| Investing - Click HERE for Original Thread |
| Prudz_lude |
I am going back to school in september and need a way to be making money while i am in school. I will be taking about 3000 dollars from the profits of my cars sale, as well as another 2000 from savings from work.
I have a friend who has been investing since he was in grade eleven i believe, his mom made him do it which in turn was a very smart idea. He just graduated and was 2 grades behind me. Currently he is making 300-500 daily off his stocks. In grade twelve he was collecting 400 a day on average and laughed about it because he was making more than the teachers were and he was sitting in a desk.
I know this individual very well and i know that he lives a very very lavish lifestyle now. He buys jeans for 400 dollars all the time, bought himself a bmw, crashed the bmw, and had bmw fix it and paid 8gs in cash.
What i want to know is how many of you are involved in the stock market. With 5000 dollars what should i be looking at. My mom is an accountant and has always given me great finacial advice. she wants me to put a portion of my money in an rrsp. This sounds good and all but the return is very gradual. I would like to allocate about 1500 to the rrsp and add over the future. With the remaining 3500 i would like to look at other options. What stocks are you guys involved in? What kind of returns are you guys seeing?
I know my friend is very lucky with his success and that i should not expect the same returns. I know that i should be talking to my friend but the problem is he does not like to let people know anything about them. He prefers to keep quiet and just say "alot" of money is invested at the moment and he is/was in some high risk stocks.
Either way, some adivce on what stocks i should be looking at etc would be helpful. I would like to see my money double if not triple by next year this time. My ultimate goal is to be able to pay for a large portion of my mortage when i graduate uni in 5 years.
Thanks in advance |
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| EK9Hatch |
Unfortunately you are going to see no where near $400 a day. That is crazy. And to double or triple your money in 1 year will never happened.
Correct me if I'm wrong guys, but the average return people aim for is about 10% on their investment. So yeah, with $3,500 to invest, thats peanuts.
To be honest, investing $3,500 in any market (even high risk, etc, etc) will probably not get you anywhere. Also need to remember that many brokerage firms require a minimum investment (some of the firms require $30,000 - $50,000 to start out)
So yea, with that amount of money, you wouldn't make anything in the stock market. I would suggest maybe investing in drugs. Thats the only place you would actually make some decent returns :p
Jamie |
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| thumbz |
Hmm, this is where I can offer some friendly advice.
$3,500 is peanuts, but with penny stocks you could make some serious return if you pick right. I took out a $50,000 loan from the bank to start investing, and to say the least it turned out very well in my favor. I basically have enough money put away now to buy a decent house.
I personally will never buy RRSP's. My Grandma has $200,000.00 in RRSP's in her name right now, and if she was to cash them out tomorrow she would pay the government roughly $80,000 in taxes. I kid you not, she was going to do it and she got told that number by the people at the bank. So now she is leaving them in RRSP's til she dies and is giving them to my mom.
Bottom line, if you have $3,500 to invest, don't buy Coke stocks at $40 a piece or anything dumb like that. Find some companies that are looking to make some major break throughs in the next year and invest in them (usually these companies have quite low stock prices, many in the $5.00 range). I had CV Technologies stock when Cold FX came out, and it made me some nice cheddar. |
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| EK9Hatch |
Also, if you are looking for a fast gain, stocks are not for you. Investing in stocks is almost always a long term investment (there are rules to this, but for the most part its true)
Jamie |
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| ozzmodan |
You're not talking about investing, you're talking about trading. Trading is an extremely hard and very rare to make good money at it. If you want to learn about investing a good book to read would be "The Intelligent Investor" By Benjamin Graham. It was the book that started Warren Buffett on his path & was written by the person that eventually became a mentor to him.
As for investing in an RRSP, it's an "investment vehicle" not an investment. Basically the CRA agrees not to tax gains inside an RRSP (as well as doesn't allow you to claim losses). It also allows you to reduce your taxable income through contributions. The catch of course is that you're taxed when you make withdrawls, which despite what some people may say, does not make it a waste.
When dealing with investing/trading, the important thing is to question the sources of information, don't believe wildly positive (or negative) predictions & don't buy into any theories that you don't 100% understand. Remember Warren Buffet became the 3rd richest man at an annual rate of return of about 30%. Also asking strangers/friends what they have bought is a good way to end up broke.
Kyle |
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| SilverZ24 |
quote:
Originally posted by thumbz
I personally will never buy RRSP's. My Grandma has $200,000.00 in RRSP's in her name right now, and if she was to cash them out tomorrow she would pay the government roughly $80,000 in taxes. I kid you not, she was going to do it and she got told that number by the people at the bank. So now she is leaving them in RRSP's til she dies and is giving them to my mom.
That is stupid. The entire point of an rrsp is to get tax credits when you are in a high tax bracket and take the money out when you are in a lower tax bracket while it grows without being taxed in the mean time.
You don't retire and then withdraw the entire amount in one lump sum. That doesn't make any sense. She should be taking out something like 20-25k a year at which level she will hardly pay any tax.
Keeping it until she dies will just mean that it might be 250k and she will have to pay 100k+ in tax before your mom gets it anyway. She should really rethink that... She either doesn't understand how things work or the banker she was talking to wasn't giving good advice. |
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| Jord@n |
| I'd like some more information on investing as well. Recently I've started to contribute to an RRSP fund and I understand the basics of it but I don't see making much money in the short-term. What would you guys suggest for something for a 2-5 year investment. I'm thinking something that will allow me to save up a down payment for a condo or house. :dunno: |
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| EK9Hatch |
I'm not trying to be an ass, but think about what you guys are doing. You are asking for investment advice on a local car forum? :dunno:
If you are even half serious about investing, do some research, read some books and find out as much as you can. Then, once you have an understanding on what investing is about, you can lay out your options and figure out the best route to take.
Once you decide what type of investments you are looking to invest in, I would suggest talking to an investment adviser. Someone that does this for a living can give you good advice and head you in the right direction. They know what works and what doesn't from years of experience.
Jamie |
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| TrevorK |
quote:
Originally posted by Prudz_lude
I have a friend who has been investing since he was in grade eleven i believe, his mom made him do it which in turn was a very smart idea. He just graduated and was 2 grades behind me. Currently he is making 300-500 daily off his stocks. In grade twelve he was collecting 400 a day on average and laughed about it because he was making more than the teachers were and he was sitting in a desk.
I know this individual very well and i know that he lives a very very lavish lifestyle now. He buys jeans for 400 dollars all the time, bought himself a bmw, crashed the bmw, and had bmw fix it and paid 8gs in cash.
If your friend is indeed disclosing the truth to you about his investment results, which I highly doubt he is, then I would advise asking him for advice.
In the marketplace an advisor that consistantly returns 10-15% in the mutual fund they manage is hailed as a hero. So for your friend to have a consistant return in terms of triple digits (xxx%) annualized yearly, is truly a rarity.
Just because he spends money, talks like he makes money, doesn't mean he has money. I've met many people that make "hundreds a day" yet somehow forget to mention they also "lose thousands a day".
quote:
With 5000 dollars what should i be looking at.
What you need to do is decide what the goal of the money is, and ensure that the goal is realistic.
If your goal is to have the money provide you with an income while you're in school, then you're going to need a lot more money than that.
Your end-goal (As in, what you are saving for) combined with your risk tolerance will determine the best course of action for you. Until this is known, no one can give any sort of advice that would be somewhat accurate.
quote:
My mom is an accountant and has always given me great finacial advice. she wants me to put a portion of my money in an rrsp.
Why not leverage your mother's knowledge and connections and have her arrange for a financial planner to speak to you about what to do? Someone in the industry, such as herself, is bound to be able to find a decent planner that may be willing to do her a favour and spend 30 minutes with you to help set out what your expectations should be.
quote:
I know my friend is very lucky with his success and that i should not expect the same returns. I know that i should be talking to my friend but the problem is he does not like to let people know anything about them. He prefers to keep quiet and just say "alot" of money is invested at the moment and he is/was in some high risk stocks.
And this doesn't have you thinking bullshit?
quote:
I would like to see my money double if not triple by next year this time. My ultimate goal is to be able to pay for a large portion of my mortage when i graduate uni in 5 years.
Your goal is unrealistic.
If you took $5000 and had an annual return of 50% you would only come out with ~$38,000 (Not including taxes, which would definetely take a bite out of it).
The only people I know who can make this sort of return are those that own the pay-day loan shops, where they are legally allowed to charge 59% interest + huge fees.
I don't think that there is a legal/realistic way to earn 50% yearly growth on your $5000, without taking a very, very big risk. |
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| TrevorK |
quote:
Originally posted by Jord@n
I'd like some more information on investing as well. Recently I've started to contribute to an RRSP fund and I understand the basics of it but I don't see making much money in the short-term. What would you guys suggest for something for a 2-5 year investment. I'm thinking something that will allow me to save up a down payment for a condo or house. :dunno:
If you are saving up for a downpayment on a property the RRSP allows you to take advantage of the first-time home buyers plan. This allows a withdrawal from your RRSPs (I think it's still at $20K) to be put towards the property, and you are then forced to pay back the withdrawal over 15 years. It allows for your current funds to grow, tax free, within your RRSP and then you can pull it out (And pay it back later).
The other alternative is to invest in tax-efficient investments outside your RRSP. By using tax efficiency you can maximize the growth of your portfolio. Getting 10%/year in interest income is all fine and dandy, however achieving a 5%/year return in dividend income may actually prove to be more tax efficient (Due to our tax structure favouring dividends).
You have two different roads to choose from:
a) Do your own research (internet, people, books, etc...)
b) Visit a financial planner
Neither option guarentees success, and neither option is necessarily better than another. I would advise choosing between the two, then moving forward with tailoring your investment portfolio.
The sooner you can start, the better. |
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| Jord@n |
Thanks Trevor,
I am aware of the first-time home buyers plan and although it is an option, I'd like something where I can make higher interest. I have been and will continue to look into it personally, but I still am far too unknowledgeable to feel comfortable investing my own money. As to the comment about asking for financial advice on a car forum, don't jump to conclusions so fast. Just because I look for information here doesn't mean it is the only place that I look. The more advice and points of view you can get the better decision you can make. :thumbup: |
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| EK9Hatch |
quote:
Originally posted by Jord@n
As to the comment about asking for financial advice on a car forum, don't jump to conclusions so fast. Just because I look for information here doesn't mean it is the only place that I look. The more advice and points of view you can get the better decision you can make. :thumbup:
That is true, and surprisingly some very good advice has been given. Most of the threads here are filled with giberish and non-sense, so its nice to see some knowledgeable people post some advice.
The only thing I would add is, instead of reading books, searching the internet, etc OR talk to a financial adviser, I would personally do BOTH.
Having info from multiple sources is always a good idea and can better help you to make a final decision.
Jamie |
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| TrevorK |
quote:
Originally posted by Jord@n
Thanks Trevor,
I am aware of the first-time home buyers plan and although it is an option, I'd like something where I can make higher interest. I have been and will continue to look into it personally, but I still am far too unknowledgeable to feel comfortable investing my own money. As to the comment about asking for financial advice on a car forum, don't jump to conclusions so fast. Just because I look for information here doesn't mean it is the only place that I look. The more advice and points of view you can get the better decision you can make. :thumbup:
All of the investments that you can hold within your RRSP you can also hold outside of it, and vice versa. There are obviously some exceptions/rules, however there is nothing stopping you from doing mutual fund sales, holding mortgages or buying stocks/bonds from within your RRSP.
If you are investing outside your RRSP I would focus on finding the best after-tax return you can, which involves stocks, dividends and certain mutual funds (Like Corporate class).
One option to look into for more 'secured' (This is my definition of secured, and I understand others don't feel the same way) is in mortgages. You can invest in pools of mortgages to give you a slightly higher return, however it is taxed as interest income (Doesn't matter if you put it into your RRSP). http://www.carevest.com is an example of such, and one I've used. You can typically get 9-12% return on your money, and it's secured by real estate. If you are looking for options that are not 'traditional' then this is one avenue to consider.
If you're comfortable with some risk, then the mortgages are one option to consider as well as mutual funds (rather than speculate in the stock market itself). If you are looking for safer investments there are many dividend-paying stocks that are very favourable in terms of taxes, and offer good returns on solid companies.
There is a guy who wrote a book on how he retired at 30, which involved him investing $400K into dividend producing stocks. Because of the preferred income tax treatment, the before tax return is low, but the after tax return is high. I'm sure a quick internet search would find it.
If you have any questions, post away. I was in your exact situation only a couple years ago, so I have a sense for all the thoughts/feelings you're going through right now. |
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| ehos |
Take your $5000, ask your friend for a stock, buy. When you are making money, sell.
If it turns red, sell at -5 to -7%.
Repeat until your money is gone, your friendship is dissolved, or you've doubled your money.
And don't take advice on a forum, some of this RRSP talk should be MORE than enough evidence about the ignorance that abounds. Ie, Don't take my advice either. |
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| Prudz_lude |
quote:
Originally posted by EK9Hatch
Also, if you are looking for a fast gain, stocks are not for you. Investing in stocks is almost always a long term investment (there are rules to this, but for the most part its true)
Jamie
Honestly i am not looking at a fast gain. I just talked to my friend and his parents helped him start investing. Lets just say they gave him a huge chunk of money to play with.....
Either way i figure its a good way to get some money. If i start investing right now it will help me with future investments and how to handle them correctly. It's always best to start young and learn from mistakes while you still can. |
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| Prudz_lude |
quote:
Originally posted by EK9Hatch
I'm not trying to be an ass, but think about what you guys are doing. You are asking for investment advice on a local car forum? :dunno:
If you are even half serious about investing, do some research, read some books and find out as much as you can. Then, once you have an understanding on what investing is about, you can lay out your options and figure out the best route to take.
Once you decide what type of investments you are looking to invest in, I would suggest talking to an investment adviser. Someone that does this for a living can give you good advice and head you in the right direction. They know what works and what doesn't from years of experience.
Jamie
yah this dawned on me but i still figure that since some of you aren't complete idiots and have families that some of you might have some valid points to make and some helpful advice. I was not asking for them to explain everything in detail, just get me started in the right direction :D |
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| Prudz_lude |
quote:
Originally posted by TrevorK
If your friend is indeed disclosing the truth to you about his investment results, which I highly doubt he is, then I would advise asking him for advice.
In the marketplace an advisor that consistantly returns 10-15% in the mutual fund they manage is hailed as a hero. So for your friend to have a consistant return in terms of triple digits (xxx%) annualized yearly, is truly a rarity.
Just because he spends money, talks like he makes money, doesn't mean he has money. I've met many people that make "hundreds a day" yet somehow forget to mention they also "lose thousands a day".
[/b]
What you need to do is decide what the goal of the money is, and ensure that the goal is realistic.
If your goal is to have the money provide you with an income while you're in school, then you're going to need a lot more money than that.
Your end-goal (As in, what you are saving for) combined with your risk tolerance will determine the best course of action for you. Until this is known, no one can give any sort of advice that would be somewhat accurate.
[/b]
Why not leverage your mother's knowledge and connections and have her arrange for a financial planner to speak to you about what to do? Someone in the industry, such as herself, is bound to be able to find a decent planner that may be willing to do her a favour and spend 30 minutes with you to help set out what your expectations should be.
[/b]
And this doesn't have you thinking bullshit?
Your goal is unrealistic.
If you took $5000 and had an annual return of 50% you would only come out with ~$38,000 (Not including taxes, which would definetely take a bite out of it).
The only people I know who can make this sort of return are those that own the pay-day loan shops, where they are legally allowed to charge 59% interest + huge fees.
I don't think that there is a legal/realistic way to earn 50% yearly growth on your $5000, without taking a very, very big risk. [/B]
Thank you for the response trevok, i talked to my mom and she is good friends with the manager at the royal bank on whyte ave. She has made an appointment for me to speak to him and get me setup on the right foot.
From the sounds of it my friend is not telling me the truth but his parents gave him a rideculous amount of cash to play with. His parents are loaded and spoil him. I could see his returns being good but also his parents paying for alot of his personal expenses.
As for my investing. I guess my returns will be very small over the next 5 years but i plan on putting a good 5000 dollars every summer into my investments. I should be able to make roughly 6-7000 every summer vacation during my 4 months off of uni and over the next five years thats 25000 dollars on top of the 5000 already invested. I am already pretty frugal with my money so i am confident i can manage for a couple more years and be fine :thumbup: |
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| SilverZ24 |
quote:
Originally posted by EK9Hatch
I'm not trying to be an ass, but think about what you guys are doing. You are asking for investment advice on a local car forum? :dunno:
That is a funny comment considering many people here 'invest' all (or most) of their money on their cars. lol
Prudz_lude, sounds like you have a good plan and if you can stick to your goals you will do well. Good luck. :beer: |
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| midnite |
| If you have some good ideas, you should invest it in yourself and become an entrepreneur. |
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| Prudz_lude |
| I talked to my moms friend the other day. He advised me to start putting money into an rrsp because in about 5 years i will be looking at buying my first house. He also advised me to start saving a lot of my money in my personal savings account, learning up and researching how the market works ect. so that i can properly invest my money when i have more money to play with. Thats pretty much the just of it. He said i could make some small returns for now but it would be smarter to just save the money in a savings account and an rrsp for now and choose when the time comes and i have my mortage choose to put the savings into the mortage or to invest it since i will have much more to play with, and should by then, have learned how the markets work and be able to be successful. |
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| ehos |
I know forum advice is sketchy at best...
but from my experience, I love, LOVE dividend paying stocks. I can't tell you the number of times I've sold off 'winners' because I couldn't stand not having any return until I sold.
Dividends are ultimately what a stock should do. It's the most tangible return on investment (why else would you entrust your money to a corporation?). I think people lose track of that single fact. Capital appreciation is nice, but it's the tail wagging the dog in the market now.
And people say you're giving up growth for dividends. Nonsense! You buy companies with increasing dividends (or solid ones) and we'll see who comes out ahead. Historically, dividends have always ALWAYS made more money in the long run than non-dividend paying stocks.
(Inherently, you're buying a company that's making money and willing to return equity to shareholders).
Good luck with stocks. As Buffet says, it's the only real job in the world, the rest are nice pasttimes (doctors, lawyers, engineers) etc. |
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| ae1969 |
Invest in yourself. Education.
If you make the right choices it only gains in value and has a high rate of return/risk ratio. |
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| GOT BOOST |
Hi Prudz_lude and Jord@n,
I know Gord at the Strathona branch. He will refer you to one of the Account Managers, or the IRP (Investment and Retirement Planner) at the branch level. I do not recall the name of the IRP off hand.
Trevor K is correct. I would chat with a few bankers to find out their take and their suggestions. When you find a good banker they will know their stuff inside and out. Hang on to them and treat them well. They will do the same in return. Good bankers are hard to find. Most financial planers will not look at you unless you have alot of products and services at the bank with a decent size in investments.
Most Invest advisors will not look at you unless you have Usually $100,000.00 to $200,000.00 as a minimum to invest. Now some Advisors will take you on with a smaller portfolio if there is opprotunity to grow and develop their clients, or there is a good family connection.
Mike |
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