Money Whiz tm
Smashwords Edition 5
Copyright 2002 – 2010 Tabain, Geoff A
Money Whiz™ is a publication on the different ways of accumulating financial success. It explains in an easy to understand format the various ways and methods of investing in shares. Shares can be the best investment for gaining wealth and Money Whiz™ covers how to make money in both the short or long term. It is designed for the professional or first time investor and helps you determine which method(s) of investment would best suit you. It also shows you how to use diversification to keep money safe as well as growing. It shows you how it is possible to earn a good living through shares, the advantages and traps of negative gearing shares and property and how to maximise benefits and investments when retired. The publication also covers property, superannuation, managed funds, running a business and budgeting. Very few become wealthy by relying solely on advisers and/or brokers. You must learn how to acquire the knowledge and confidence to make your own investment decisions.
A few of the topics covered by this publication are as follows:
-
Comparing the share market
- Percentage of profit to time
-
Selling or buy orders
- Performance example
- Discounts
-
Auto-stock loss
- Blue chip shares
- Chess system
-
Diversification
- Quick profits
- Spare cash
- Dividends
-
Dividend reinvest
- Formulas
- Market capitalisation
- P/E
ratio
-
NTA
- Bull and bear
- Compounding interest
- Paying out
loans
- Five reasons for investing in shares
- Researching
-
Ten tips
- Mining companies
- Don’t speculate
- Time in
the market
- Public floats
- Methods for selecting shares
-
Negative gearing shares
- Managed funds
- Time and risk
-
Investing in property
-
Negatively gearing property
- Positive gearing
- Neutral
gearing
- Property loans
- Mortgage offset account
- Home
you live in
- Budgeting
- Superannuation
- Annuities or
pensions
- Turnover income and profit
- Tax rate
- Reducing
tax
- GST tax
- Wills
- Power of attorney
- Share Whiz™
Money Master tm
1. Comparing the share market with other types of investments
The share market has always out performed all other investments over a longer period of time and has often had good short term results as well. It can also provide a regular income from interest paid (dividends) as well as investment growth. Most other investments only offer one or the other.
Shares are otherwise known as Equities or Stocks.
2. Brokers and fees
Discount brokers and full service brokers
To buy and sell shares you need to open an account with a brokerage firm. There are two types of brokerage firms. One is a discount broker. They buy and sell shares on your behalf without giving advice. The other type of brokerage firm charges more, but they will give advice in return. There is usually no fee involved to open up an account with a brokerage firm. You can also arrange to have money automatically transferred to and from one of your bank accounts to your broker when buying and selling shares.
Brokerage fees in respect to the size of purchase.
Fees charged by brokers to buy and sell shares can vary. For example a fee charged by a discount broker maybe the greater of the two options - $50 or 1% of the amount purchased per company plus around 0.15% tax.
Because of these fees, when you buy shares it would be better to purchase amounts close to $5000 as 1% of $5000 is $50. If only $1000 worth was purchased you would be required to pay the $50 fee which is then 5% of the $1000. If the shares in the company purchased rose 13% in a year and were bought and sold in that year, the $1000 parcel of shares would have cost 10% to buy and sell leaving a profit of just 3%. The $5000 parcel of shares however would have cost 2% to buy and sell leaving a healthier profit of 11%. Over a few years the differences are not as great. For example in four years the 13% gain would become 52%, less the 2% in fees for the $5000 purchase, leaving 50% compared to the 10% less in fees for the $1000 purchase which leaves 42%.