I have just finished reading 2 books by a chap named Derek Foster.  It turns out that I did not read them in sequence, but they both did make a lot of sense.

So far in my share dealings, I have been looking for capital growth.  In other words I have been attempting to buy the shares at a price which I believe is lower than what they are worth.  With the markets being as crazy as they are right now I figured “I’ll buy when the prices drop, and sell when they shoot up again.”

Basically I have the mindset of a share trader.

Investing in shares for financial independence

Sometimes trading in shares is a good thing.  For example I made over 20% return in under 2 weeks with one of my stock picks.  Unfortunately I did not sell at the peak, and now I am sitting at a 13% return.  That said, I fully expect the price to go up again in the next few weeks.

Derek Foster in his book, The Lazy Investor, puts forward a strong case for handling share dealings differently.  Rather than looking for capital growth (the increas in share price), you concentrate on receiving dividends and using DRIP programs.

I will explain more of his ideas soon once I have re-read these 2 books.

The reason I am prepared to listen to this guy is that he retired at the age of 34 using the cashflow from his shares.  He has done what he is talking about – so that desreves my attention!