How to Invest for Beginners (2024)
Summary
TLDRThis video script serves as a comprehensive guide for beginners interested in investing. It covers the basics of investing, the rationale behind it, and dispels common fears. The speaker advocates for investing in index funds like the S&P 500 for long-term growth, while also introducing the concept of 'fast lane' investing, which involves investing in oneself or one's business for potentially higher returns. The script emphasizes the importance of understanding the market and making informed decisions, suggesting that self-investment can be a powerful strategy for wealth creation.
Takeaways
- 💡 Investing is about putting your money to work to earn more, combating the loss of purchasing power due to inflation.
- 🏦 The two main ways to grow investments are through rental income or selling the asset for a higher price later on.
- 📈 Stocks and shares are accessible investment options for the average person, providing potential for capital appreciation and dividend income.
- 🤔 For beginners, the fear of losing money is common, but historically, markets have trended upwards over the long term.
- 📊 Index funds offer a way to invest in a broad market segment, like the S&P 500, reducing the risk of individual stock picking.
- 💼 Warren Buffett suggests that most people should invest in index funds rather than trying to pick individual stocks.
- 🏆 Investing in an index fund allows you to own a diversified piece of the market, spreading risk across many top companies.
- 🚀 Fast lane investing involves investing in yourself or your own business, which can potentially yield higher returns than traditional investments.
- 💼 The slow lane to wealth involves steady, long-term investment in index funds, while the fast lane might include entrepreneurship or skill enhancement.
- 💰 The key to successful investing is understanding the different options available and choosing the approach that aligns with your financial goals and risk tolerance.
- 📚 Education in investing and personal finance can be a valuable investment, helping individuals make informed decisions about their money.
Q & A
What is the main purpose of investing money according to the script?
-The main purpose of investing money is to enable your money to make more money over time, thus growing wealth and combating the effects of inflation.
What is inflation and why is it a concern for someone who has saved money?
-Inflation is the rate at which the general level of prices for goods and services is rising, and subsequently, the purchasing power of currency is falling. It's a concern because it erodes the purchasing power of money over time, meaning the same amount of money will buy less in the future compared to the present.
What are the two general ways in which an investment can make you money?
-The two general ways are: receiving rental income or dividends from the investment, and selling the investment at a higher price than the purchase price, realizing a capital gain.
Why does the script suggest investing in stocks and shares for beginners?
-Stocks and shares are suggested for beginners because they are a common and relatively accessible form of investment that does not require large amounts of money, and they are less risky compared to other investments like crypto or fine art.
What is the concept of an index fund and why is it recommended for most investors?
-An index fund is a type of mutual fund with a portfolio constructed to match or track the components of a financial market index, like the S&P 500. It is recommended because it offers diversification and reduces the risk of individual stock picking, allowing investors to earn returns that track the overall market.
What is a dividend and how does it relate to stock investments?
-A dividend is a payment made by a corporation to its shareholders, usually as a distribution of profits. In the context of stock investments, dividends provide a way for investors to earn income from their shares, in addition to potential capital gains from an increase in the stock's value.
According to the script, what is the general advice for beginners when it comes to picking stocks?
-The script advises beginners against trying to pick individual stocks unless they are financial professionals. Instead, it suggests investing in an index fund to benefit from the overall market growth without the need for extensive stock-picking knowledge.
What is the S&P 500 and how does it relate to index funds?
-The S&P 500 is a stock market index that measures the performance of the 500 largest companies listed on stock exchanges in the U.S. It is related to index funds as it is tracked by certain index funds, allowing investors to invest in a diversified basket of these top companies.
What is the 'fast lane' investing approach mentioned in the script and how does it differ from traditional investing?
-The 'fast lane' investing approach involves investing in oneself or in one's own business with the aim of achieving higher returns than traditional investments like the S&P 500. It is more entrepreneurial and focuses on creating value through personal skills or business growth, rather than investing in existing companies.
What are some common fears and concerns about investing mentioned in the script, and how are they addressed?
-Some common fears include the potential loss of investment due to market downturns or the investment becoming worthless. The script addresses these by explaining the long-term growth trend of the stock market and the importance of holding investments through market fluctuations to benefit from compound interest over time.
What is the script's stance on investing in crypto as a form of wealth building?
-The script presents a cautious stance on investing in crypto, suggesting it should only be done with money one can afford to lose due to its high-risk nature. It contrasts this with investing in stock market index funds, which are presented as a more stable and historically reliable method for wealth building.
Outlines
💼 Introduction to Investing for Beginners
This paragraph introduces the concept of investing for beginners, outlining various investment options such as stocks, bonds, real estate, and more. It emphasizes the fear of potential loss and introduces 'The Ultimate Guide to Investing For Beginners' as a resource to address these concerns. The guide is structured into four parts: the basics and philosophy of investing, the rationale for investing in stocks and shares, common fears and questions about investing, and an alternative approach known as 'fast lane investing'. The importance of investing to combat inflation and the idea of money growing on its own are highlighted, setting the stage for a deeper dive into investment strategies.
📈 Understanding Stocks, Shares, and the Philosophy of Investing
The second paragraph delves into the specifics of investing in stocks and shares, explaining the concept of buying a percentage ownership in a company and the potential for profit through capital gains and dividends. It discusses the challenges of stock picking and the Warren Buffett-endorsed strategy of investing in index funds, which provide diversification and reduce the risk associated with individual stock selection. The S&P 500 index fund is presented as an example, illustrating how it represents a basket of the top 500 U.S. companies, thereby allowing investors to track the overall performance of the market with less effort and expertise than picking individual stocks.
🤔 Common Concerns and How to Start Investing
This paragraph addresses common fears and concerns about investing, particularly the risk of losing money due to market fluctuations. It reassures viewers that while temporary downturns can occur, the historical trend shows that markets generally rise over time, emphasizing the importance of a long-term perspective. The paragraph also discusses the misconception that investing requires a significant amount of money, clarifying that even small amounts can be invested through various platforms. It provides examples of investment apps and the benefits they offer, such as practice investing with virtual money and the ability to copy investment strategies from experienced investors.
🚀 Fast Lane Investing: Beyond Traditional Methods
The fourth paragraph introduces the concept of 'fast lane investing' as an alternative to traditional, long-term investment strategies. It challenges the idea of slow wealth accumulation through methods like investing in the S&P 500 and instead promotes investing in oneself or one's own business for potentially higher returns. The paragraph suggests that by investing in personal skills or starting a business, an individual can significantly increase their earning potential and achieve wealth much faster than through traditional investment vehicles. It encourages viewers to consider their own abilities and entrepreneurial ventures as viable investment opportunities.
📚 Conclusion and Further Exploration of Fast Lane Investing
In the final paragraph, the video script concludes by summarizing the key points discussed and inviting viewers to explore the concept of fast lane investing further. It references a book review of 'The Millionaire Fast Lane' by MJ DeMarco, which advocates for a more aggressive and self-focused approach to wealth creation. The paragraph reinforces the idea that investing in oneself and one's own business can yield higher returns than traditional investment methods and encourages viewers to think creatively about their potential for financial growth.
Mindmap
Keywords
💡Investing
💡Inflation
💡Stocks and Shares
💡Dividends
💡Broker
💡Index Fund
💡Warren Buffett
💡Compound Interest
💡Fast Lane Investing
💡S&P 500
💡Cryptocurrency
Highlights
The purpose of investing is to make your money grow and combat the effects of inflation.
Investing involves buying assets that can generate income or increase in value over time.
Common investment options include stocks, bonds, real estate, and various other asset classes.
The fear of losing hard-earned savings is a common concern for new investors.
The video is divided into four parts: basics and philosophy, investing in stocks and shares, addressing fears, and fast lane investing.
Investing in stocks and shares means owning a percentage of a company and potentially earning from price increases or dividends.
Warren Buffett recommends investing in index funds for beginners due to their diversification and lower risk.
Index funds track a market index, spreading investment across multiple companies to mitigate risk.
Investing in an index fund like the S&P 500 allows you to own a piece of the top companies in the US economy.
The historical performance of the stock market shows an overall upward trend, despite periodic downturns.
Investing in the stock market index funds is a long-term strategy that can lead to significant wealth accumulation.
The chances of losing all your money in a well-diversified index fund are extremely low.
Investing platforms like Vanguard and trading212 offer accessible entry points for new investors.
Fast lane investing involves investing in oneself or one's own business for potentially higher returns than traditional investments.
Investing in personal education or skills can significantly increase one's earning potential.
Building and growing a personal business can offer higher returns than traditional investment vehicles.
The millionaire fast lane approach emphasizes self-investment and business ownership as pathways to wealth.
Transcripts
so let's say you want to get started
with this investing thing you might have
a bit of money saved it's probably not
enough for a house but you decide you
should probably invest it in something
you could invest in stocks shares
equities government bonds corporate
bonds real estate foreign exchange
crypto nfts Futures Fine Art watches
there seems to be tons of stuff out
there and you might have even seen those
ads on YouTube from the gurus talking
about day trading and trading foreign
exchange and how you could make money in
that way through investing and on top of
all of this confusion there's the very
real fear that you might lose all of
that money that you've worked so hard to
save up so in light of all of that this
is The Ultimate Guide to Investing For
Beginners and we're going to split this
video up into four parts which are going
to be time stamped down below so you can
skip around if you feel like it part one
is going to be about the basics and the
philosophy behind investing part two is
about why and how to invest your money
in stocks and shares in part three we're
going to be addressing common fears and
questions and concerns about investing
like what if I lose all my money and
then in part four we're going to talk
about fast lane investing which is an
alternative approach to the traditional
investing thing to build wealth part one
the philosophy and the basics of
investing so let's start by talking
about what is the point investing the
point of investing is for your money to
be able to make more money so let's say
you start off with a thousand dollars
that you've saved up through your
hard-earned labor now you could put that
money under your mattress or you could
put it in a bank current account but the
problem with that is that there's this
thing called inflation that you might be
reading about on the news and so your
thousand dollars might be able to buy
you a MacBook Air right now but a few
years from now when inflation goes up
that MacBook Air is going to cost twelve
hundred dollars and so over time your
money loses its purchasing power which
is why you want to ideally invest in
something because when you invest in
something your money grows magically on
its own more on that later and that
means you can combat the effects of
inflation and that brings us to the next
question which is how does the money
magically grow in the first place and
generally the philosophy behind
investing is that you buy something now
and that something makes you more money
over time and there are two ways in
which the thing that you buy can make
you more money let's say you buy a house
it costs a certain amount of money to
buy a house right now but there's two
ways the house makes you money number
one you can rent the house out and so
you're getting rental income every month
and secondly hopefully in theory the
value of the house will also rise over
time if you hadn't bought the house and
you just had that money sitting in a
bank account and over time you're going
to be losing money because inflation is
going to eat away at your savings now
houses are an interesting example
because you get rental income and it's
very easy for us to imagine what that
looks like everyone pays rent and so
you're making money but with most other
asset classes you don't have this
equivalent of rental instead a lot of
these things you're buying and then
you're hoping that you can sell them for
a higher price over time the main
exception to this is some stocks and
shares which we're going to talk about a
little bit later in the video and these
asset classes is a long list of things
that you probably have heard of but you
might not be entirely familiar with you
know we've got stocks shares and
equities which are kind of the same
thing we've got hedge funds we've got
index funds we've got bonds government
bonds corporate bonds you might have
heard some people investing in watches
and then fine arts you've probably heard
of people investing in crypto and even
gaining Lots or losing lots in my case
or losing quite a bit of money because
crypto has crashed recently and a lot of
this can get very complicated quite
quickly and so we're going to simplify
things and for the rest of this video
we're going to talk about investing in
stocks and shares because that is the
main kind of investing that normal
people like you and me can unlock fairly
easily you don't need to have large
amounts of money which you need to
invest in a house you don't need to take
on huge amounts of risk and gambling and
stuff like you need to do with crypto
and you don't need to be an accredited
investor or anything like you need to
invest in like ancient investing
companies or all this fun stuff so
stocks and shares are kind of the basics
of investing and usually when people
talk about investing their money what
they're referring to is I want to buy
some Tesla or I want to buy some Netflix
or I want to buy some Amazon and so
we're going to talk about that part two
why and how to invest in stocks and
shares so when you're investing in
stocks and shares for example you're
basically buying a percentage ownership
in the company that you're investing in
so let's say I wanted to buy shares in
Apple for example apple is a publicly
traded company which means the public
can trade Apple stock now in a dream
world I would just be able to go to
apple.com forward slash buy and I'd be
able to buy a stock of Apple and now I
own some percentage of the company in
reality I can't do that directly I have
to go through a middleman which we call
a broker but once I've gone through this
middleman platform I now personally own
a piece of Apple now I can make money
from stocks and shares in two different
ways firstly I could make money because
I'm hoping the price of Apple or
whatever stock I've invested in is gonna
rise over time so 10 years later I could
sell it for a lot more money than I
bought it fingers crossed but the second
way in which you can make money through
stocks and shares is similar to how you
make a rental income on a house because
certain companies will pay what they
call dividends so for example in the UK
there's a company called BT British
Telecom and they pay dividends so when
you own a piece of BT you're not just
hoping that the price will rise over
time they're also literally paying out
some of the profits that the company
makes to their shareholders and so if
for example you were ridiculously rich
and you owned 20 of BT then every time
they declare a dividend which might be
every three months you would get 20 of
the profits that they are Distributing
to shareholders in reality you and me
we're probably not going to own 20 of a
huge company like that because you put
that would cost absolutely billions but
instead we might get you know ten
dollars fifteen dollars twenty dollars
like five dollars 5.47 here and there
and if we invest in lots of companies
that are paying out dividends then it
feels like you've got this free kind of
rental income but really it's profits
from these companies coming into your
account every month and that's pretty
cool so at this point okay cool you can
now buy stocks in these different
companies you can own a small percentage
offset company but how are you supposed
to choose which companies should you put
all your your money in apple or Netflix
or on Disney Plus or should you go with
a shell or British Petroleum or Ralph
Lauren or like I don't know Unilever or
you know these brands that you might be
familiar with now at this point people
have varying different opinions on the
matter but I'm gonna cite Warren
Buffett's opinion on this which is also
my opinion on this which is that if
you're a beginner to investing unless
you are legitimately a financial
professional who literally does this
full-time for a living you should not
try and pick stocks the average person
will not know enough to know which
stocks to buy they won't know enough to
know when to buy them but they don't
have to because if they can buy all of
America through an index fund because
realistically you and me we're not
really going to have an insight into oh
I reckon Apple's going to do really well
because whatever or I reckon Disney's
going to do really well because whatever
there are literally Financial
professionals whose full-time day job it
is to do that kind of analysis and even
then they don't get it right A lot of
the time and so what you can instead do
is instead of worrying about stock
picking what you should do probably not
Financial advice LOL is invest in an
index fund and that begs the question
what the hell is an index one well an
index fund is a fund and a fund is a
basket like a group of stocks and shares
or other things but stocks and shares
for example and the index component
means that this fund tracks a particular
stock market index for example in the US
there is a really famous Index Fund
called the SNP 500 and this is basically
the top 500 biggest companies in the US
and you can see here these are the
components of the S P 500 right now so
Apple makes up 6.4 percent of the S P
500 because it's big company then we've
got Microsoft Amazon alphabet which is
Google Berkshire Hathaway which is
Warren Buffett's company alphabet Class
C which is also Google Nvidia Tesla
Exxon Mobile you might be familiar with
quite a lot of these companies but if we
scroll all the way down to the 500th
company we've got I don't know Ralph
Lauren and Hasbro and didn't realize
Hasbro was in the S P 500 but you can
see that Hasbro makes up 0.21 of the S P
500 compared to Apple's 6.4 because
those companies are hugely different in
I guess market cap or valuation right so
the point of the S P 500 is that it
gives you a single number that you can
graph over time of like how value able
the U.S stock market is because to be
honest most of the value of the U.S
stock market is in these 500 companies
and so if the value of these 500
companies are slowly increasing over
time which It generally does that means
the U.S stock market is doing well and
these companies are doing well and life
is all good if for example you're in a
recession where the stock market is
going down or if for example covert has
just become a thing and the stock market
has gone down that means that
collectively people have decided that
the value of these stocks is lower than
it once was and so the graph will go
down in those moments so what does this
all mean for you and me as normal retail
investors well basically what it means
is we can invest in an index fund so
let's say I put a thousand dollars into
the S P 500 Index Fund that's very good
because it means that my thousand
dollars is now split between 500 of
these companies and crucially it's split
based on the waiting in the S P 500 so
of my 1 000 that I've just put into the
S P 500 6.4 would be in Apple stock and
so now I own 64 worth of Apple stock and
that's pretty cool I now own a bit of
Apple 5.4 of that would be Microsoft so
I now own 54 worth of Microsoft stock
and 0.015 of that is going to be Ralph
Lauren which is for 498th on the S P 500
and so I now own 14 worth of Ralph
Lauren stock now this is a very good
thing and this is what Warren Buffett
recommends my view for most people the
best thing to do is still on the S P
500. he says that hey if you had an
extra hundred thousand dollars to invest
you should just put it straight into the
S P 500 or some other big Index Fund
because over time your money is going to
track the market you're not trying to
say hey I have a crucial insight into
the market and I know that apple is
going to outperform all these other
companies instead you're thinking you
know what I'm just a normal person I
don't have time to spend 80 000 hours a
week trying to research the out of
all this stuff I'm just gonna kind of
diversify my money across all these top
500 big companies in the US I think
overall U.S companies are going to go up
over time and therefore I don't have to
think too hard about this so what's the
alternative well we talked about how you
could theoretically pick stocks yourself
so you could say you know what I'm going
to ignore the S P 500 but chances are
you are not going to beat the market
chances are unless you just get really
lucky you're not going to be real
reliably able to get the returns that
you would get by just investing in all
500 of these companies now there have
been a bunch of studies and surveys and
Warren Buffett even did a challenge
experiment thing about this that
basically show that very few funds
overall actually outperformed the S P
500 and if you've got a fund that beats
the S P 500 I.E it does better in that
year than the S P 500 did it's unlikely
to do the same the following year and so
a lot of these phones are trying to
quote beat the market but as Warren
Buffett and a lot of these other people
say you cannot beat the market so let's
just invest in the market directly just
put your money in an index fund and
don't think too hard about it every
single person I know who has invested by
picking stocks has lost money and every
single person I know who has invested by
just investing in an index fund has made
money over time the next question that
this raises is okay cool I want to
invest in a stock market index fund how
the hell do I do that do I just go on s
p 500.com forward slash buy and buy some
index funds again it's not quite how it
works you need a bit of a middleman and
that's where these kind of online
platforms come in now this is going to
vary depending on whatever country
you're in so if you want to find a
stocks and shares investment platform in
your country then just Google that in
the UK for example there are loads the
ones that I personally use are Charles
Stanley direct because that's the first
one I started using in 2015. I also use
Vanguard Vanguard is super big and super
legit you can check it out and the app
that I use personally for investing in
individual stocks these days is trading
212 and in fact incidentally this video
is now sponsored by trading212 this is
kind of fun as you can tell I'm
recording on a different day anyway if
you want to get started with investing
training212 genuinely is the app that I
use it's the best way to get started you
can trade stocks and shares you can also
open an Isa an individual savings
account if you're in the UK one of the
cool things about trading 212 is you can
practice investing with practice money
so everything about the markets is
identical it's just that you're
investing fake money rather than real
money and if you're uncomfortable
investing real money for now this is a
great way to become more familiar with
the concept of investing and then once
you're ready to invest with real money
you can just switch using a simple
button on the app and you can deposit
money through Apple pay up to two
thousand pounds and then you can use
bank transfer subsequently and the other
cool thing about trading 212 is they've
got this really cool pies feature where
basically you can look on the app and
you can see other investment pies that
other people have created so you'll have
these like Finance Pros that are
creating their custom pies and you'll
see that they've allocated 10 to the s p
or 20 to the ftse 100 or this percenter
apple or Tesla or Microsoft or whatever
and then you can see the performance of
that specific pie over time and then
what you can do if you really want to is
you can copy and paste someone's pie
that they have built into your own
investing account and now you can
automatically with a single click invest
let's say 100 pounds into that pie and
so that 100 pounds will then be split
amongst the various allocations that the
person has decided to do in the pie and
that's great like obviously I'd still
recommend investing in some broad stock
market index fund like the S P 500 even
though I don't give Financial advice
anyway if you fancy giving a go it's
commission free it's completely free to
sign up you don't have to pay anything
you can go to trading212 it's available
on the App Store on iOS and on Android
and if you use the coupon code Ali Ali
when you sign up that will give you a
free share up to the value of 100 pounds
so you can get completely free money by
just signing up for trading 212. check
it out with a link in the video
description or search trading212 on any
of the app stores but thank you so much
trading 212 for sponsoring this video
part three common fears concerns and
questions about investing so if you're
broadly very unlikely to lose money
because Vanguard collapsed overnight but
you might lose money if the value of
your Investments goes down and this is
where people get really really worried
because they always think ah you know if
I invested my pardoned cash into these
stocks and shares what if it goes to
zero what if I lose my money now this is
a common fear and certainly let's say
you invested a thousand dollars into the
S P 500 just before the financial crash
in 2008 and then the markets crashed by
I don't know 60 or whatever it was and
so now your thousand dollars is worth
like 400 I know you're thinking oh my
God like I can't believe I've lost 60 of
my money now if at that point you sell
now you have realized the loss now
you've literally lost money because you
bought the thing for a thousand and you
sold it for 400. but if you just held on
then the market recovered over time and
by 2012 it was at the same levels and
then it was just going up and up and up
so even if you had invested lots of
money just before the 2008 financial
crisis if you had just stuck to your
guns and left that money in there you'd
be have you'd have doubled or tripled or
something your money by now because
overall the stock market broadly goes up
over a long enough time Horizon it's the
same with house prices you can buy a
house and if you try and sell it next
week then maybe the price will have gone
down but if you try and sell it 20 years
from now chances are unless your country
has been destroyed the price will have
gone up and the longer you can leave
your money in these index funds or
whatever the more it compounds over time
and as Einstein is famously put reported
to have said compound interest is the
eighth wonder of the world what are the
chances that all 500 of the biggest
companies in the US suddenly are going
to drop to zero value overnight
basically zero percent I think if all
500 of the biggest companies in the US
all have their value dropped to zero I'm
we're going to have bigger problems in
the world than the value of my stock
market portfolio and the reason why I
think it's reasonable to make the bet
that over time the stock market goes up
is because every day thousands of people
are going to work in each of these
companies every single day value is
being created by the employees at Apple
they're researching new technology
they're building new stuff they're
adding an extra camera or an extra lens
to the iPhone and all of that means that
because these people are putting in the
input of human labor you would expect
the value of the company to rise with
time because they're making more and
more cool stuff and because people are
going to want to continue to buy that
more and more of that cool stuff now
another question people sometimes have
is how much money do I need to get
started do I need to be like super rich
to start investing and the answer is no
again it depends on which platform
you're using but for example I'm trading
212 or Vanguard and Vanguard I think you
just need 100 pounds to invest trading
212 I think you can start with like 5
again this is just massively varies
depending on your country so do some
research and figure out what are the
most reputable and legit Platforms in
your country and then you can invest
based on that now there's two other
categories of stuff that I invest in I
invest in real estate so I've got a few
properties in the portfolio we're not
going to talk about that because I've
done a video about that over there
buying versus renting and that's usually
outside the range for most people until
you've already made a lot of money to be
able to afford a deposit on a house and
get a mortgage and I also invest some
amount of money in crypto yep and as we
can see here the total value of my
crypto portfolio is 200 000 but I have
actually lost 65 000 so I've put in 265k
into crypto and currently it's worth
200k what can you do I'm hoping the
price Rises with time so generally when
it comes to recommending investing in
crypto people often ask about this I
would say if you want to take the gamble
fine but make sure the only money you're
putting into your crypto account is
money that you can 100 afford to lose
don't try and think of investing in
general or crypto in particular as a get
rich quick scheme but generally if you
want to invest your money in stocks and
shares as Warren Buffett says and as I
do and as I generally recommend even
though I'm not a financial advisor not
Financial advice Etc it's pretty
reasonable to put that money in a stock
market index fund like the S P 500 for
example by the way if you're enjoying
this video so far I'd love to hear in
the comments what's been your biggest
concern about getting started with
investing what is the thing that's
holding you back part 4 fast lane
investing the alternative approach to
Building Wealth so so far we've talked
about what some people would somewhat
disparagingly called the call the slow
lane approach to Building Wealth it's
like the slow lane and this and there's
the fast lane now this is terminology
from MJ DeMarco's book of the
millionaire fast language it's actually
a really good book but the basic idea of
slow lane investing is that hey I've got
some money I'm gonna do my day job I'm
Gonna Save up 10 of my paycheck and
every month I'm gonna put 10 into my
savings account and then I'm going to
invest that money in the S P 500 and
then 50 years from now by the time I'm
65 that money will have compounded and
then I'll Be A Millionaire this is a
very very slow form of investing it's a
very slow way to build wealth and
certainly it's fine to invest in stock
market index funds I do that as well but
there is another approach to investing
and it's worth talking about that here
because when we hear investing a lot of
us just default to thinking oh I guess I
should buy stocks and shares or I guess
I need to buy a house but if we really
think about it what is the point of
investing money the point of investing
money is for your existing money to make
more money further down the line that's
all the point is the point is not to
invest in stocks and shares stocks and
shares are a vehicle by which you can
turn your money into more money further
down the line but when it comes to Fast
Lane investing fast lane investing is
basically that instead of investing in
someone else's business I.E apple or
Amazon or Google or whatever you're
investing instead in yourself and in
your own business the S P 500 goes up by
seven percent each year again on average
so if I put a thousand dollars into the
S P 500 it would be worth on average one
thousand and seventy dollars twelve
months from now and so the question
becomes can I do something better with
that thousand dollars to make more than
seventy dollars in the next 12 months
and generally the answer is hell yes
there are kind of two things I could
invest in I could invest in my own
ability to make money so for example
let's say I'm a healthcare assistant in
a hospital and I can take a course for a
hundred pounds and that course gives me
the ability to become a phlebotomist
someone who takes blood and let's say
I'm making 15 pounds an hour as a
healthcare assistant but I could be
making 25 pounds an hour as a
phlebotomist now all of a sudden I've
paid 100 pounds I've invested 100 pounds
into my own skills but I've been able to
increase my earning capacity by nearly
2X and therefore within four hours of
working as a phlebotomist I will have
paid off my hundred pound investment and
now if I work as a phlebotomist instead
of a healthcare assistant I'm now
earning more than 10 pounds an hour and
so every 10 hours of the work that I do
I'll be earning that hundred pounds back
and so my return on this hundred pounds
is way way way higher than just seven
percent because I fundamentally
increased my own value to the market
I've fundamentally increased my own
ability to make money this is why
investing in your own education is
generally a very reasonable thing to do
yes you can find out lots of stuff on
YouTube and I'm always in favor of like
hey if you're broke don't buy fancy
courses don't take out loans to buy
courses find free information on the
internet but I've got so many friends
who have an extra few thousand pounds
and they put it in the S P 500 because
they're hoping it'll grow over the next
50 years rather than just spending some
money on a weekend course on whatever
skill they want to improve and then they
can use that skill to literally make way
way more money than they would by just
sticking in the S P 500 so that's kind
of one way of Fast Lane investing you
invest in your own ability to make money
but the other way of Fast Lane investing
is by investing in your own business
obviously this only applies if you have
a business want to start a business but
generally the way to get rich quickly
quickly as in the next 10 years rather
than the next 70 years is to build your
own business to own your own business
and to increase the value of that
business rather than giving your money
to Apple or to Tesla so for example if I
wanted to I could start my own coffee
shop or my own online business or my own
YouTube channel which is a business if I
wanted to I could start my own web
design agency or social media marketing
agency if I wanted to I could learn how
to code and I could build software and I
could turn it into an app I back myself
to be able to make a business and teach
myself the basics of how to run that
business and make that business more
valuable in terms of return percentage
then the seven percent I would get in
the S P 500 and when I interviewed Alex
for Mosey who's like a 200 million
dollar entrepreneur he call he kind of
calls it in investing in the s p versus
investing in the sne it's a whole S P
500 versus SME 500 but like you will get
a significantly higher return investing
in your own ability to make make money
then you will in any any market and his
advice as well is that you should invest
in the sne you should invest in yourself
invest in your own skills invest in your
own ability to make money invest in your
own business because the Returns on that
are way more likely to be ridiculously
higher than just that crappy seven
percent that you get by investing in the
S P 500 so if for example you are
interested in investing in your own
education and you want to start a
YouTube channel and really take it
seriously and treat it like a business
you might like to check out my own
course part-time YouTuber Academy it's
great people love it it's good vibes
that'll be linked down below and that
course is basically about teaching you
the things you need to know to systemize
and scale a YouTube channel if you want
to treat it like a business it's not a
course for people who want to do it as a
hobby but if like me you want to turn
your channel into a business and make
money that way that's a course that
might help you but of course everything
is available on YouTube for free as well
so if you're broke or if you have loads
of time and not much money then of
course you can find all this information
for free on the internet anyway I hope
you found this video useful if you're
interested in learning more about this
fast lane investing approach to Building
Wealth you should check out this video
here which is my book review of the
millionaire fast lane by MJ DeMarco
which is the best book I've ever read on
how to make money in a quick fashion
quick meaning in the next 10 years
rather than the next 60 years so check
out that video over there thank you so
much for watching and I'll see you
hopefully in the next video
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