Investment Owner's Contract

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SuperbShineDetail

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For you new detailing business owner's and old dogs who are interested in investing a portion of your earnings into stocks, I thought I'd share this invaluable form with you.

I drafted this myself copied from the book, "The Intelligent Investor" by Benjamin Graham (there may be some grammatical errors). It basically states that you are holding a certain stock(s), and will not sell it until a specified amount of time has been met. You can obviously modify it to your liking to reflect your personal/business goals. I myself have one written up for my personal goals and one for my detailing business. The one for my detailing business I have taking 10% of my gross revenue put into two different stocks.

Benjamin Graham was one of Warren Buffet's personal idols who he looked up to when investing. This book is considered one of the best when it comes to learning about the stock market.

I'm not sure if we can attach a word document, so i'll just post the text here. E-mail, or message me if you want the word file.

Let me know if you like it. Thanks!





INVESTMENT OWNER’S CONTRACT

I, ____________ ____________, hereby state that I am an investor who is seeking to accumulate wealth for many years into the future.

I know that there will be many times when I will be tempted to invest in stocks or bonds because they have gone (or “are going”) up in price, and other times when I will be tempted to sell my investments because they have gone (or “are going”) down.

I hereby declare my refusal to let a herd of strangers make my financial decisions for me. I further make a solemn commitment never to invest because the stock market has gone up, and never to sell because it has gone down. Instead, I will invest $_____.00 per month, every month, through an automatic investment plan or “dollar-cost averaging program,” into the following mutual fund(s) or diversified portfolio(s):
__________________________,
__________________________,
__________________________,
I will also invest additional amounts whenever I can afford to spare the cash (and can afford to lose it in the short run).

I hereby declare that I will hold each of these investments continually through at least the following date: _______________. The only exceptions allowed under the terms of this contract are a sudden, pressing planned expenditure like a housing down payment or a tuition bill.

I am, by signing below, stating my intention not only to abide by the terms of this contract, but to re-read this document whenever I am tempted to sell any of my investments.

This contract is valid only when signed by at least one witness, and must be kept in a safe place that is easily accessible for future reference.

Signed: Date:
____________ ____________ __________ ___, 20__
Witnesses:
____________ ____________
____________ ____________
 
I am an experienced online securities trader.

I would advise caution to any attempts at automatic investing, especially with stocks.
Can you make money this way? Yes.
However, it is more luck than skill if one is not fully educated in securities and truly understands what they are doing.
With investments comes taxes, tax preparation fees, trading house fees, rules and regulations as to what losses can and cannot be deducted, etc...

One does not need a college education to take the wheel of their investments.
One does, however, need to be fully educated in the field of securities should they choose to take command of the wheel of their investments.
Such education takes time, followed by a 2 -3 year learning curve once fully engaged.

The modern age of technology and internet access to real time information can put anyone in the driver seat of their own investments.
It also means you can crash your portfolio and become a statistic in a field with a wash out rate of greater than 90%.

On paper, anyone can do it and be successful.
It takes only a base level of intelligence and common sense to be successful at it.
However, it also takes a professional level of patience and nerves of steel.
Personality has as much to do with success in investing as academics.
Common sense will take you much farther than academic IQ or aptitude.

Like anything else.....
Know what you are doing, or simply don't do it!
 
Great info vanev. I have been trading for years now. This form is simply a tool that should help others hold onto an investment despite a fluctuating market. I think it goes without saying that the stocks should you choose to invest should be a sound and well thought out decision. I actually do not use an automatic investing plan, but automatic may be the way to go for some.
 
SuperbShineDetail said:
Great info vanev. I have been trading for about 5 years now. This form is simply a tool that should help others hold onto an investment despite a fluctuating market. I think it goes without saying that the stocks should you choose to invest should be a sound and well thought out decision. I actually do not use an automatic investing plan and just purchase them through my broker on a regular basis, but automatic may be the way to go for some.

Sent from my SM-G930V using Autogeekonline mobile app
Click to expand...

Yes.
Don't get the idea that I completely frown upon your suggestion to others regarding investments.
I am not being negative towards you nor the subject matter.

I encourage people to enter the world of investing, and online investing specifically.
I encourage people to take the wheel and get into the driver's seat of their own investments.
I encourage people to take command of their financial life and fully engage.

Time, experience, and education (as well as having trained others in this field) have taught me valuable lessons in regards to investing and money management.
One of the most important lessons learned is simply this:
People are just bad with money.
Makes no difference the IQ, aptitude, academic prowess, level of formal education, social status, talent level, genetic make-up, gender, race, religion, nor anything else.

There is a reason the rich get richer, and the poor get poorer.
There is a reason the gap between rich and poor is ever expanding, and not shrinking.
There is a reason the richest 1% hold more wealth, and the bottom 90% hold more debt.

I just want people to know what they are doing, and be fully educated, before they do it.
Crawl. walk, run......before flying.
Entering the world of investing, without being fully prepared and knowledgeable, is like someone entering a Formula 1 race, having just received their driver's license at 16, and never driven a Formula 1 car before.
They are just going to crash, hurt themselves and probably someone else, and lose all their money.
 
vanev said:
Yes.
Don't get the idea that I completely frown upon your suggestion to others regarding investments.
I am not being negative towards you nor the subject matter.

I encourage people to enter the world of investing, and online investing specifically.
I encourage people to take the wheel and get into the driver's seat of their own investments.
I encourage people to take command of their financial life and fully engage.

Time, experience, and education (as well as having trained others in this field) have taught me valuable lessons in regards to investing and money management.
One of the most important lessons learned is simply this:
People are just bad with money.
Makes no difference the IQ, aptitude, academic prowess, level of formal education, social status, talent level, genetic make-up, gender, race, religion, nor anything else.

There is a reason the rich get richer, and the poor get poorer.
There is a reason the gap between rich and poor is ever expanding, and not shrinking.
There is a reason the richest 1% hold more wealth, and the bottom 90% hold more debt.

I just want people to know what they are doing, and be fully educated, before they do it.
Crawl. walk, run......before flying.
Entering the world of investing, without being fully prepared and knowledgeable, is like someone entering a Formula 1 race, having just received their driver's license at 16, and never driven a Formula 1 car before.
They are just going to crash, hurt themselves and probably someone else, and lose all their money.
Click to expand...


I do agree with this however, eventually the little birdy needs to leave its mother and fly on its own.

What I mean is sometimes people need to make their own mistakes, whether it be checking off something on their bucket list, plunging into starting a new business, or investing in a certain stock. By investing say, 10% of your businesses earnings, you are setting yourself up for great returns and minimal losses. 10% is not a lot. I see this as a great starting point for new investors and business owners. Remember that there is risk associated with every investment. As I mentioned in the original post, you can modify the contract to your own needs. If you want to invest 1%, then go right ahead. If you don't want to invest at all, then read no further. Take it for what it is.

With this being said, you can never underestimate the value of knowledge, and being well equipped before diving into something can save you lots of time and money.

On that note I'll leave you with a favorite quote of mine by Eleanor Roosevelt, "Learn from the mistakes of others. You can't live long enough to make them all yourself."
 
SuperbShineDetail said:
I do agree with this however, eventually the little birdy needs to leave its mother and fly on its own.

What I mean is sometimes people need to make their own mistakes, whether it be checking off something on their bucket list, plunging into starting a new business, or investing in a certain stock. By investing say, 10% of your businesses earnings, you are setting yourself up for great returns and minimal losses. 10% is not a lot. I see this as a great starting point for new investors and business owners. Remember that there is risk associated with every investment. As I mentioned in the original post, you can modify the contract to your own needs. If you want to invest 1%, then go right ahead. If you don't want to invest at all, then read no further. Take it for what it is.

With this being said, you can never underestimate the value of knowledge, and being well equipped before diving into something can save you lots of time and money.

On that note I'll leave you with a favorite quote of mine by Eleanor Roosevelt, "Learn from the mistakes of others. You can't live long enough to make them all yourself."
Click to expand...

Excellent!
Very well said.

Good idea in referencing the 10% ceiling.
This touches on a foundation rule for investing.
The rule: Never invest more money than you can afford to lose.
A rule that almost everyone breaks, and almost everyone who does so, pays for it.

No one is going to bat a 1000%.
Mistakes are going to be made, and money is going to be lost.
The key is to manage mistakes and losses by not over reaching.

You do have to start somewhere.
You do have to be in it to win it.
You are not going to win the game by sitting in the stands, you have to be on the field.

So, for anyone reading this thread, and new to investing in securities.
Educate yourself.
Pay your dues.
Work your way up through the ranks of knowledge and experience.
Crawl, walk, run, fly.
Get in the game.

Remember these rules for investing:
- Never invest more money than you can afford to lose.
- You build wealth, not chase it.
- The fastest way to go broke in investing.......try to get rich quick.
 
I personally do not invest in any single stocks...too risky for me. I use growth stock mutual funds only (Growth, Growth & Income, Aggressive Growth, and International 25% of each). 15% of my income every month. Your first post talks about stocks then the form you copied says Mutual Funds. Im not sure which you are actually talking about though.
 
Essentially it doesn't matter what you decide to invest in. This form can be modified to your liking. You can invest in exercise if you want. This form is just a simple tool i find helpful for investments.

Sent from my SM-G930V using Autogeekonline mobile app
 
I play around in the market and have done pretty good after learning several "hard lessons" over the years. Strict adherence to stop losses protects me somewhat from those times they don't go the way i planned. For those that do behave as i thought and wanted, trailing stops catch me some profit before they turn bad.

My only question on your "contract" is directed at the paragraph that states you will hold a certain position until a certain date. My system involves targets and the date it reaches that target (or stops out) can't be determined before hand. that target date or stop out may be the next day, the next month or 6 months.
 
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