I studied money for 6 months. It changed the life of my future grandkids.

Summary

In this video, the speaker shares five crucial lessons about money management. They emphasize that cash is no longer king due to inflation and suggest keeping a small percentage in cash while investing the rest. They also advocate for believing in the stock market's long-term potential, investing in stable options like US government bonds, understanding the value of cryptocurrency, and reconsidering real estate as the best investment choice. The speaker concludes by urging viewers to preserve the value of their money through smart investments.

Takeaways

• 😀 Cash is not King: Inflation erodes its value over time, losing about 3% annually. It's important to balance cash with investments.
• 😀 Invest in the stock market: Historically, the stock market has provided an average return of 10% per year. Despite volatility, long-term investments typically recover.
• 😀 Don’t panic during market downturns: Stock market corrections are normal, and selling in a panic can hurt long-term gains.
• 😀 Bonds provide stability: US government bonds offer predictable returns that can beat inflation, making them a steady and reliable investment.
• 😀 Crypto is not a scam: While volatile, cryptocurrencies like Bitcoin represent a new and important technology with a $3 trillion market, providing significant investment potential.
• 😀 Understand cryptocurrency technology: Beyond the market fluctuations, the blockchain technology behind crypto is valuable for digital asset management.
• 😀 Real estate is not always the best investment: While buying a home is great, real estate might not be the best way to invest your money due to market volatility and the complexity of owning physical property.
• 😀 Real estate alternatives: Consider Real Estate Investment Trusts (REITs) or ETFs to invest in real estate without owning physical property.
• 😀 Diversify your portfolio: A mix of cash, stocks, bonds, crypto, and real estate (via REITs or ETFs) can help balance risk and return.
• 😀 Money should work for you: Cash alone won't preserve wealth; investments in diverse markets are key to growing and preserving value over time.

Q & A

Why is cash not considered King according to the script?

Cash is not considered King because it loses value over time due to inflation. On average, cash loses 3% of its value every year due to inflation in the United States, which is why it is important to invest money to preserve and grow its value.

What percentage of the speaker's money is in cash versus investments?

The speaker keeps 10% of their money in cash and 90% in investments. This ratio reflects their belief in using investments to grow wealth rather than holding cash, which loses value over time.

Why should people believe in the stock market, according to the speaker?

The speaker believes in the stock market because, over the long term, it has historically provided an average annual return of 10%. Despite short-term volatility, the market tends to recover and grow, making it a good option for long-term investing.

What advice does the speaker offer for handling market downturns?

The speaker advises not to panic or sell during market downturns. It's important to trust the data and the long-term upward trend of the stock market, even if short-term corrections occur.

Are all investments risky according to the speaker?

No, not all investments are risky. The speaker highlights US government bonds as an example of a stable, less risky investment. Bonds provide steady, predictable returns and can help beat inflation, making them a safer alternative to cash.

Why does the speaker consider crypto not to be a scam?

The speaker considers crypto to be legitimate because of its underlying technology, which they believe will become widely used in the future. Despite its volatility, the size and potential of the crypto market (over $3 trillion) cannot be ignored.

What is the significance of the size of the crypto market?

The size of the crypto market, which is over $3 trillion, makes it an important sector in global finance. The speaker argues that the market's size and the growing use of cryptocurrency make it impossible to ignore as an investment opportunity.

Does the speaker believe that real estate is the best investment?

No, the speaker does not believe real estate is the best investment for everyone. While they acknowledge the benefits of owning property, they suggest that there are other opportunities in the market, such as REITs and ETFs, which allow investment in real estate without buying physical properties.

What alternatives does the speaker suggest for those interested in real estate investment?

The speaker suggests investing in Real Estate Investment Trusts (REITs) and Exchange-Traded Funds (ETFs) as alternatives to directly purchasing physical real estate. These allow for real estate exposure without the need for large capital or managing properties.

What is the key lesson the speaker wants viewers to remember?

The key lesson the speaker wants viewers to remember is that cash is no longer King because it loses value over time due to inflation. To preserve and grow wealth, it's important to make money work for you through investments.