Stockbrokers that accept 16 y/os // where to invest 200k? (1 Viewer)

[Graney]

I don't pretend to be a good trader, nor do I have the time / interest in looking into companies. I plan on index investing; why should I put my money into mutual funds when they don't beat index funds?

You are very smart. This is what I was going to suggest, I'm glad I don't have to explain t.i

3. If you are really trying to seek similar returns to the equities market, then just invest in an index linked fund/instrument.

yes

What's so unbelievable about hearing about Bitcoin in 2011, putting a few hundred bucks into it, and now having a nice sum? It's rare, but in no way extraordinarily. Quite boring actually.

I bought bitcoin in 2011 also. I put a few hundred bucks into bitcoin and the most it ever peaked at in aud valuation was $20000 :-(

I now have no bitcoin, I sold at a lot more than the current price because I no longer have faith in the value of it at the current price, and due to unresolved technical problems with the protocol. You must have had much more fortunate timing than me to turn a few hundred into over 10 times the amount I did.

* minimize my taxable income for the upcoming 2 years by minimizing the amount of bitcoins I sell, and instead protecting myself against drops in the price of bitcoin with options. However, the bitcoin options market is still in its infancy, and I'm unsure if there will be enough liquidity

Anyway, if I stay in the 19% bracket (by selling very few btc and hence not triggering cgt events):

I seriously wouldn't worry about being taxed if I were you, I would gladly take the tax hit and get a lot of $aud ASAP. I would worry a lot more about the value of bitcoin dropping to zero.

Holding onto your bitcoin to avoid tax would be a great strategy, if bitcoin had a stable value year to year. Bitcoin has dropped a lot in the past few months. By 2016 it could be worth 10% or less of the current price. You can't reliably maximise returns by minimising tax when the value is going to be so volatile. The fluctuation in bitcoin value year to year is likely to be much greater than the extra tax you would pay.

Of course it could go up again. But wealth is subject to diminishing returns. $400k is not twice as life changing to a 16 year old, as $200k. A bird in the hand is definitely worth more than 2 in the bush in this case.

Think of it this way - if you had $100k aud, would you be putting it in bitcoin right now? If not, you shouldn't have that money in bitcoin, the fact that it's an old investment, and you got that increase in capital gains without effort is irrelevant. You should evaluate your investment as though you were making it new today

What if you had to work for thousands of hours to get that $100k (which is going to next 5-10 years of your life). Would you feel differently about putting your own hard earned into bitcoin?

Would you put 50% of your paycheck for the next 5 years into bitcoin?

You need to take a substantial profit - you're planning on $200k, which is excellent. I don't know how much bitcoin you have remaining, but I'd make it a lot less than $100k value, unless you already have a few hundred thousand in equities or paid off investment property and can afford to burn money. Keep maybe 10% of your bitcoin for fun as a speculative investment, get value for the rest.

 

[seremify007]

I seriously wouldn't worry about being taxed if I were you, I would gladly take the tax hit and get a lot of $aud ASAP. I would worry a lot more about the value of bitcoin dropping to zero.

This.

Holding onto your bitcoin to avoid tax would be a great strategy, if bitcoin had a stable value year to year. Bitcoin has dropped a lot in the past few months. By 2016 it could be worth 10% or less of the current price. You can't reliably maximise returns by minimising tax when the value is going to be so volatile. The fluctuation in bitcoin value year to year is likely to be much greater than the extra tax you would pay.

I also assume Op has considered the draft (or maybe it's final now?) conceptual guidance on how the ATO views bitcoins as a capital asset (i.e. subject to CGT); and understands the principles behind taxation of CG.

Anyhow, what Graney said is probably the best advice in this thread. Realise your gains before they turn into losses. I personally wouldn't bother with trying to hedge potential losses on bitcoins as you're using unregulated derivatives to hedge unregulated currencies... the whole thing just sounds like a basket case. At your age, you'd rather be the kid who made $200k profit than the kid who had a paper gain of $200k at one point, didn't realise it, and now has nothing.

 

[seremify007]

For the benefit of anyone curious about this, here is the ATO guidance on how they treat bitcoins: https://www.ato.gov.au/General/Gen/...rrencies-in-Australia---specifically-bitcoin/

 

[xetamine]

.

 

[nerdasdasd]

I would also worry about the risks of bitcoins getting hack. The monetary loss of hacked bitcoins has been quite common ...

@op

 

[nerdasdasd]

@OP

http://www.theage.com.au/it-pro/sec...oin-bank-hacked-1m-stolen-20131108-hv2iv.html
http://www.theguardian.com/technology/2014/mar/18/history-of-bitcoin-hacks-alternative-currency

 

[hypermax]

Bitcoins are way to expensive right now. About bitcoins, my teacher told me that he had a friend who bought bitcoins, back in the days where no one really knew it. one night he orders pizza and pays it with bitcoin(i dont know how he did it tho.). Well when bitcoins blew up his bitcoin he bought with pizza was worth like 800000 dollars

 

[hypermax]

@OP

http://www.theage.com.au/it-pro/sec...oin-bank-hacked-1m-stolen-20131108-hv2iv.html
http://www.theguardian.com/technology/2014/mar/18/history-of-bitcoin-hacks-alternative-currency

I guess there is a flaw in every system, including bitcoins

 

[xetamine]

.

 

[turntaker]

Buy a house

 

[hypermax]

Buy a house

not in sydney

 

[hypermax]

Buy a house

not in sydney

 

[seremify007]

I'd hazard a guess that Sydney house prices will be less volatile than bitcoin at least in the short to medium term... bearing in mind that the average definition of medium term of anywhere between 5 and 10 years would make up a significant % of the op's current life to date.

 

[kalstar]

High interest savings account.

 

[turntaker]

Don't put money in bank. Money undergoes inflation. Buy gold since it doesn't lose value

 

[astroman]

Don't put money in bank. Money undergoes inflation. Buy gold since it doesn't lose value

not 100% true, it's supply and demand.

 

[turntaker]

not 100% true, it's supply and demand.

Gold is more stable than any world currency.

 

[astroman]

Gold is more stable than any world currency.

that is true.

 

[futurecompscistudent]

HI

 

[marlow415]

First and for most I'm a bit skeptical about bitcoins and investing in them, i certainly hope you're short term trading them. Secondly i recommend you start off swing trading microcap stocks on the NASDAQ as i've seen them move quite a lot in comparison to large caps, with that being said i would build a long term investment portfolio which is diversified, containing large cap blue chip stocks that can gain due to fundamentals. To my knowledge, you're unable to open up a brokerage account if you're under the age of 18 without a gardian so this would be the perfect time to really focus on learning technical and fundamental analysis over the course of the 2 years( if you've already learned it all, great work on strategy), then put 50k in an account (i recommend interactive brokers) and go from there. It's such a pity that you're unable to short sell stocks here in australia, so much profit is left on the table.