9 Investing Habits That Made Me $600,000 by 24

Summary

In this video, the creator shares the nine key investing habits that helped them amass over $600,000 by the age of 24. From automating finances to minimizing emotional reactions to market fluctuations, the habits emphasize consistency, simplicity, and long-term thinking. The creator highlights the importance of boring, diversified investments like index funds, while also taking calculated risks with individual stocks. They also stress the value of increasing income and learning from experts. Ultimately, it's about making smart, consistent choices that lead to sustainable wealth growth.

Takeaways

• 😀 Automate your finances: Set up automatic transfers to emergency funds, investments, and bills to eliminate the temptation to spend and ensure consistency in saving.
• 😀 Limit portfolio checks: Avoid the emotional rollercoaster of daily market fluctuations by checking your investments only a couple of times a month.
• 😀 Invest in boring, steady options: Index funds and ETFs provide solid, long-term returns without requiring active management or constant analysis.
• 😀 Take calculated risks: While 75% of the portfolio should be in boring investments, don't shy away from taking high-risk, high-reward bets with the remaining 25%.
• 😀 Ignore distractions: The financial world will always present new 'hype' stocks, but staying focused on your strategy and avoiding the distractions is key to long-term success.
• 😀 Learn from others: Invest in your knowledge by learning from people who are smarter or more experienced, like successful YouTubers or financial experts.
• 😀 Make investing your priority: When you earn money, think about how much you can invest, not just how much you can spend. This mindset will help build wealth in the long run.
• 😀 Invest during all-time highs: Consistently investing, even during market peaks, is better than trying to time the market. Dollar-cost averaging ensures steady growth.
• 😀 Don't rely on one income: Diversify your sources of income—work multiple jobs, side hustles, and businesses—so you can invest more and build wealth faster.
• 😀 Focus on both saving and earning: Saving a high percentage of your income is important, but increasing your income through additional streams accelerates wealth-building.

Q & A

What is the most important investing habit discussed in the video?

The most important investing habit discussed is automating everything. This habit helps to bypass the psychological temptation to spend money and ensures consistent investing without requiring daily decision-making.

Why does the speaker check their portfolio so infrequently?

The speaker checks their portfolio only once or twice a month, or even less, because investing is more emotional than logical. Regularly monitoring a portfolio can lead to panic during market fluctuations, prompting emotional decisions that may harm long-term investment goals.

What types of investments does the speaker primarily recommend for beginners?

The speaker recommends starting with boring, hands-off investments like index funds and ETFs. These investments are diversified, track market indexes like the S&P 500, and offer steady returns without requiring much research or active management.

Why does the speaker take some risky investments despite focusing on boring investments?

The speaker takes some risky investments (like individual stocks and AI companies) because they are young and can afford to take on risk. These higher-risk plays represent 25% of the portfolio, which allows for the possibility of higher returns while maintaining a solid foundation with index funds and ETFs.

What does the speaker mean by 'ignore the women in the red dress'?

The phrase refers to distractions in the investing world, like the constant hype around the next big thing (e.g., hot stocks, crypto, or AI). The speaker suggests ignoring these distractions and focusing on investments they understand and believe in for the long term, avoiding 'get rich quick' schemes.

How does the speaker use the idea of 'standing on the shoulders of giants' in their investment strategy?

The speaker adopts the philosophy of learning from those who have more experience, like watching YouTube videos from established financial experts. This approach helps them avoid reinventing the wheel and accelerates their learning process, allowing them to make more informed investment decisions.

Why does the speaker prioritize investing over spending on material items?

The speaker views investing as a long-term game and enjoys watching their money grow. They prioritize investing over buying expensive material goods, focusing on things that contribute to their health and well-being, such as a gym membership, travel, and experiences, rather than luxury items.

What is the speaker’s approach to investing during market all-time highs?

The speaker advocates for investing during all-time highs, as trying to time the market perfectly is a losing game. Instead, they use dollar-cost averaging, consistently investing regardless of market conditions. This approach ensures they don’t miss out on gains while avoiding the pitfalls of trying to predict market movements.

How did the speaker increase their ability to invest at a young age?

The speaker didn’t rely on a single income source. They worked multiple jobs and side hustles to increase their income. Over time, they built businesses that provided leverage, allowing them to invest larger sums of money, despite their initial limited income.

What is the significance of multiple income sources in the speaker’s wealth-building strategy?

The speaker emphasizes that focusing on increasing income is just as important as saving and investing. By having multiple streams of income, they could invest more and build wealth faster. Their strategy was to maintain a high percentage of income going into investments, which became more substantial as their income grew.