about electric solar panels though, but I'm only an end user that has installed them onsite for personal use.
The information I was given is that solar panels don't last forever and do have a lifecycle and will need a schedule for replacing them.
Alot of people with not much knowledge of solar technology still believe that once install its free and that comment was in relation to how the average consumer might think.

Your right to not put too much trust in stock charts as a busniness man other than be aware that broadly speaking there is a business cycle and that listing a company on the stockmarket in the right circumstances can raise alot of cash which is it's primary purpose, people trading the stock market is secondary.

On a side note my views of the stockmarket is that you have all types of investors. From long term (buy and hold), medium term (hold for 6 months to several years) to short term (speculators may hold for less than a day upto serveral weeks)
Within these groups are investors that study companies purely by there fundamentals (fundamental analysis), those that study charts (technical analysis) to those that trade purely by buy/sell activity on the day.
All these are evident in a chart of a stock. You can see the long term trends, shorter term trends and finally the noise or very short term trends. The focus that you have on the stockmarket determines how much risk you take on.
My view is also that stockmarkets swing to extremes (overreact) I believe in the principle that again broadly speaking the stockmarket is driven by greed and fear.
Knowing all this and being able to enter the stockmarket without being caught up in emotional swings (which is the tricky part) while having a diciplined approach and well thought out stratagy can be and is a very good investment vehical. It's not for everyone though as it requires the right apptitude, alot more people loose money on the stock market than make money, money isn't magically being printed somewhere