My Plan
- Thread starter Hester
- Start date
Hester,
I think you should take 5K and start daytrading in order to see what it is like to be a slave to the market on a daily basis. In order for you to feel the swings and the consequences of your actions, it is important for you to feel it in your wallet. I have met numerous people who traded with thier own money for years, and ended up losing it over a bad trade or two. Is this really the life you want to live?
I can relate to you in the sense that when my father passed away when I was 19, I recieved over 250K in life insurance money. Granted this is not 4 houses and 700K, but it is by no means chump change. Rather than me trying to turn the 250K into 1MM, I decided to give it to a trusted financial planner who made it so that I was able to pay for 4 years college at a public school, and still be able to have over 250K in my account after all of that. The thing you really need to realize is that a college education is the most important thing for you to get at this point in your life. It is imperative that you have a back-up plan in case something goes wrong and you lose all of your money. I know you said you are going to diverisfy your portfolio, but I can see it being all to easy to go chasing a dream at the tender age of 18 and losing it all. Can you imagine how dissapointed the person who left you the money would be if you lost it all being a fool??
One of the things that I decided to do this year was to open an etrade account up and do some daytrading while I was at work. I started with 10K in early January, and was able to turn it into 17,500 by early March. It's not that hard to make a quick dollar in a 3X leveraged ETF when the market is soaring on a consistent basis. Needless to say I got more and more cocky and ended up losing 7K in a matter of 3 days. Luckily I learned from this costly experience, and have now really taken a step back and become more systematic about how and what I trade. After that exercise, I truly understand how 99% of all daytraders fail.
Please take everyones advice seriously and get yourself an education and a job. Daytrading is not a lifesytle that seems all that attractive in this type of market. If you are insistent on trading, open up an etrade account and play around with 10K. Granted that you have no practial investment experience, you have no business trading with 55K.
On a side note, go Zagg!!
I think you should take 5K and start daytrading in order to see what it is like to be a slave to the market on a daily basis. In order for you to feel the swings and the consequences of your actions, it is important for you to feel it in your wallet. I have met numerous people who traded with thier own money for years, and ended up losing it over a bad trade or two. Is this really the life you want to live?
I can relate to you in the sense that when my father passed away when I was 19, I recieved over 250K in life insurance money. Granted this is not 4 houses and 700K, but it is by no means chump change. Rather than me trying to turn the 250K into 1MM, I decided to give it to a trusted financial planner who made it so that I was able to pay for 4 years college at a public school, and still be able to have over 250K in my account after all of that. The thing you really need to realize is that a college education is the most important thing for you to get at this point in your life. It is imperative that you have a back-up plan in case something goes wrong and you lose all of your money. I know you said you are going to diverisfy your portfolio, but I can see it being all to easy to go chasing a dream at the tender age of 18 and losing it all. Can you imagine how dissapointed the person who left you the money would be if you lost it all being a fool??
One of the things that I decided to do this year was to open an etrade account up and do some daytrading while I was at work. I started with 10K in early January, and was able to turn it into 17,500 by early March. It's not that hard to make a quick dollar in a 3X leveraged ETF when the market is soaring on a consistent basis. Needless to say I got more and more cocky and ended up losing 7K in a matter of 3 days. Luckily I learned from this costly experience, and have now really taken a step back and become more systematic about how and what I trade. After that exercise, I truly understand how 99% of all daytraders fail.
Please take everyones advice seriously and get yourself an education and a job. Daytrading is not a lifesytle that seems all that attractive in this type of market. If you are insistent on trading, open up an etrade account and play around with 10K. Granted that you have no practial investment experience, you have no business trading with 55K.
On a side note, go Zagg!!
Very well said. This is an extremely interesting thread that I (as a relative NOOB) have learned a lot from. Thanks very much to all who have contributed.
I have fairly wealthy parents myself and was given a pretty big sum of money to buy a condo back in '05. Where I live (Calgary, AB), the prices nearly doubled a year later and the market was still red-hot until the late summer of '07. During that time, of course, I was a cocky, Donald Trump-wannabe that thought I was this incredible genius because I bought a property that went on to double in value in a year.
So, I bought another place, and another place, and then in August of '07, I couldn't sell one of them. Suddenly, I was inadvertently stuck with two properties, in a quickly-cooling market, and my equity was now split between these two properties, meaning that I had not only a higher mortgage payment commitment myself, but I had lower rental income due to the high loan:value ratio. It was not a fun time. Thankfully, I managed to get out of the situation about a year later, not without scathe, though.
My Dad gave me some good advice when I told him about the third (last) property's purchase..."son, you just don't need these kinds of stresses in your life right now" (I was 25)...good advice.
You're 18. Go to College. It'll be the best time in your life, you'll meet lifelong friends and hook-up with the hottest girls. Get good grades, go on insane spring break and summer trips. You already seem pretty wise in the theoretical aspects of trading/markets, a lot moreso than the typical 18 year-old, I'd guess. Kudos for that. Keep reading leisurely, keep following the markets and the economic landscape, and start small with very little risk. If I'm 18 and have fallen on a bunch of money, my goals are twofold: capital preservation, and females
Advise comes in all shapes and sizes. do the trust thing. call the realtor and give the addresses and let them manage them. out of site, out of mind. know your needs and fullfill them. take 20 bones and get in the game. lose it and you will still have $ to regroup. make it and start preserving your wealth. the RDPD is worth the time. take care of your health, both mental and pysical, and be 18!!
Real Estate is the best asset to invest in, we are entering an inflationary period where all assets tied to the dollar will increase exponentially. I would be leveraging those properties you have and slumlording. Income from rentals is way more than you will ever make from artificially high dividends. I must say that I am envious of your real estate positions. You will have steady, monthly income from rentals, you won't have to worry about scraping by on your trading account, it is stressful, trust me. Being free and clear on 700k worth of real estate is huge at your age, you could be worth several million while having others pay for it by the time you graduate. I don't know which campus you will be attending but if you are going to urbana/champaigne or springfield real estate investments there will be HUGE money makers. College towns are great with reliable, steady rental incomes (mommy and daddy pay the rent). I just bought my first house to diversify away from trading, selling real estate now would be a big mistake in my opinion. Good luck to you and party it up while your in school, those rental incomes will be real sweet when you turn 21 your junior year.....