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Living entirely off the stock market
Rank: New-farer Joined: 1/23/2015 Posts: 16 Location: mtandao
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Sober wrote:maka wrote:dunkang wrote:Just like in a Casino, trying to live of the NSE is purely gambling. And as you already know, only the house wins (read brokers). I personally trade at the NSE as a hobby.
If you meant waiting for annual dividends, BOSS, you will need a lot of capital, the div yields are not that good. Really?I have made quite a bit out of trading...I have clients who have made astronomical figures.... A couple of things must be clear before you start living off stocks: 1. What gains are you looking at per year? 2. The gains are a % of what you put in 3. what happens when stocks dip? 4. You should 'eat' the gains only not the capital 5. what is the exit point for each counter? 6. You must diversify... If those are clearly noted and commented on, then whether the answer is Yes or No will come out clearly Those who have been at NSE for close to 10 yrs or longer can shed light. What was their rate of return? If say, the avg is 64%, and you need 100k/month, then lets calculate how much to invest. 100k/month=1.2mn per annum. 1.2Mn/0.64 =1.875Mn. This means you need to invest 1.875mn. To be safe when stocks dip, don't eat all returns, you may consider investing 4Mn so that you get 2.56Mn profit, then eat your 1.2Mn/yr and reinvest the remaining profits  Compounding
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Rank: Elder Joined: 7/22/2009 Posts: 7,851
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growing wrote:Sober wrote:maka wrote:dunkang wrote:Just like in a Casino, trying to live of the NSE is purely gambling. And as you already know, only the house wins (read brokers). I personally trade at the NSE as a hobby.
If you meant waiting for annual dividends, BOSS, you will need a lot of capital, the div yields are not that good. Really?I have made quite a bit out of trading...I have clients who have made astronomical figures.... A couple of things must be clear before you start living off stocks: 1. What gains are you looking at per year? 2. The gains are a % of what you put in 3. what happens when stocks dip? 4. You should 'eat' the gains only not the capital 5. what is the exit point for each counter? 6. You must diversify... If those are clearly noted and commented on, then whether the answer is Yes or No will come out clearly Those who have been at NSE for close to 10 yrs or longer can shed light. What was their rate of return? If say, the avg is 64%, and you need 100k/month, then lets calculate how much to invest. 100k/month=1.2mn per annum. 1.2Mn/0.64 =1.875Mn. This means you need to invest 1.875mn. To be safe when stocks dip, don't eat all returns, you may consider investing 4Mn so that you get 2.56Mn profit, then eat your 1.2Mn/yr and reinvest the remaining profits That is why personally I quoted 5 million. 5 million and extensive knowledge you will survive. But you have to know what you are doing. Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
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Rank: New-farer Joined: 1/23/2015 Posts: 16 Location: mtandao
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MaichBlack wrote:growing wrote:Sober wrote:maka wrote:dunkang wrote:Just like in a Casino, trying to live of the NSE is purely gambling. And as you already know, only the house wins (read brokers). I personally trade at the NSE as a hobby.
If you meant waiting for annual dividends, BOSS, you will need a lot of capital, the div yields are not that good. Really?I have made quite a bit out of trading...I have clients who have made astronomical figures.... A couple of things must be clear before you start living off stocks: 1. What gains are you looking at per year? 2. The gains are a % of what you put in 3. what happens when stocks dip? 4. You should 'eat' the gains only not the capital 5. what is the exit point for each counter? 6. You must diversify... If those are clearly noted and commented on, then whether the answer is Yes or No will come out clearly Those who have been at NSE for close to 10 yrs or longer can shed light. What was their rate of return? If say, the avg is 64%, and you need 100k/month, then lets calculate how much to invest. 100k/month=1.2mn per annum. 1.2Mn/0.64 =1.875Mn. This means you need to invest 1.875mn. To be safe when stocks dip, don't eat all returns, you may consider investing 4Mn so that you get 2.56Mn profit, then eat your 1.2Mn/yr and reinvest the remaining profits That is why personally I quoted 5 million. 5 million and extensive knowledge you will survive. But you have to know what you are doing. @MaichBlack exactly! Compounding
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Rank: Member Joined: 8/14/2009 Posts: 244
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wkirumba wrote:Is it possible to live entirely off the stock markets and what does it entail?
YES: You invest now and wait for 25 years to live off stocks.
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Rank: Member Joined: 8/14/2009 Posts: 244
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stock.enigma wrote:wkirumba wrote:Is it possible to live entirely off the stock markets and what does it entail?
YES: You invest now and wait for 25 years to live off stocks.
I have been in the NSE for 20 yrs now. I can hardly live off stocks. But if you mix with real estate, in 25 years, with a modest and consistent portfolio balancing, YES YOU CAN.
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Rank: Veteran Joined: 1/20/2011 Posts: 1,820 Location: Nakuru
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I will use Safaricom shares as an example and will assume you are looking at 100k per month and will also assume that the dividend will remain at 0.64 per share for you to earn a divident of 1.2 million bob per year from Safcom you will have to buy 1,875,000 ordinary shares. Going by todays price of shillings 16.30 you be required to invest kshs. 30,562,500 (1,875,000 * 16.30) for you to earn 100k per month in the future. If you boarded this bus in 2010 when a share was trading at 2 bob, then kshs. 3,750,000 would have done it for you if all factors remain constant (no share price surges, no lower dividend) then 100k will be guaranteed forever. An if inflation will remain the same forever you will live the same lifestyle forever.Unfortunately in life nothing is constant....it rained on Monday but it has not rained today. As someone has pointed out.......have a very keen look at the prices today, do some research. Do some cherry picking and look for cash to buy Dumb money becomes dumb only when it listens to smart money
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Rank: New-farer Joined: 1/23/2015 Posts: 16 Location: mtandao
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If you bought centum 42000 shares at 44.5 = 1.869Mn (PE @ 9.8) and sold them at 72 (PE @ 16) = 3.024Mn, you would have made approx 1.1Mn Compounding
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Rank: Member Joined: 8/14/2009 Posts: 244
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Fyatu wrote:I will use Safaricom shares as an example and will assume you are looking at 100k per month and will also assume that the dividend will remain at 0.64 per share
for you to earn a divident of 1.2 million bob per year from Safcom you will have to buy 1,875,000 ordinary shares.
Going by todays price of shillings 16.30 you be required to invest kshs. 30,562,500 (1,875,000 * 16.30) for you to earn 100k per month in the future.
If you boarded this bus in 2010 when a share was trading at 2 bob, then kshs. 3,750,000 would have done it for you if all factors remain constant (no share price surges, no lower dividend) then 100k will be guaranteed forever. An if inflation will remain the same forever you will live the same lifestyle forever.Unfortunately in life nothing is constant....it rained on Monday but it has not rained today.
As someone has pointed out.......have a very keen look at the prices today, do some research. Do some cherry picking and look for cash to buy Suppose you have the Ksh 30.5 million cash. Would you not put it in a fixed deposit account. Suppose you are offered an interest of 10%, you will make Ksh 3 million a year. Suppose you are disciplined consumer, you take your Ksh 1.2 million a year for your living expenses and re-invest the balance of Ksh 1.8 million. In year 2 you will increase your fixed deposit to Ksh 32.3 million. Essentially, you deposit will continue growing year after year while you are living on interest income. How about that??
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Rank: Veteran Joined: 2/3/2010 Posts: 1,797 Location: Kenya
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yes Warren buffet does I may be wrong..but then I could be right
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Rank: Veteran Joined: 2/10/2010 Posts: 1,001 Location: River Road
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Having 30.5m and living on 1.2m a year now that's called being a miser. With good trading that 32.5m should be around 45-55m in 2 years time.
@wkirumba yes you can but with proper stock analysis and leverage. I have been living off my capital gains the last two years. You must learn leverage and deleverage
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