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Dayclone
08-13-2006, 03:18 PM
Hey guys I've spent numerous hours on here and on bank's websites researching what is the best?

To my conclusion you can't always put money in one spot because it's dangerous. Like my dad told me once, if you put all the eggs into one basket and suddenly drop it... well there goes all your eggs and you loose everything however if you have serveral baskets with eggs and managed to drop a few then you'd still be on the safe side.

I'm 17 and honestly I love my life... I have a nice car, and money to invest... the only problem is... What to invest it in? RSP's?, Mutual Funds?, stocks? etc... the budget is $7000 start small and grow big.

I want something that will give me tons of yeild, within 3 years I can split money here and there and invest it here and there and grow big with it perhaps even wait till I have 10k and invest it in a house? Main point is... this thread is to help those that want to become millionares in the end haha or atleast live a rich life. Perhaps buying a ferarri when your 40 50 years old. What will give me the most out of the money I have now. Remember time is money.

Thanks in advance,
Steve

kaput
08-13-2006, 03:20 PM
.

Dayclone
08-13-2006, 03:31 PM
Well I would need money to go to University or College right? so what's the right investment?

snoop101
08-13-2006, 04:18 PM
invest in education. Go to university.

I wouldent say that is the best advice now a days. Going to university is not going to make you lots of money in the future. I would start by reading some books and talking with people that invest in different areas. Talk with some real estate investers, stock investers, etc. Take advice from them, but dont let one of them tell you what to do and what not to do. You should be able to find these people threw friends, family, and internet. Anyways that is my 2 cents.

max_boost
08-13-2006, 04:27 PM
Well it depends how risky you want things to get. You can invest like 89coupe, benyl, z_fan and crew. Dump it all into PLE, rol.a or which ever the current flavor is and watch it go up $0.20 and pow, make $3k by timing it perfectly. Now this is exciting stuff, I get tempted everytime I read their posts.

Or you invest like me, set it and forget it. Buy some moderate risk growth funds that are well managed with average returns of 9-13% and just let it sit there until you retire. Now this is boring stuff, my buddy put it best, it's like watching grass grow. :zzz:

Dayclone
08-14-2006, 01:40 PM
Well thanks for the advice I'll take it into consideration when I talk with my banker tomorrow.

Steve

doublepostwhore
08-14-2006, 02:54 PM
Honnestly RRSP. Invest in your retirement.

It is to late to start an RESP which is for education (the gov't matchs your investment up to 500 a year).

with an RRSP you get the best of both investment and security, not only is it an asset, (liquid at that!) but it is colateral that you can use against a loan (for line of credit or larger limit on a c-card).

You can choose an investment scheme at which the bank invest your RRSP money with, becuase you are young you should choose an aggressive growth porfolio (they can make upto 7-11%) only draw back is it is risky, so if the market dips, so does your funds. But hey you are young, and it is a gaurunteed growth.

DO NOT just open an account and let money sit in it, its best to look into building a portfolio. Dont let a bank intimidate you with telling you to drop 1-5K on each investment, do what you can afford, remeber they cant make money from you if they dont agree on your terms, so NEGOTIATE!

First plan of action though is to find a reputable and or trust worthy banker (hahah oxymoron) and ask all your questions, and share some concerns, ask them about what kind of returns, and portfolio's you can expect from them.

Most important thing is to shop around for a bank that eats the least of your money with commision and bank fee's.

doublepostwhore
08-14-2006, 02:58 PM
Sorry for the double post, but if you have a 7K car and decent credit, look into leverage- you might need your parents for this one.

Negotiate a loan for ~ 5-10K with a cosigner, and invest like MAD into a high yeild investment, do you have a steady job? If so then use the money from your job to pay down the loan/ skim the returns on the principle investment to pay down the loan + job money.

A secret that the wealthyest people in the world know and exploit is the power of other peoples money ;).

Khalil.e
08-15-2006, 11:27 AM
What do you consider a high yeild investment?

While DD is definately on the shoulders of the investor - what do you reccomend as a high yeild investment to look at? (Doublepostwhore)

is300izo
08-15-2006, 01:16 PM
sounds to me like doublepostwhore knows what he is talking about.

FlamingC19
08-15-2006, 03:18 PM
Sorry for the double post, but if you have a 7K car and decent credit, look into leverage- you might need your parents for this one.

A professor at my University said soemthing very similar to this. He also said something about doing it with Credit Cards? I cant really remember what he said but I think it was something like take the maximum amount of money you can out on your credit card then put it into some sort of premium savings fund and then make sure to pay it off at the end of the month!!! Then start the same thing the naxt month and I guess it slowly builds up in straight profit. Im not to sure exactly what he said so dont freak out but please offer some insight in what he was talking about!!!

FlamingC19
08-15-2006, 07:16 PM
My bad it's probably exactly what you metioned because when you take out money off a credit card you automatically pay interest right away so it doesnt even make sense.

broken_legs
08-15-2006, 11:09 PM
Originally posted by scotty_69
My bad it's probably exactly what you metioned because when you take out money off a credit card you automatically pay interest right away so it doesnt even make sense.

Some credit cards don't charge interest as long as you pay them back in 30 days... Maybe thats what he was talking about

Someone correct me if im wrong, but I doubt you can buy securities or investments with a credit card. And cash advances on credit cards you get charged right away.

JGerke
08-15-2006, 11:27 PM
If your young....look for higher risk investments. You can afford to loose that money(compared to a 45yr old with a family) so this would be the best route. Don't go getting a loan so that you can invest....Think about it, one bad investment decision, default on your loan and you get screwed. Also, if you plan on wanting to buy a ferrari when your 50, so much for RRSP's...wont be getting that money out in time. Also, this is not the best place to find investment advice, go read some books or talk to an ID.

AndrewMZ3
08-16-2006, 09:15 AM
Unless you're paying income taxes right now, I would save the RRSP limits for when you're making more income.

Ideally, leverage would amplify your potential returns, but it also amplifies your risk. As a novice investor, you may want to hold off until you're a little more seasoned before taking this approach.

Your interest in diversification is an excellent start. The only issue is that with only 7k to start with, you will have a little difficulty building a portfolio. At this point in time, I would suggest going to your bank and looking over which mutual funds are suitable for your risk tolerance.

Since you are under 18 and it sounds like you are interested in pursuing post secondary education, work with your parents to set up an RESP. I don't remember the details exactly, but the government will contribute 20%, and it will be tax deductible for your parents. Get them to set it up, and give them some money to throw in there. It's a quick and safe 20% return.

This is only a suggestion and in no way am I guaranteeing any results. You should discuss your plans thoroughly with an investment professional.

doublepostwhore
08-21-2006, 12:10 PM
Originally posted by JGerke
If your young....look for higher risk investments. You can afford to loose that money(compared to a 45yr old with a family) so this would be the best route. Don't go getting a loan so that you can invest....Think about it, one bad investment decision, default on your loan and you get screwed. Also, if you plan on wanting to buy a ferrari when your 50, so much for RRSP's...wont be getting that money out in time. Also, this is not the best place to find investment advice, go read some books or talk to an ID.

Sorry about the wait peeps!

This is a fallacy, you dont not invest in wild card investments, It is true that High Yeild investments carry inherent risks, but this is true for any investment, although the lower the return the more stable the investment thus less chance for it to tople and give you negative yeild (drop). Leverage is a very complicated "scheme" it isnt really a scheme but that is the easiest way of describing it.

Leverage is borrowing money to put into an investment that yeilds a higher return percentage then the rate at which the bank is loaning you the money hence revolving credit or line of credit. Typically a line of credit will run about 6-9% this is significantly lower then getting a straight up car/item loan from a bank.

I have been co-investing in a leverage set-up with my brother, we both had 7K sitting in a dead account (like 2% interest) so we combined it to secure an additional 20K loan with our parents cosignature. We secured the loan @ 7% over an 8 year term for 20K, with the total 34K we now had invested 30K of it into blue chip stocks/ a diverse portfolio including at the time AMD/O&G companies like precision/ and some others that I would perfer not to divuldge right now ;). Any ways as soon as we started to make returns by the following year (when we started skimming the accumlated returns) we were netting about 13% return and now a comfy 16% return, by skimming of enough money to pay down the loan, (principle + interest) we have cut our loan to 12K now, 1.75 years in. Keep in mind that not only is the original 3-K principle intact but it has accumulated with the REST of the return that wasnt necessary to pay down the loan. About 55% skim.

I wont lie to you, its very complicated and somewhat expensive to get into leverage and it is an active money maker, you MUST be ready to dedicate time and lots of patience a little balls to it.
A must is a trust worthy banker who's interest is not misplaced, and will NOT screw you with false information or false direction.

Keep in mind that leverage should be a tool you use EARLY in your portfolio as there is a chance that you can LOSE money and then have lost your investment + the loan. However it is not a super lucrative or under ground concept, there is alot of information and litterature written on the concept of other peoples money.

First thing to start with is some research.

As I said origanally start off with healthy investing and savings, RRSP Med-aggressive to most aggressive, dont be scared off by the fools that get scared about fluctuations, over a 20 year investment a fluctuation here and there result in a loss that is nominal in comparison to the accumulation.

Scotia bank used to run seminars, look aroudn the net and see if they still run them.

I am with Scotia BTW and for my day-day investments (day trades) I am with TD.

doublepostwhore
08-24-2006, 02:46 PM
Originally posted by AndrewMZ3
Unless you're paying income taxes right now, I would save the RRSP limits for when you're making more income.

Ideally, leverage would amplify your potential returns, but it also amplifies your risk. As a novice investor, you may want to hold off until you're a little more seasoned before taking this approach.

Your interest in diversification is an excellent start. The only issue is that with only 7k to start with, you will have a little difficulty building a portfolio. At this point in time, I would suggest going to your bank and looking over which mutual funds are suitable for your risk tolerance.

Since you are under 18 and it sounds like you are interested in pursuing post secondary education, work with your parents to set up an RESP. I don't remember the details exactly, but the government will contribute 20%, and it will be tax deductible for your parents. Get them to set it up, and give them some money to throw in there. It's a quick and safe 20% return.

This is only a suggestion and in no way am I guaranteeing any results. You should discuss your plans thoroughly with an investment professional.


Two things dude, he is 17 that means he can build his resp for 1 year, the gov't give you that "return" (which is then again taxed) AFTER 1 year of investment, so essentially he is SOL with the RESP.

Another thing... you have a house/condo/morgage right? That is leverage my friend.

EVERYONE who has ever bought a house and made money when they sold it, has used leverage. A mortgage is typically the lowest interest secured loan a bank will give you, while you are paying it off, you are making money as the property value increases.

Buy to rent units (the landlords) are using leverage. their property is appreciating, while their tenants are paying the mortgage, the extra money they make off every rent check is essentially the money left after the "skim" typically they put it away for "just incase" situations if their tenants default or they have to buy a new appliance or some shit.

The power of other peoples money is such a vaste and widespread tool that it is UNREAL the potential.

Auditor
08-24-2006, 03:50 PM
Have to agree with that, some people complain about being in debt, but I don't mind it all. I guess it just depends what kind of debt you have.

AndrewMZ3
08-24-2006, 04:11 PM
Originally posted by doublepostwhore



Two things dude, he is 17 that means he can build his resp for 1 year, the gov't give you that "return" (which is then again taxed) AFTER 1 year of investment, so essentially he is SOL with the RESP.

Another thing... you have a house/condo/morgage right? That is leverage my friend.

EVERYONE who has ever bought a house and made money when they sold it, has used leverage. A mortgage is typically the lowest interest secured loan a bank will give you, while you are paying it off, you are making money as the property value increases.

Buy to rent units (the landlords) are using leverage. their property is appreciating, while their tenants are paying the mortgage, the extra money they make off every rent check is essentially the money left after the "skim" typically they put it away for "just incase" situations if their tenants default or they have to buy a new appliance or some shit.

The power of other peoples money is such a vaste and widespread tool that it is UNREAL the potential.

20% return with very low risk is lucrative even if it's for a single year. As a student, he'll have tuition credits, etc which he'll apply against any income he's earned and unless he's working significant hours part time while in school, he will still come out on top after taxes. Even at the highest tax bracket, it's still a very nice return given the level of risk.

There's a significant difference between a mortgage and an investment loan in the volatility of the investment. As a novice investor, whether it's other ppl's money or not, you're still on the hook for the loan. I wasn't saying that utilizing leverage to enhance returns was a bad idea, I just said that as a novice investor it would be advantageous to gain a little more background before taking on elevated risk.

doublepostwhore
08-25-2006, 10:46 AM
^ well then we are both on the same page with the idea of gaining experience before using leverage.


First thing to start with is some research.


However it IS to late for an resp, he will not make the 20% return if he started one now. the first year you are EXEMPT from the 20%, the government starts giving you the 20% AFTER one year, and after 18 you stop getting any gov't added money.

On top of that you can not use an RESP for anything except education/childs education.

AndrewMZ3
08-25-2006, 11:59 AM
Originally posted by doublepostwhore
^ well then we are both on the same page with the idea of gaining experience before using leverage.




However it IS to late for an resp, he will not make the 20% return if he started one now. the first year you are EXEMPT from the 20%, the government starts giving you the 20% AFTER one year, and after 18 you stop getting any gov't added money.

On top of that you can not use an RESP for anything except education/childs education.

You're right, just did a search on the Canada SDC site, and it looks like students 16 and 17 require some contribution to be put in by the age of 15 if they are to be eligible for the CESG.

So if you don't already have an RESP set up, the only benefit of putting money in now is that your investment will grow tax free which probably doesn't benefit you any since you're probably not paying much taxes as it is right now.

With 7k it's still rather difficult to build a good portfolio especially when you take into consideration the commission you'll have to pay. Also, with a 3 year time horizon, you'll be looking for a somewhat liquid investment. I guess the key detail that you've somewhat left out is how risk averse are you? This is a critical detail especially given your time horizon.

biggie_82
09-05-2006, 08:11 AM
Here's my take on this:

RESP's as already mentioned is too late to attract the CESG but still can be opened to invest for tax sheltered growth.

I highly recommend steering clear of RSP's given your age (unless you are making the big $$$ already). Reason being is that there is no advantage to starting one given the fact you wouldn't benefit from a tax perspective.

To early for mutual funds as you need to be 18.

I would say look at getting a college/university education at some point. It doesn't have to be right away but should be highly considered. The $7G's could be put into a high interest savings account or GIC and money used towards tuition/books.

If RESP is in existence or hasn't started yet put the money there. RESP's don't have to be terminated for 25 years from the open date (reason why I said you don't have to start school right away). Growth is tax sheltered and principal is already taxed at the time of contributions. If you withdraw to pay for school only the growth portion is taxed in your hands an may be negligible since your education tax credit should offset it.

Education isn't a bad investment. I would consider using your money for this purpose above all else.

pinoyhero
09-06-2006, 02:10 PM
I agree invest in education if argue that for someone with highschool only there is no better ROI

Celica TVS3
09-09-2006, 12:08 AM
^ I agree to an extent but hard work without post secondary will take you a long way as well. Personally I have a university degree but in some ways I feel that those who jumped directly into the workforce got a four year head start. That is those those who strived to excel at what they were doing not just the people who showed up for work.

In fact Iím surprised Rage2 hasn't jumped in already.

When you consider the future value of your 7k at retirement it will make you not want to spend it. Haha, if you're interested google 'time value of money'.

As far as what to put it in, you're probably not experienced or dedicated enough, to invest wisely in stocks & bonds directly - not to mention that the commissions of a diversified portfolio would be a little high for you to go this route. If you're looking to park it and forget about it for a while you might want to look into a 'fund of funds'. This is essentially one mutual fund that is invested strategically into a bunch of other mutual funds to provide the unit holder with a certain degree of risk. The benefit is that you're portfolio is fairly safe and well diversified, the drawbacks are you've diversified away a bit of potential for return and you're paying a rather steep fee. Also, if you're income right now is low because your a student don't invest in an RRSP yet, save the tax benefits for when you're actually earning a decent income.

Most of that is said above but Iím bored so Iím reiterating.