How To Invest For Beginners (starting with $100)

Summary

In this video, Mark shares his journey from a $100 investment to multimillionaire status and simplifies the investing process for beginners. He explores various investment options, starting from low-risk savings accounts to high-risk lotto, including gold, index funds, REITs, and individual stocks. Mark also humorously tests the 'monkey-dart' theory with stocks and invests in Bitcoin, emphasizing the importance of risk tolerance and potential rewards.

Takeaways

• 💼 Investing with a small amount like $100 is possible and can be a stepping stone to growing wealth.
• 📚 Investing in yourself by acquiring knowledge and skills is a valuable initial step.
• 💰 High-interest savings accounts offer a low-risk option to start investing and build an emergency fund.
• 🏦 Banks like Ally Bank, Marcus by Goldman Sachs, and Citibank are recommended for their good interest rates.
• 🔒 Gold is considered a safe haven and can protect the value of your money against inflation.
• 🌐 Investing in gold through broker apps like Robinhood or Trading 212 allows you to buy at its true value.
• 📈 Low-cost index funds can provide significant returns over the long term due to compound interest.
• 💹 An index fund works like a bag of assorted candies, offering a mix of popular companies in one investment.
• 🏢 REITs allow you to invest in income-generating properties by buying shares, similar to owning a part of a property.
• 🛍 Buying and selling items you're knowledgeable about can yield high returns depending on your expertise.
• 📊 Individual stocks can be risky but offer the potential for high rewards if you do your research.
• 🚀 Cryptocurrency is highly speculative and volatile but has the potential for massive returns.
• 🎰 Lottery tickets represent a high-risk gamble with very low odds of winning and are not recommended as an investment.

Q & A

What is the main theme of the video?

The main theme of the video is to simplify the process of investing for beginners with $100 and to explore various investment options with increasing levels of risk and potential rewards.

Why does the speaker say investing can be intimidating for beginners?

The speaker says investing can be intimidating for beginners because there is a lack of financial education in schools, making the process seem scary and overwhelming for those who are just starting.

What is the first investment option mentioned in the video?

The first investment option mentioned is a high interest savings account, which is considered the lowest possible risk investment.

What is the purpose of creating an emergency fund according to the video?

The purpose of creating an emergency fund is to have money accessible for unexpected expenses, which can help avoid getting into debt and paying high fees for things like payday loans.

What are the two factors the speaker considers when looking for a good savings account?

The speaker considers a good interest rate and the ability to access the money instantly as the two important factors when looking for a good savings account.

How does the speaker view gold as an investment?

The speaker views gold as a safe haven investment with a risk level of two out of ten. It is suggested as a way to protect the value of money against inflation.

What is an ETF and how does it relate to gold investment in the video?

An ETF, or Exchange-Traded Fund, is a type of security that involves a collection of securities such as stocks or gold. In the video, the speaker mentions investing in the GLD ETF on Robinhood as a way to invest in gold at its true value.

What is the potential long-term benefit of investing in a low-cost index fund as mentioned in the video?

The potential long-term benefit of investing in a low-cost index fund, as mentioned in the video, is the power of compound interest, where an investment of $100 per month could grow to $123,000 over 30 years with a 7% annual return.

What is a REIT and how does it work?

A REIT, or Real Estate Investment Trust, allows individuals to invest in income-producing real estate properties without having to buy the property outright. It works by pooling money from multiple investors to purchase properties and then distributing the rental income to the investors.

What is the risk level of buying and selling items as an investment according to the video?

The risk level of buying and selling items as an investment varies and depends on the individual's ability to find good deals, but the speaker assigns it a risk level of four out of ten.

What is the speaker's approach to investing in individual stocks in the video?

The speaker uses a playful approach to investing in individual stocks by randomly selecting stocks using a dartboard, but also mentions that fundamental analysis, looking at financial statements, market conditions, and company leadership, can be a more strategic approach.

How does the speaker describe the risk level of investing in cryptocurrency?

The speaker describes the risk level of investing in cryptocurrency as very high, giving it a nine out of ten on the risk scale due to its extreme volatility and potential for both high returns and significant losses.

What is the final investment option discussed in the video and why is it considered a gamble?

The final investment option discussed is the lotto, which is considered a gamble and carries a ten out of ten risk level because the odds of winning are extremely low, and it is more based on luck than investment strategy.