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Yes you can. There' re two modes of learning: #1. Learn from others about what to do and #2 Learn from others about what not to do. Most learn from what to do. I learn from both. For example, I gave up eating meat which 95% of people do because I saw the suffering it causes. It's also an application of walking the path of least traveled. It's a sure way to have a result(good or bad) different than most people. As a result, I will suffer less in my old age and causing less suffering to animals and environment. If there's nothing to learn from: there's still one thing: Don't be ignorant. :) Yes, I think "Rich dad poor dad" still provides value, at least for me for the rest of my life. I don't agree with everything Robert does and teaches or like him as a person, just as i don't agree with everything Buffettt says or does. e.g. I own 20% profitable tech stocks and he doesn't like tech stocks. I don't eat meat and he eats meat. I also don't support abortion which he supports. Just because Buffett is admired by many people doesn't mean he's right in everything. It's irrational and emotional to think everything a person teaches is bad just because he/she's done something wrong. The good thing about studying engineering is that we use logical thinking rather than emotional thinking. Many people here express dislike for Robert as a person so they dislike everything he says. "Rich dad poor dad" taught me the basic of balance sheet, cash flow and the way to get rich is by owning more real asset and less liability. That's the universal method for getting rich explained simply. That provides me solid foundation for my investing process in the stock market. His definition of assets and liabilities are not defined in conventional way but I agree with him on his definitions for getting rich. A house costing you money or a car costing your money every month are not true assets but are liabilities. Consequently,I didn't buy a car until it's absolutely necessary because my dad's health was deteriorating and I need a car to take him to hospital frequently. That's 5 years after graduation. My dad asked me to get a car right after graduation and promised to help me to buy it. I refused. when i bought the car, I had no car loan. I used LOC and paid it off within 1 year. I also bought the smallest house possible and close to my work so I save gas and time and I have the ability to pay off the mortgage less than 10 years. I was thinking about buying a X1 Carbon the other day but changed my mind thinking: "Hey that's a doodad. It's better to buy more asset and not being a slave to money." If "Rich dad, poor dad" was the first place I learned about basic financial literacy, I don't feel shameful. This idea of balance sheet, cash flow , assets and liability, has been hardwired into my brain and I am very selective about stocks I buy based on their balance sheet strength. Another powerful idea I learned from Robert Kiyosaki is: It's better to be street smart than school smart. School smart means knowledgeable about ideas that work in theory but doesn't work in the real world. Street smart means knowledgeable about ideas that work in real world but sounds scary to the school smart. School smart learned the the market is efficient and unbeatable so they surrender to the idea of indexing getting market average or below average return. This is what most people do. Street smart thinks market is efficient in the long term but inefficient in the short term. Even it's 100% efficient at all time, it's still possible to beat the market by holding a basket of highest quality stocks. Because the whole market contains both bad and good businesses. By picking out the gold from a pile of sands, the result is above average. If ask me to choose a living person as a role model for worldly wisdom or about investing, I will say that's Charlie Munger. I am very positive my investment can exceed my job income within 10 more years. I can retire from a job from then on but I probably will continue investing till a very old age. It doesn't take a lot of effort to allocate capital. I am also into spiritual and charitable stuff. My 30%+ down year ? The worst was 2008: -20% and I bought XRE, VNQ all the way to the bottom... I won't let emotions get into the way. lol.. Good one. If a blackbox contains a complicated and unique algorithm, it's hard to to conclude what's inside the blackbox by observing its outputs. Only the designer truthly know what's inside. Here're couple points: #1. My margin account is only a portion of my liquid networth. #2. The longer I invest, the more cushion I have against severe bear market because the difference in return I made compared to the market average especially to the TSX index average accumulates every year. #3. Again, my margin call risk is the market dropping of 50% or more in a short period of time without considerations of dividend and option premiums and additional funding. #4. My income can replenish the margin account very quickly. My margin account is not small but a decent size. With all variables considered, my margin account can withstand drop of almost 90%. If there's no margin call, I don't worry about how much the market drops. In fact, if the market drops 30%+, I'll happy to buy more! My stocks positions are top 1% in terms of quality, potential for future growth. I am happy to buy more at a cheaper price! As my portfolio grows bigger, I'll reduce my leverage ratio because my job income to portfolio net value ratio will shrink in the future. So my ability to add more fund to reduce leverage risk will diminish. As a result, I'll adjust. I estimate the tipping point for change will be at $300k net liquid asset.(5 more years to reach). Right now I am at 100k net liquid asset. Adapt always adapt, that is the key to survive for long term. There's risk driving a car but without driving a car we don't get far. Lastly, Here's a good article for the young and brave: http://content.time.com/time/business/article/0,8599,1982327,00.html The most important thing about using leverage is don't allow it to force you to sell your investment at the most unfavorable valuation. That's the key to use leverage successfully. And some simple math about leverage: -10 X 100 = -1000, 0 x 100 = 0, +10 x 100 = +1000. So don't use leverage blindly. Only use it on something that goes up in value.

There's no hope for the most brilliant active fund managers if the job is at stake and their actions are controlled by the emotions of their customers.

You know, the private equity industry is all obsessed about annualized returns - they call it IRR. However in the industry there's a saying - "You can't eat IRR!". That means that your annualized returns on a small short term investment doesn't mean much. You're richer when you make a lower "annualized rate" consistently over a long period. BRK shareholders aren't so rich because WB made 40% in one year or 6.6% on one trade. They are so rich because he made 20% compound continuously over 50 years. Also I think you got the concept of margin of safety wrong. I recommend "The Intelligent Investor" (see chapter 20) instead of "Rich Dad Poor Dad". I am not relying on a single stock. I can in no way to say I can get x % per month consistently for each value trade. They vary. I trade as the opportunities show up. Interestingly, most of time they meet my target return of 3% to 10% per month. It's amazing how much a stock can move in just a couple months when they have strong balance sheet and durable product/services. If the value stock has potential to go up 60% per year, I am willing to make only 30% and have a higher probability of reaching that target. The annualized return is important because I need to compare it to my interest cost. That's opportunity cost. Remember, my value trades are just bonus. If there are no opportunities show up, The margin will just sit there dormant costing me nothing and earning me nothing. Meanwhile my buy and hold positions generates ~15% per year return over the long term. The results from the past 8 years tell me that my current strategy is working for me. Compounding is truly wonderful. My gain from 2015, that's almost 2 months of gain equals my total gain from the first 3 years of investing. I don't know why so many people hate the book rich dad poor dad. It's my early inspiration to investing in early stage. Maybe his attitude is bad but I believe we can learn something useful from everybody. I've read "The Intelligent Investor". I've also read ideas from many great investors: Charlie Munger, John Templeton, Peter Lynch, John Maynard Keynes. I know what margin of safety is: a low price/value ratio. what I said is another version of margin of safety I came up with:In newly established positions, the amount of drop the share can withstand that I can still break even. Benjamin Graham is too academic. His selection method is too stubborn in someway. The biggest idea I learned from Benjamin Graham is to face the market as Mr.Market. This idea is the most useful. Investing is not an exact science. I think price/value is relative. It's dynamic.

Hi oddballstocks, I won't put 100% in one stock. I avoid two side of extremes. I have 30 stocks but I am willing to increase the positions size because of lower valuation. I gave up searching a job related to my degree but I did not give up hope. I won't feel I am entitled to a high paying job because I have x,y,z degree. You know what people do when they give up hope? They blame the 1%. I don't blame the 1%. I do have a job as a purchaser earning just 30k. Also I am working 10 minutes drive from my house so no incentive to find another job which I will stuck in traffic for 1 hour. I also do not want to get back into hightech world. I've improved a lot since 2007. I made mistakes and learned from them. Now my target annual return is 15% to 20%. Thanks for your kind words.

OK. Fair enough. Then I am way less conservative than Buffett and many on this forum. It's quite lonely. ;D This quote from Soros explains why I am doing the leveraged value trades: "It's not whether you're right or wrong that's important, but how much money you make when you're right and how much you lose when you're wrong." Really? Surprised? It is a discussion board frequented by people that admire two conservative insurance companies, named as the intersection of said insurance companies. To very loosely paraphrase Warren Buffet you went to a ballet looking for a rock concert and then you're surprised by then you're surprised by the content of the show. See I can be blunt too ;). WB is using leverage from insurance company premium, AKA OPM. WB said he can obtain 50% return if he has millions vs billions to manage. I think it's quite possible for his current skills. I think the way to do it is find deep value stocks. This will result in high turnover rate for sure. I think he will also concentrate the fund in a small number of positions. I think my turn over rate is close to 100% because of margin trading. The rest of my margin account are long term buy and hold. They were carefully picked so the quality is exceptional. What can we talk about them? Nothing. They are so simple and stable. There's nothing to talk about. What can we talk about CNR? or SJ? or RCH? ::) There's another way to look at high turnover and tax consequence: It's better to earn more money and pay more tax then earn less money and pay less tax! My target return for value trades is 5x to 10x my interest cost. So even I pay tax on those trades. I am still ahead than without them. Example trade: TSE:STN, 100 shares, bought Dec, 2014, sold Feb, 2015 for 6.6% gain. Annualized : 40%/y. Interest cost: 4%/y. I am still holding 50 shares in my non leveraged account. In just two months, I created a 13% margin of safety for my 50 shares positions. Incorrect. During partnership days, Buffett only used leverage in dealing in special situations. What our OP is doing is down right reckless. I don't exactly know WB's turnover back then... but if he used higher turnover when younger and then used less. Maybe you should assume that as he learned more about things he improved his method. Furthermore, taxes are a higher problem when you trade often. Not just the income vs. capital issue, but also compounding effects. If I trade often and I harvest my gains, then I need to pay taxes on my gains today as opposed to the future. Therefore I have less capital available to compound today which results in significantly less assets in the future. If you model it you'll be surprised by the long term effects. Also since you brought WB into this, he tries like crazy to push recognizing gains as far into the future as possible. See recent P&G and Graham Holdings transactions. rb

1) If you are dealing with small sums of money why not trade within a TFSA or RRSP if you have contribution room? If you are using a LOC in a margin account to increase your leverage, you must like paying with fire. I mean a 3x ETF would be less leveraged. -Right now I am concentrate on growing my networth as fast as posible. I have 10% of my asset in TFSA. The main reason is that I can't borrow against my stocks in TFSA and RRSP. Leveraged ETF is a losing game in the long term for buy and hold investor. They depreciates. 2) If you are paying interest to invest, write it off. Then again if you want to pay more tax on my behalf go right ahead. -If I claim the interst cost, it'll give impression I am running a business which I am not at that level yet. Writing off the interest will save me maybe $100 to $200 / year which I am willing to give up. 3) Being an engineer doesn't make you a god. You are young and have a lot to learn. A BS in any type of engineering does not make you an engineer nor can you claim you are an engineer by law in Canada. I didn't say you are making this claim but it could have been implied. -I did not say I am a Professional Engineer. I said I got a degree in Engineering and not one give a single interview. My point was if people don't approciate my skills, I don't feel bad. I make my own luck. 4) I agree with Scott that this thread is quite scary. The markets have been going in one direction since you have been investing. Wait till the market turns and you'll learn what your really made of. - It's normal for most people to feel scary for something we don't understand. In my curent setup, the whole market can drop 90% and I am still fine meaning no margin call because of backing funding.(Application of redundancy). and my portfolio will drop less than the whole market because of the quality of stocks I own. As long as it dosn't drop 90% in one day I am fine. It's imposisble because of circuit breakers. The market is at all time high but I found many quality stocks at 52 weeks low. If I am ahead of the market by 5 to 10% per year, I don't worry about how high the market is. I am in for the long run. 5) Leverage is great when the market is going the right direction. See point 4. -See my reply about point 4. 6) Reading rich dad poor dad is not an investment education. -yes it is. I learned about balancesheet, cashflow and his idea of true asset and true liabiliyty. e.g. a car is a liabiliy not an asset. But I don't agree everythign Robert says and does. I don't agree with network marketing/MLM. 7) Why not post all your trades for everyone to see? Start a blog. The transparency will be good for your ego. and -Why attract competitions? If I am in for the ego, I would use my real name on the forum . It's a good thing most people don't agree with what I am doing. The road less travelled is most rewarding. 8) (I'm serious here) What was your investment rationale for buying COS? -Buy low sell high.

;D I am a bit surprise to find this kind of reply on Corner of berkshire and fairfax. The most important quality to have in life is: open mindedness.Close mindedness only limit personal growth. I believe anything is possible until proven otherwise. It would be tiring to answer each points. Why is that? 1. Rich Dad, Poor Dad 2. "Not concerned about money," but wants freedom 3. Is willing to use 30% leverage to get it 4. While the markets are at all time highs 5. Is concerned he can't live off these capital gains 6. Does 20 trades a month 7. A lot of which apparently have a holding period of less than a year, some just "a month" 8. Wants this to replace his job income Conclusion, ~80% certainty: Gambler. I wish him the best. We've had some successful gamblers here in the past. I just hope he really knows what he's doing and I'm way off the mark here...

I apologize for the unintended insult. That's the side effect of being too straight forward. And thank you for taking the time to answer my two questions. As for leveraging, not all forms of leveraging are good. For example, I don't buy plain call or put. I also don't buy 200%, 300% ETF.. I like to use super low cost margin loan as operating leverage for short to medium term value stocks. And it helps to have back up funding I can access any time such as cash and LOC. I also have non leveraged accounts so not all eggs are in one basket. Maybe I should really forget about INC. It's less hassle and more peace of mind. If it comes up in the future, I'll deal with it then. Even with current setup, as an individual earning 30k, I will still do really well after another 10 to 15 years. Last year, scotiabank almost doubled my unsecured LOC limit without me asking from $7000 to $12000 because I've been a good customer. i would think they will give more if I ask. :) I will avoid short term trading as much as possible. Rarely, when stock moved substantially in short period of time, I take action. For example, I bought COS and sold at 30% gain within 2 weeks last month . This is rare. Most of my stock positions are longer than 30 days.

I see there are 3 major risks with Cryptocurrencies: #1. Political risk #2. Technological risk #3. Speculation risk.

@RB I thought people who can answer my first question should understand capital gain vs income gain. One is 50% taxable and the other one is 100% taxable. I know day traders are definitely need to report as income but I am not a day trader. But I do 20 trades per month with a bit a borrowing. Right now I am not claiming any interest expenses. @ scorpioncapital It makes a big difference whether I report as capital gain or income because my winning positions far outweigh the losing positions. Most of my trades are net positive. I won't trigger loss just because some positions went down below my cost. If I report capital gain as income, I'll pay $2000 tax this year vs $1000 in terms of realized gain. My main question is when do I consider changing to reporting capital gain as income? I want to know if anyone had experience being challenged by CRA or know other people. This is very vague: (From taxtips.ca) The combination of a number of the following factors may cause the gains or losses to be treated as income (100% taxable), not capital (50% taxable): -frequent transactions, extensive buying and selling of securities -short periods of ownership -some knowledge of or experience in the securities markets ( Comment: Ouch! Punishing knowledgeable people) -security transactions form a part of the taxpayer's ordinary business -a substantial portion of the taxpayer's time is spent studying markets and investigating potential securities purchases ( Comment: Ouch! Punishing hard working people) -security purchases are financed primarily with margin or debt -the taxpayer has advertised or otherwise made it known that he is willing to purchase securities -securities purchased are speculative in nature or do not pay dividends Re: Incorporating: I don't mind if it gives me no tax benefits and involve more work as long as it allows me to borrow more money easily from the bank or other people. That's the question of borrowing money from bank as one person corporation vs an individual with income from job and investment. If bank looks at earning power of both to determine that amount of lending, it makes sense that an individual with two incomes can borrow more than an one person corporation structure because corporation only earns from investment. Tax rate for investment is almost the same for corporation and a person at maximum tax bracket.. Before a person reaches maximum tax bracket, a corporation pays more tax on investment. There is no tax inventive to hold investment inside corporation. In fact I pay less tax as individual. But if I can borrow more as corporation, I am willing to pay 50% tax on gain from 500k than 30% tax on gain from 100k. Its like increasing revenue with lower net profit margin.

Hi all, This is my first post. happy to find like minded people. I've been to many forums and many think I am a crazy person. To introduce myself, I graduated in 2008 with B. Electrical Engineering. You knew what happened. Nobody wanted to hire me. Not a single interview! No worry. I was preparing for that since high school thanks to the book "Rich dad, Poor dad". I am just like many people. I don't really care about money itself but I need the independence very badly. So I started investing in the stock market in 2007 with $1000, bought RBC equity fund. A year later, I was experimenting with picking stocks and made some mistakes. After trial and error, my performance has becoming very good and stable. With a bit of leverage(~30%), I obtained 40% return in 2013 and 28% in 2014, 5% YTD 2015. The problem I have right now is not enough capital. I have two questions. #1 Capital account vs income account (Canadian) In the past 3 years, I started combining concentrate investing and value investing and the result is very good. It involves lots of trades. As a result, I start to worry about tax issues. 2013: Number of Trades that generate gain/loss: ~5 trades/ month(Buying/sell shares, selling covered calls) Net gain from transactions: ~$7,000 2014: Number of Trades that generate gain/loss: ~ 20 trades/month (Buying/sell shares, selling covered calls and cash secured puts) Net gain from transactions: ~$10,000 I used margain. Average holding period of each trade ranges from one month to several months or 1 year. I am not full time investor, just doing it part time. I can't even live on this capital gain income. After 10 years, it can replace my job income.(30k/year pretax) As my portfolio grows, I see the number of trades increases because I have more capital to deploy. Right now, I am reporting in capital account. When should I worry about reporting on income account? $10k capital gain/loss is not worth CRA's resource to reaccess ? What about when it reachs $50k ? 100k? Is there an income threshold that I should start worrying? I don't want to go back 10 years and redo all tax returns 10 years from now. #2 Business structure for stock market investor The biggest incentive for me to create a business structure for stock investing is to obtain more capital. When should I consider incorporate as a single person corporation in terms of investable asset and investment income? What about sole proprietor ? Its tax rate is same as individual? Does it help me to get a bigger unsecured line of credit if I set up a sole proprietor business structure? Thanks