When Financial Freedom is more Important than Creative Writing!

Trading I consider is a creative process (until I get better at creative writing) and to believe the experts you can make some money from it.  So I tell myself buy the vegetables! i.e. Australian Shares, keep them for one year for tax advantages (you pay less tax if you traded them after one year instead of the 50% tax if it's less than that). So I imagine myself a trader. It happens to be shares, but it could've been anything from tomatoes, wheat to jewellery, cars, clothes or shoes. I never ever sold anything online other than shares. I just find it tedious to photograph products and wait for strangers to contact me. Never aspired to sold anything on eBay, Amazon or any online eCommerce and perhaps I never will be. Of course, I don't do garage sales!

Its scary for me to have small business, so I never entertained the idea. I started warming to the idea of blogging and making a bit of pocket money, as a hobby and not as a major hustle. For it to be a major hustle, the scale and reach and investment of time and effort has to be regular and of very high quality. Not that I'm saying I don't aim for high quality, I do, however, this blog is to feel free to experiment in creative writing. So, its not a money making machine, but hopefully it'll  provide the framework for creativity, inspiration and something to write about. An idea, it is best to be entertained, and the best way to entertain it, is to write it. It's captured, recorded. You feel good.

Through shares (at small scale amounts $1000 to $2000 a pop, I'm learning on how a trader thinks. How some retail companies thrive on selling many products with small margin of profits, yet they make profit by selling high volumes of these products.  As an example The Reject Shop, last year, the share price was less than 4 dollars and now it is more than 6 dollars. They also gained more profit than last year. So next time, when their share price dip, I might buy shares in this company. The secret to successful shares portfolio, is year after year to add to it and grow it year after year. And be smart to buy low and sell high, as soon as you can (after one year to recover your initial cost before the company share price goes down below your purchase price. And sprinkle your portfolio with both types of companies high growth companies and/or dividend paying companies. And learn from your shares trading mistakes and keep observing your various watch lists to see if its good time to buy shares in certain company.

Don't waste your time live trading, set your price the night before or early in the morning, and I usually have it for fourteen days or longer depending on the online broker calendar (you can always amend the price anyway, anytime during this period). The reason for this is you don't won't to lose your spot in the queue, especially if some bigger trade like $50000 beats you to the queue to your preferred buying or selling price. With Telstra it could take you weeks and months to buy their shares, as the volumes are always high, so patience and strategy is important. I don't like to buy at market price, too risky, where you tick the box and usually you trade that way for one day only. What if someone set the price too high. Its better to set your own purchase price and have a rough idea the price you'd like to sell it later (by reviewing some online charts via google or your own online broker charts one month, yearly, five years etc. by typing in google for e.g. TLS asx or TRS asx you'll get the chart) and sell it at the average price of its peak or let it run if you already got your first initial cost of investment e.g. selling half of the shares if it will provide you with your original capital, and let the rest of shares run, or sell all of them. Each individual  has different  risk tolerance and profit goals . The important thing it has to be quite good company or business. Also  you want to know in advance the purchase price of a share and its current dividend to calculate your dividend yield, if you are after a certain dividend yield e.g. 6%, 7% or 8%. You need to do this simple math: e.g. Let assume that you want to buy Telstra at $2.80 per share and the current dividend is 0.11 cents. Telstra usually pays dividend twice a year, therefore, you calculate 0.11X2=0.22\2.80= 0.079X100=7.9% Dividend Yield.

So if you are planning to pay the Unit Strata via dividends or you'd like to pay a particular bill that's due every quarter then dividends from companies are good strategy for that. If you bought Telstra $2000 divided by $2.80= 714 Shares. To calculate your dividend $ that you'll get from Telstra:
714X0.11=$78.54 for March and the same amount in September, if they kept the same dividend value at 0.11 so the total will be 78.54+78.54=$157.8. Though, the advice is, it is  better to reinvest your dividend by buying more shares for that compound effect. I no longer do automatic dividend reinvestment plan, I learned my lesson after the year 2000. The companies I invested in, with dividends reinvestment plans no longer exist! So, you'll choose where you'll invest your dividends, get the money, park it for a while until you have the required amount and when good buying opportunity comes your way, calculate what you'll get out of it and hope for the best. Try to make an educated guess for your profits, like a savvy whole sale or grocery trader.

So as a trader I have to have crop i.e. shares to sell next year. Some shares perhaps I never sell if they are slow growth but with good dividends. The lower Telstra shares goes, at different intervals, I add more shares. Silly me, last year I bought it at $4 then later at $3.60 thinking I was getting it at a bargain price, then at $2.90, and now its lower. I managed to average Telstra purchase price down to less than $3.50. Traditionally Utility industry is slow growth industry. But Telstra is a  bluechip company and it is dominant in its field and pays dividends. As always diversify your shares in different industries and read news articles about the companies you are investing in, to find the challenges facing such company in its industry.

So I feel more like investing and saving than creative writing. Its no excuse, but this is my life current detour. And I'm allowed to have more than one interest anyway (currently reading personal finance blogs or books and applying some of their tips). Creative writing is bubbling quietly at the back burner, unseen but unforgotten.

Photo credit: my original photo