How Much Money Should I Invest - Stock Market Dividends

hey guys Andre here and welcome back to another exciting video and today is a very exciting video because one of the most commonly asked questions I get is how much money should I invest Andre I have $10 should I invest it is that enough so if you watch this video all the way through we're going to explore exactly how much money you need to save how much money you need to invest and the information that is contained within this video really changed the course of my life that's what we're going to talk about today so let's get into it [Music] so the best part about this video is that this contains a universal truth and no matter how much money you make no matter where you live in the world and no matter what platform you use to invest your money it is all the same so whether you use Robin Hood like I do or maybe you use M one finance or weeble or each trade or a lie or Charles Schwab Schwab I don't know why that's funny to me or maybe you're into real estate it does not matter whether you're from the good ol US of A or from Mother Russia like I was the same applies to everyone but before we get into it I want to show you a quick little video that reveals some common facts about the average American lifestyle spoiler alert it's kind of scary right now 69% of Americans have less than $1,000 in savings and 34% have no savings at all so right now two out of every three Americans have less than $1,000 saved imagine walking into any given room at any given time here in the States and seeing that two-thirds of that room has less than $1,000 to their name and the third have zero dollars saved up there are one paycheck away from going bankrupt but how many people do you guys know because I know of quite a few and some of which are my friends where they always seem like they're doing so well they always have the latest iPhone they're always keeping up with everything maybe they just bought a Tesla they're going on vacations it's like they're living secret lives that I don't know about why is that the consumerism culture is harmful it really hurts people we are spending money we don't have to buy things we don't need to impress people we don't even know so the clips you just saw we're from a documentary called playing with fire which I'm going to see tomorrow in theaters I'm super pumped about it and step number one is to get out of this spend mentality as quick as humanly possible fire by the way is an acronym for finance insurance and real estate so it is also more commonly known as something else and that is this new phenomenon that's kind of taken my generation by storm and it's what really inspired me to get started into this whole YouTube thing into the finance game about ten years ago and it stands for financial independence retire early let's talk about that word for a second though because I hate the word retirement every time someone says it I just picture Clint Eastwood just hanging out on a porch with nothing to do on an old wooden rocking chair just waiting to die like every time I ask hey would you want to retire early like no I just want to continue doing what I love and be young like it's a perfectly reasonable answer but I am a perfect example of this because I do on this channel something called cardistry and magic you might have seen some of my videos where I teach this stuff and I love doing it for people I love connecting with strangers and giving this mystery and as this aw and you know it's such a cool art form because I get to connect with people in a real way so much of our conversations day to day is like hey uh weather's pretty good it's hot right yeah how's work it's good yeah me too like that's what we talked about and magic gives us in they really let you into their life and they tell you their biggest secret so I love that but I would be lying if I said that there are days where I wouldn't even touch a deck of cards like I would look at cards and just mmm you don't wait for me and this is my passion since I've been nine years old so it's always good to have a back-up plan and always good to have options that's the whole thing so I guess what I'm saying at the end the day is let's rename the whole retirement thing and let's just keep it at fire let's get fired up I'm fired up I hope you get fired from your job I'm kidding they also call it Phi which I also hate I don't know why I don't like Phi it's like hey you Phi what'd you call me I asked are you Phi no I'm not bothers me alright I'm done with the word let's let's move on so without further ado let's get to the shockingly simple math behind early retirement now I'd like to thank mister money mustache I borrowed so much of this stuff from his blog I'll leave all the links in the and below the video where you guys can go check it out but stick around to the end of some of these examples because they're really gonna blow your mind so let's keep this simple and assume that you make $1000 a month just for simplicity sake which is depressingly somewhat accurate and close to what my YouTube is making per month but beside the point so let's let's assume this you make a $1000 you make $1000 really $1000 per month that's your income right here and from that $1000 you save just 5% so from that that is $50 a month and then you take that $50 and you invest it into something like let's say something like what I'm doing with dividends every Monday where I buy a stock you're gonna invest that into a 4% asset that is going to take you 66 years I'll have to write it down but I'm going to because it makes me sound and feel like a real pro 66 years to retire which is basically never you aren't going to work until you are old gray and wrinkly before you can retire which by then you might not even get on Social Security because it might not even be around by then so that's how long it's gonna take at a 5% savings right now the depressing part about this is that this scenario is the one that is most commonly representative of the average American lifestyle that's unfortunate but let's bump it up now to 10% so now that your savings rate is 10% you are saving and investing $100 a month into the same 4% asset so that $100 a month is going to get you there in about 51 years which still is a long time but that shaved 15 years off of your retirement but I mean 51 years is still still a long life so let's bump up that savings rate because we're frugal and let's go all the way to what's my next what's my next thing I don't script my videos what were you talking about so now you're saving 15 percent of your paycheck which is getting better and at 15 percent you are saving $150 a month and investing it and in that $150 a month is going to get you to your retirement in about 43 years so we're getting there we're picking up some pace but let's increase it now to 20 percent which is a fifth of your income so in the $1,000 a month case 20% would be $200 so that is now $200 a month we are saving investing and that will get you there in about 37 years so 37 years now we're getting there 37 is a little bit a little bit better right but now let's really really crank it up to about a third let's do a third now which is 30% this is where we're kind of getting more serious now a third is something really to aim for so now 30% which is a third to $350 a month you're investing on 4% now how much is that going to take in about 25 years it looks like a 3-2 to 25 years so I mean 25 years that's that's doable 25 years if you can save 30 percent of your income 30 percent is pretty admirable but what you really want to aim for is 50 percent or more so let's change that up to now 50 percent of your income you're gonna save five hundred dollars and invest it every single month and that will put you at an early retirement date in about 17 years that's uh that's a really good time 17 years you can work a job maybe that you don't really like much 17 years now roughly 500 dollars a month is what my portfolio is generating right now with which is what I'm investing about $500 a month which does not mean it's gonna take me 17 years because my my spending might be higher than that or might be lower whatever it is my spending is actually my spending is not that much higher than this believe it or not right now I try to keep it lean try to keep it low no car you know what I'm saying you know what I'm saying now just for fun let's really really increase that number now to something like 65 percent 65 percent this is really crazy because 65 percent savings rate is going to get you there in roughly 10 years that is a very short time horizon so I'm looking at you guys who are earning $100,000 a year or more if you guys can save 65 percent of your income especially if you're a couple and you guys are dual income saving 65 percent is gonna get you there in just 10 years assuming that you can resist the urge of buying fancy things to show society how successful you've become now before I get hate mail telling me that and you know we're talking about you just all about trading options Tesla Bitcoin um so before we get into that here's just some of the assumptions that I made the assumption that I made is that you guys can make 5% returns after inflation which the stock market has historically done and that your investments are paying you at four percent per month like for example my dividend stock portfolio is paying me at four percent and the last assumption that I made is that the money that you guys have invested and that you're withdrawing from will last forever so you heard that right that money should never ever run out so you can use that and think of it as like a safety margin so to speak so if you imagine this money really never gets to run out it's like imagine a tree right and it's growing at a really quick rate and as you're chopping it down you're just cutting some of the wood you can't actually chop the whole tree down because it's growing faster than you can get to it that's the really best analogy that I can come up with but if you guys can come up with a better one I'm all ears I'm all eyes because I gotta read the comments but that's kind of how it works and here is a crazy mind-blowing part that personally took me a while to kind of grasp and understand the stuff that I showed you guys on the whiteboard that stuff applies no matter what your income is no matter how much money you make so in this example that person is making twelve thousand dollars a year well that is the same for him then it is someone who's making a million dollars a year or ten million dollars a year the numbers are all relative which is kind of crazy if you think about it so if you're able to save more money you'll get there quicker so that's why you know when I meet my fellow millionaires such as I say fellow millionaires as if I'm one of them I'm not quite there yet but I'm not always impressed by by people who are seemingly wealthy and that's because when you reach a certain level or a threshold of income you start to get bored with life a little bit right like what do you do to spice things up what's life without a few Ferraris and a few Tesla's in a in a nice big mansion house well what's interesting about that is the stuff that they own ends up at the end of the day owning them and if they were to leave their business or leave job whatever leave job in Russian now so if they leave the job that they're in whatever they're making they would go bankrupt just as quickly as any normal average person who's making let's say fifty thousand dollars a year it would it's all relative and so what's impressive to me is somebody who doesn't live inside of a cage because if you assume that we all live in these cages called jobs then you know the person who's wealthy and seems like they've got everything they also live in a cage it's just their cage might be you know a little more glittery a little bit prettier and shinier than yours but nonetheless the fact is they also live in a cage what's impressive is somebody who doesn't live in a cage and is not bound by any of those things so that's what my goal is in life is to not be bound by that stuff and the quickest way to do it is not by increasing your income like I mentioned in in some of the videos that I do but rather by saving your income and cutting costs because not only do you have more money now to save and invest but also you need less money in the future to actually invest so it has a double positive effect so those are just some of the things that I think are kind of important that have blown my mind so lastly I will leave you guys with this fun fact if you smash the like button and subscribe and hit the bell notification you too will help this poor young boy grow his YouTube channel into a massive massive thing that helps people all over the world become wealthy by saving money and being awesome so thank you guys so much for watching I'll see you guys very soon peace out Shh no I got no pants on gosh [Music]

Channel: Andrei Jikh

Views: 694,510

Rating: 4.937654 out of 5

Keywords: dividend stocks, dividends, how much money, investing, stock market, saving money, investing money, robinhood, robinhood app, m1 finance, webull, passive income, stock portfolio, how much, money management, andrei jikh, ppcian, graham stephan, real estate investing

Id: yMq8yVqs4Zg

Length: 14min 18sec (858 seconds)

Published: Mon Jul 01 2019