how to raise capital for student investors?

[petechewy]

Hi all, I've been lurking around the forum absorbing great knowledge from people.

I'm a student at Auckland University studying Architecture. But since 6th form (2006) I've been learning about sharemarket and have been investing since 2007 starting with only $1500.

I've learnt a lot of hard lessons over the past few years and made some good profit every now and then and my portfolio is now around $40000 (with $20000 of loan). However, One of my mistakes was in FPA when it was hanging at around $0.80. Including several other long term investments, I have around 65% of my portfolio locked up or I will suffer an 25% loss on the value my total portfolio.

I'm 21 years old, so I have a high risk tolerence. I can/ have seen my portfolio drop 50% without lossing my nerves. Although I have not followed finance related careers, I have educated myself extensively on sharemarket and everything relating to it. I am very much a foundamental trader, but use technical to make entry/ exit choices. I have tried and used all kinds of techniques over the years, and developed and refined my own strategy.

Apart from study, I have a permanent part-time job 20 hours per week. I can pretty much use that to support myself and use interest free loans for investment (student loan and bank overdrafts). As I can only utilise around $10,000 at the moment, I can't help but wondering how can I increase my investment capital?

My first dilemma is should I take a 25% decrease in my portfolio value in order to have more liquidity? It will mean all the profit I've made in the past few years will be broke even.

secondly, how can I raise more capital? My parents can not support me (in fact I'm supporting my own living and studying myself let alone investing). I'm not in the business school and as many know, people my age are not exactly interested in investing. It's pretty hard to bounce ideas from people. I can't get margin lending because I don't earn enough. I definately can't get/ afford personal loans.

I'm a bit of an idealist, I want to have enough passive income so that I can get by when I finish with university (when I'm 26). I sat this goal for myself since I was 18. am not a person who needs millions and millions to satisfy, but want to have enough freedom to pursue what I love without financial worries.

I live in Auckland, would be keen to get to know some of the pros and how you did it. Thanks heaps on reading my ramble!

[buns]

Mate have a look around the site for some thoughts on this. A lot of people have asked similar questions already.

In summary – I think if you have no cash flow you should spend this time building up knowledge in markets and a wealth generating strategy. Boring I know… Once you graduate and work, start investing this capital with your given strategy.

With no cash flows, lending is super dangerous. Invest what you have now and get a small snowball (some compounding) building, and then be patient if you don’t have much spare capital – don’t force it.

And remember you are 21 – Free capital should be pumped into Double Brown Yardy’s, powerades on Sunday, junk food, events, travel or whatever else floats your boat. Investing is pretty boring compared to the life of a 21yr old.

[buns]

Oh and on the interest free loan thing - I'm assuming you are talking about the $2k every bank gives a grad?

Mate jump on those ASAP, and get as many as you can before they expire. I got it from 4 banks ($8k), that was all I started with.

I don't know if I should be widly advertising it, or if it is morally correct but 3/4 of those banks have no system in place around expiry and I still have these loans.. $6k, no interest.

I have always intended on paying these back once 1 or 2 shares hit some milestones, but they just havent come about (ACL FDA approval etc)

For you (I just re read you have 50% debt!!!), I think you should take these loans and pay down any interest bearing loans ASAP

[CJ]

I have around 65% of my portfolio locked up or I will suffer an 25% loss on the value my total portfolio.

Not sure I understand this. Always value your portfolio at market value (not cost) and determine if each investment is the best use of money.

If a stock is down 25%, dont wait for it to go back up. think is that the best use of the money or would I be better selling now and investing in something else.

[shasta]

Not sure I understand this. Always value your portfolio at market value (not cost) and determine if each investment is the best use of money.

If a stock is down 25%, dont wait for it to go back up. think is that the best use of the money or would I be better selling now and investing in something else.

Yeah, re FPA - the loss is a loss - accept it.

Would you buy into FPA today, based on what you think there future is?

If no, sell take the loss on the chin & smile - you have just had you're first lesson in the market & you got off relatively cheaply.

You have plenty of time to recoup those losses, find something with a better outlook & learn from that mistake.

I'm 34, so i agree with Buns - live the student life & grab whatever the Govt will give you, i had to pay for my student loan (@ 7% interest), but the generation before got it free, take it, use it, abuse it.

When you make a couple of grand on some shares, jump on a plane & go shopping in sydney/melbourne etc, enjoy it - i used to buy some decent wine to drink/cellar when i made some good coin

On kiwisaver, make sure you chuck in 2% so you get the 2% from your employer, the Govt tops it up by just over $2k in the first year

[ENP]

Mate jump on those ASAP, and get as many as you can before they expire. I got it from 4 banks ($8k), that was all I started with.

That's pure genius!!

Why didn't I think of that?

[petechewy]

cheers guys for all your inputs. Maybe I am getting a little out of perspective.

Mate jump on those ASAP, and get as many as you can before they expire. I got it from 4 banks ($8k), that was all I started with.

yeap, that's pretty much how i started too. I have quite a bit loan, but they are all interest free, so i'm not too worried.
cheers shasta for your advices, went to Spain last year for a good month and half was bloody fantastic!! Truth is, I do enjoy life, just don't want to come out of the student life and straight into debt and 9-5 corporate graveyard ae.

anyone know of places where i can meet gurus etc? ie i'd love to chat with you guys if possible.

[shasta]

cheers guys for all your inputs. Maybe I am getting a little out of perspective.

yeap, that's pretty much how i started too. I have quite a bit loan, but they are all interest free, so i'm not too worried.
cheers shasta for your advices, went to Spain last year for a good month and half was bloody fantastic!! Truth is, I do enjoy life, just don't want to come out of the student life and straight into debt and 9-5 corporate graveyard ae.

anyone know of places where i can meet gurus etc? ie i'd love to chat with you guys if possible.

Where are you?

Sharetrader has casual catch up meetings around the traps ever now & then, i used to organise the Wellington ones over a few drinks etc

Always been great to put a face to the names & ive meet some wonderful & knowledgable posters thru these meetings.

[STRAT]

anyone know of places where i can meet gurus etc? ie i'd love to chat with you guys if possible.

Hi Peter.
Have a look here for meeting people with the same interests.

http://www.sharetrader.co.nz/showthr...uckland/page36

I should probably point out you get to be a Guru here by posting a lot. Quality of content is not measured.

[petechewy]

cheers shasta and STRAT. I live in Auckland City Centre but occassionally travel to Wellington. will be awesome to go to one of those meetings. are they regular or just depends on opportunity?