Advice for nephew on compound interest
Discussion
My 18 year old nephew has recently started work and with some of his earnings has taken to buying some limited edition trainers and clothing and selling them at a decent profit. He's working hard and now is earning more from his trainers as he is from his apprenticeship. We got on to talking about compound interest and how investing some money early at his young age would give him a huge head start for later in life because of compounding.
I recall a while ago on pistonheads I saw a really well done, concise example of compounding in the form of an article showing two people's savings being displayed against each other. One person earned minimum wage and put away a small amount from age 16 to 35 then stopped and another higher earner putting away a huge sum from age 40 onward and the lower earner had a larger investment at the end. For the life of me I can't find it now and I'd love to show him while his interest is high. Can anyone else recall the article I mean?
I recall a while ago on pistonheads I saw a really well done, concise example of compounding in the form of an article showing two people's savings being displayed against each other. One person earned minimum wage and put away a small amount from age 16 to 35 then stopped and another higher earner putting away a huge sum from age 40 onward and the lower earner had a larger investment at the end. For the life of me I can't find it now and I'd love to show him while his interest is high. Can anyone else recall the article I mean?
Whilst saving some money regularly is a good discipline and the right thing for most people, this lad sounds like an entrepreneur. I think I'd be encouraging him to put all his profit into more stock / a wider range of stock and see if he can grow a business form it that could change his life for the better (albeit complete his apprenticeship).
I became an entrepreneur in my 30's because until then I was scared of taking risks, believed in saving everything I earnt and so on. Looking back on various opportunities I missed because instead of investing a few quid I put that money in to some safe savings account. I regret that now.
I became an entrepreneur in my 30's because until then I was scared of taking risks, believed in saving everything I earnt and so on. Looking back on various opportunities I missed because instead of investing a few quid I put that money in to some safe savings account. I regret that now.
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hstewie said:
I've been looking for that article for a while - thanks!hstewie said:Simpo Two said:
If he's making <£1Kpa no need for anything I believe.
If he has to register for VAT he's doing damn well!
Liability insurance - for trainers, really?
The op says he's earning as much from this as his apprenticeship so that would be well over £1000If he has to register for VAT he's doing damn well!
Liability insurance - for trainers, really?
but along way short of the vat threshold
I'm always amazed by this reselling thing.
I've seen plenty of people say they make money selling trainers
but I never under stand the reasoning behind the resell prices when there's seems to be a conveyer belt of hyped limited edition collaboration releases not a week goes by with out a supreme drop or yeezy release.
itlab said:
I've seen plenty of people say they make money selling trainers
The secret would seem to lie in being able to buy them at a discounted price somewhere, and then you wonder why the end user doesn't just find them online at that price (unless you need to buy 1,000 pairs to get the discount of course)Condi said:
Not always, buy a limited edition Adidas or Nike pair, or a pair of Yeezy's when they've just come out then stick on Ebay.
Yup, and folk like my cousin will buy them, admire them and store them in a large cupboard at home without ever wearing them. Probably in the way that some folk collect watches. Bizarre behavior to me, but he can often spend hundreds of pounds on limited edition trainers, most often Adidas, usually with some sort of retro theme. I don't think there's a specific "investment" aspect to it but there's certainly a market out there for them. Simpo Two said:
rockin said:
Tax? VAT? Liability insurance?
If he's making <£1Kpa no need for anything I believe.If he has to register for VAT he's doing damn well!
Liability insurance - for trainers, really?
But yes, strange world where almost everything seems limited edition which to me would defeat the point but he seems to be doing well. He sold a pair of Air Force 1s today for near £900 which he paid £240 including import tax for. Apparently he’s even selling crocs now! Like they’re a thing again. I’m baffled by it but I’m really happy he’s working hard and learning.
Edited by anonymous-user on Wednesday 14th October 18:29
Simpo Two said:
The secret would seem to lie in being able to buy them at a discounted price somewhere, and then you wonder why the end user doesn't just find them online at that price (unless you need to buy 1,000 pairs to get the discount of course)
I have seen people camp outside a certain trainer shop in Leeds where I live for over 24 hours to buy the latest limited edition trainers, or pay someone to camp out on their behalf. I find it bizzare personally but there is a big market in limited edition trainers and the people who collect them. Jamescrs said:
I have seen people camp outside a certain trainer shop in Leeds where I live for over 24 hours to buy the latest limited edition trainers, or pay someone to camp out on their behalf. I find it bizzare personally but there is a big market in limited edition trainers and the people who collect them.
Well, if they immediately resell at a profit, well done to the nephew and more fool the punters.Gassing Station | Finance | Top of Page | What's New | My Stuff