My financial goal, an assesment and some questions..

[toast2success]

Sorry , yip I've got lots of questions again but am trying to limit them and am digging up as many answers as I can find for myself.

So I read a section of a Hawes and Baker book, where they mention aiming for $1mil in 10 years is an ideal goal. Well I gave it some thought and decided to I'l like to to give this a shot, but I'd be looking to extend the 10yrs out, maybe to 15...I've just started studying and feel it may consume some of the $$ I'd need to try and reach $1mil in years.

My current situation.....age is in the late 30's .I have credit card debt on approx 5 cards. I am a renter and have no savings, no assets, and aim to have my debt (other than my student loan) paid off by the end of next year. To do this I was thinking of stopping my kiwisaver contributions for the next 12 months and using the usual contribution to go toward my debt (credit card interest is higher than kiwisaver gains for sure)..any thoughts,opinions on this strategy ? any gaping holes in the idea ?

and finally....

I know I should be nailing my debt but someone has offered me a very small amount ($1k) in lieu of some work if I want to get into the sharemarket. I know it's only a speck and not much to invest but a part of me is really tempted to get in....but again I know the debt thing still lingers

Back to the $1mil in 10-15yrs , realistic ?

[BIRMANBOY]

I'm biting my tongue!~~.. So great that you have a goal. First step is formulate a plan (make it acheivable) and then implement this by working your way through the various steps. Most goal setting works better if you set short, mid and long term goals. So for example your short term goal might be to cut up your credit cards, mid term pay off all your debt (which will be costing you more in interest than you will probably gain in the share market.) These goals are acheivable and once you have achieved success in reaching goals its easier to plan through the following and more difficult task of making your million. I suppose its possible to make a million in 10 years but unfortunately you need money to make money and even if you were making 150,000 a year after tax it would be difficult to even save a million in 10 years. I suppose if you got incredibly lucky (like lotto lucky) you could turn your 1000 into a series of multi baggers and do it but I fear the odds are so tiny that it would be like going to the casino and expecting to come out ahead time after time after time etc. Think Big but bite off small achievable chunks and you might get there.

Sorry , yip I've got lots of questions again but am trying to limit them and am digging up as many answers as I can find for myself.

So I read a section of a Hawes and Baker book, where they mention aiming for $1mil in 10 years is an ideal goal. Well I gave it some thought and decided to I'l like to to give this a shot, but I'd be looking to extend the 10yrs out, maybe to 15...I've just started studying and feel it may consume some of the $$ I'd need to try and reach $1mil in years.

My current situation.....age is in the late 30's .I have credit card debt on approx 5 cards. I am a renter and have no savings, no assets, and aim to have my debt (other than my student loan) paid off by the end of next year. To do this I was thinking of stopping my kiwisaver contributions for the next 12 months and using the usual contribution to go toward my debt (credit card interest is higher than kiwisaver gains for sure)..any thoughts,opinions on this strategy ? any gaping holes in the idea ?

and finally....

I know I should be nailing my debt but someone has offered me a very small amount ($1k) in lieu of some work if I want to get into the sharemarket. I know it's only a speck and not much to invest but a part of me is really tempted to get in....but again I know the debt thing still lingers

Back to the $1mil in 10-15yrs , realistic ?

[CJ]

Agree with the above,

Cut up Credit cards
Pay off Credit card debt (stopping kiwisaver sounds sensible but think about paying a one of lump sum of ~$1k next June to get the govt contribution.)
Save some cash. $1k is not enough to invest in the sharemarket. It costs $30 to get in and $30 to get out so you are down 6% before you start! In another recent post by a newbie, I recommend 4 shares with a minimum $5k investment in each, ideally $10k. Resaon - to diversify and to minimise transaction costs. Find that post as there are some useful comments from others re starting out investing.
Re saving - ask yourself why you have no savings at the moment. You need to address this problem, whether it be income or expenses, before you even think of making $1m. Its all relative- If you live like Kim DotCom, how much money do you think you would need to earn a year to save $1m in 10 years - My guess you would need to earn at least $1m. So your out your income and your expenses, see how you can increase income and/or decrease expenses.

[OldRider]

Toast.
Blunt answer NO! When was your book published. Have things changed since then ?
As has been suggested probably round $20,000 is minimum investment amount for
individual companies. Less if you invest in LIC's.

[percy]

I think you would be best to spend the $1000 at your local gym.
As you can't live within your means ,you will never be able to retire,so you will have to make sure you are fit,so you can keep working until death.

[JBmurc]

Sorry , yip I've got lots of questions again but am trying to limit them and am digging up as many answers as I can find for myself.

So I read a section of a Hawes and Baker book, where they mention aiming for $1mil in 10 years is an ideal goal. Well I gave it some thought and decided to I'l like to to give this a shot, but I'd be looking to extend the 10yrs out, maybe to 15...I've just started studying and feel it may consume some of the $$ I'd need to try and reach $1mil in years.

My current situation.....age is in the late 30's .I have credit card debt on approx 5 cards. I am a renter and have no savings, no assets, and aim to have my debt (other than my student loan) paid off by the end of next year. To do this I was thinking of stopping my kiwisaver contributions for the next 12 months and using the usual contribution to go toward my debt (credit card interest is higher than kiwisaver gains for sure)..any thoughts,opinions on this strategy ? any gaping holes in the idea ?

and finally....

I know I should be nailing my debt but someone has offered me a very small amount ($1k) in lieu of some work if I want to get into the sharemarket. I know it's only a speck and not much to invest but a part of me is really tempted to get in....but again I know the debt thing still lingers

Back to the $1mil in 10-15yrs , realistic ?

no not realistic at all mate..

like many have said pay the credit debts off then if you really want to get to 1mill from 1k within 10yrs your going have to take some risks i.e CFD's leverage or if you really lucky i.e couple 10 bagger+ etc you would have a chance i.e 1k turns to 10k turns to 100k
but your'd be doing really good to get many 10 baggers without a few losses as you will be investing in the micro-jnr high risk/return sectors

I've been at it for near 10yrs and only had one 10 bagger ( sold out of a few doz too early) and I mostly invest in the micro-jnr sectors good years 100% p.a return in the good years ..... bad years 20-30% down......If I could get 1000% average over 10yrs I'd be stoked.

[Lizard]

Simple... all you need is to find one trade you can double your money in each year and you can turn that $1k into a $1m in 10 years....

(Disclosure: This is not advice. It never worked for me either.)

[Halebop]

$1 million in 10 years is challenging. You need to understand the underlying math and logic.

If you are a world class investor perhaps you could earn 30% per annum after tax from a relatively small pool of capital (Consider you are Buffet or Lynch and concede you would struggle to earn these returns from a large pool of capital).

If you are able to save $22,000 per annum and inflate your savings by 3% per annum and only start earning your 30% after the money has been saved for a year (see image) then you'd hit your goal.

1mil10years.jpg

Consider that very few kiwis can save $22,000 per annum and fewer still would earn 30% returns after tax on a sustainable or long term average basis.

To achieve these sorts of returns you will need to take intelligent calculated risks (or lucky picks), incur infrequent losses and if in property you will need to maintain high levels of leverage and superior operating skills. A bull market wouldn't hurt either.

Because we are all saying it is too hard stick to it and prove us wrong! Goals likes this work a treat when combined with superior planning and execution and lots of hard work ...after all, if you only get to $600k, will you feel cheated?

P.S. I've both saved more than $22k per annum and earned more than 30% per annum in the last 10 years. ...partly because I was aiming for 50% to 100% returns and failed!

[JBmurc]

was just doing my rough number on my last 6 yrs of serious share trading my average to March 30th 2012 was 23% p.a pretty good really(even when I take of my running costs 5% p.a loaned funds,accounts) ....should have taken a holiday and sold up as of present because of some massive hit's i.e VIL-SSN I'm down round 40% so far this fin year
confident I can turn this round before March 2013....

overall anyone that can average 100% p.a is a complete bloody legend IMHO esp if where talking 100k+ invested
has been my goal going need some 10 baggers to get me back on track

If I bring all my investment from the last 10yrs i.e include property I'm sure it will be well over 30%p.a but unlikely to be more than 40%p.a average..

[toast2success]

Wow awesome, thanks for all the responses so far, this has been an enlightening read.

I sliced the credit cards some time ago so they have gone, just not the debt. I'm definitely living more within my means these days and will be glad to see the debt go...

So I have gone back to the book I was reading last night and thought I'd post the info from it here .

Get rich stay rich by Martin Hawes and Joan Baker

pg 42
"...throughout the book as benchmarks to remind you of what you are aiming at:

$1 million (the amount you will need)
15 per cent (the performance you will need); and
10 years (the time you will take)

It goes on to say your net worth has to be at least $1 million in order to be finically free. It makes mention this is possible provided you don't have too much wealth tied up in your home and live a modest lifestyle.

So I guess wealth creating assists are strong on this equation ??