How to Invest as a Teenager

usually when you're young you are a time billionaire i.e you have loads and loads of time but not much money and then as we get older we get more and more money but we have less and less time and more and more responsibilities so in this episode of money club the ongoing series where we discuss the principles strategies and tools that can help us along our share journey towards financial independence we're gonna go over the top five ways to invest your money and also the top 10 ways to invest your time that i would do if i were a teenager all over again part one investing your money now the first most important point when you're saving money when you're young is please don't try and save too much i know it sounds counterintuitive everyone says you should be saving money all that kind of stuff but you definitely don't want to be getting to the point where you are sacrificing fun experiences for the sake of having an extra few dollars in your bank account like for example let's say you're a teenager and you're living in the uk or the u.s if you have 50 or 50 pounds that actually goes pretty far it's going to be a big percentage of your monthly income whether that's from a part-time job or from gifts and things like that and you can use that 50 pounds for a bunch of fun things like hanging out with your friends or going to the cinema or even going on dates or going on cool experiences going backpacking there's lots of stuff you can do with that money now the reason why we shouldn't save too much as teenagers is because as we get older our earning power is only going to go higher and higher and because we're going to have loads more money coming in that extra 50 pounds is gonna seem like a drop in the ocean compared to the money we actually make through having a proper full-time job and really as we get older our happiness from spending the same amount of money decreases significantly over time so if you think about 10 years from now it really won't matter to your future self whether you saved that 50 pounds but the experience that you might have gone through hanging out with your friends rather than thinking i need to save this 50 pounds would have added to your bank of experiences just generally for a happier life so really when you're a teenager it's important to keep in mind that the best thing you can do for your future self isn't really to save that money but it is to spend that money on cool experiences that you can then look back on in your memory bank right so having said that point number two is that you should probably try and open an investment account this is basically like a savings account but if you put money into it it lets you then invest it in the stock market in stocks and shares now i've got a whole separate half an hour long video which is all about an introduction to investing in the stock market so we're not going to go over all the basics over here but that'll be linked up there over there and down in the video description if you want more of a primer about why and how you should be investing in the stock market now for example in countries like the uk and the us you do have to be over 18 to invest in the stock market as an individual and so what you need to do is you need to ask your parents or your guardian or whatever to open up some kind of investment account for you like junior isis like they call in the uk or custodial joint accounts that they're called in the us it's going to vary depending on which country you're in now the point of opening one of these investing accounts when you're a teenager is not that you're plowing all your savings into it so that your stock market money can go up really the whole point of opening an investing account is so that you know what the process is like of actually putting money into stocks and shares there are so many people i know who are in their sort of late 20s making good money but have never invested in the stock market because it's always seemed like a mental barrier it's like oh it seems so hard and if they'd started doing it at a younger age you know even putting five dollars in here and there it just removes that mental emotional barrier from putting money into the stock market so that's really the point of doing this when you're young rather than thinking hey the point is to make loads of money over time right so once you've got your investment account point number three is that you want to invest some small amount of money in index funds again i speak much more about index funds in my more detailed video about investing but essentially when you buy an index fund like for example the ftse 100 you are investing some amount of money in the top 100 companies in the uk or if you buy the index fund the s p 500 you are investing a little bit of money in the top 500 companies in the us all in one go for most normal people this is way better than trying to pick individual stocks like instead of saying oh i reckon tesla's going to go up i reckon disney's going to go up because i like watching disney plus or whatever you just diversify your money by splitting it between these top 500 companies now again the point is not that that 10 that you're investing in the stock market is going to compound over time and make you millions further down the line you know it will compound and that is a good thing but it's negligible compared to the amount of money you are going to be putting into investments as you start earning real money but the whole point is that it just gets you familiar with the experience it gets you into that investor mindset of when you have spare cash thinking you know what i can just chuck it into the s p500 i can chuck it into an index fund and not think anything of it whereas if you wait until you're 25 to do that it's going to be a big mental and emotional hurdle so you should get over that hurdle when you're a teenager so we're investing some of our money into index funds i'd recommend we also invest a little bit of our money into crypto yes crypto crypto these days really interesting asset class interesting to learn about interesting to follow if you want to educate yourself about crypto there are loads of channels here that do that i've got a video up there which is a basic introduction to bitcoin there's a chap called packing mccormick who has a really really good email newsletter called not boring that'll be linked down below which is a great primer on all things related to crypto and again i'm not saying put loads of money into crypto because you might lose it because it's still a fairly high risk investment what i'm saying is put a little bit of money into it make an account on coinbase link down below verify your id all of that jazz make an account in whatever crypto brokerage platform exists in your country that is safe and reputable and put a few dollars in here and there into something like bitcoin or something like ethereum i'm about 50 50 split between bitcoin and ethereum i don't really bother with like the alt coins or anything like that i'm not a very sophisticated crypto investor but i think it's sufficiently interesting that i put some amount of my kind of savings and my net worth into crypto and again the point is not that suddenly you're going to become a crypto billionaire and kind of money goes to the moon it's more that you get an idea of what it's like to invest in this asset class and you educate yourself more about what it's actually like to invest in crypto and all the stuff around web3 and really there's nothing like actually having skin in the game and actually having money invested into something like bitcoin and ethereum to really encourage you to explore it and take it seriously and really the educational value of investing in crypto is why i'd recommend it for teenagers rather than money going to the moon or anything like that finally if you still have a little bit of spare cash left after actually spending money on experiences and hanging out with your friends and stuff i would recommend that you invest some amount of money into books or learning of some capacity now to be honest when you're a teenager you probably know that you don't necessarily need to pay for a lot of things there are ways to get books basically any book under the sun for free on the internet and you probably don't need me to tell you that similarly software similarly courses now i'm going to hold my hands up and say that when i was a teenager i was a bit of a bad boy i'm not going to lie i actually did pirate adobe photoshop back in the day i'm not proud of it but i now pay full price for it and actually our team pays thousands of dollars a year to adobe these days i also when i was 17 so 10 years ago almost 11 years ago now uh pirated my first copy of the four hour work week by tim ferriss come on you're killing me here which was the book that most changed my life since then i have supported all of the stuff that tim does to his sponsors and stuff so i feel less bad about it but hey you know just saying probably not morally good but you know you can you can make your own decision on that front alternatively you can go to libraries to get things like libraries are these incredible inventions where they just have books available completely for free that you can just like read and that's amazing because then you can read books about like business and learning and entrepreneurship and all that kind of stuff that will help you out further in life if that's the route you want to go but investing some amount of your money into learning would generally be a good idea part two investing your time alright so let's talk about 10 different things that you can invest your time into when you're young when you're young you generally have loads of free time and not much money so really investing money is like a bit of a side hustle investing time is really where you can make decisions that move the needle for your future life if that's the sort of thing you're into and tip number one is to build a fast lane mindset and you should read this book the millionaire fastlane if you don't want to read the book eh you should but i have got a video about it up there and i'll link to the short form book summary of the book which is also pretty good and i'll link that down in the video description but basically the book talks about and genuinely it's sick it's one of my favorite books about making money of all time so 100 would recommend reading this if you're a teenager or even if you're not and one thing he says in the book is that get rich quick is not necessarily a bad thing because get rich quick is what we're trying to do quick meaning in under 10 years get rich easy is the thing that is non-existent and anytime someone is promising you a path or a course or anything to get rich easy they are trying to scam you because there is nothing to that there is no easy way to get rich but there are quicker ways to get rich than others and they generally involve building a business so you can read the book you can educate yourself about the idea and kind of start thinking instead of this slow lane approach of get a good job go to university blah blah blah blah retire at 65 try and think more around what can you do to build wealth in the short term by building some kind of business that provides large amounts of value to lots of people at scale tip number two for investing your time when you're young is to learn useful and in-demand skills now even today learning to code is still one of the best skills that you can have i had dinner with a chap yesterday who learned to code did a computer science degree at university in fairness and now he's earning 750 000 a year as like a 27 year old working for some tech company in the bay area it's absolutely absurd how much money software developers are making these days i even know people who didn't go to university i've got a friend who left school at the age of 18 didn't go to university taught himself how to code using the internet and then got a job as a software developer within a year of actually teaching himself how to code and i think was making 80k a year as his first salary and that's just kind of slowly grown over time as well and especially with all the stuff around web3 booming these days like being able to code in something like solidity or being able to program stuff for the fear in blockchain or solana or polygon or all these other things that i don't particularly understand if you can actually get into that world and it's not that hard there's free tutorials on the internet there's youtube channels dedicated to this sort of stuff if you can teach yourself that stuff that is a skill that's ridiculously high in demand and you can use it to either build your own thing your own little startup your own product your own web3 company or you can be hired to someone else's thing or you can join an early stage startup there's so many options if you learn how to code and honestly if i was if i was young in fact if i didn't have this youtube channel i would be spending all of my time basically you know even at the age of 28 learning how to code in solidity and becoming a web 3 developer but i've got this youtube channel so that i'm i'm more of a media person than a code person these days tip number three for investing your time as a teenager is to document your learning and your journey in some capacity and the easiest way to do this is through writing so this can be through a blog or through posting on twitter or writing on medium or writing a newsletter on substance there are all sorts of different platforms where you can document stuff through writing but this is good for two reasons number one it helps build the craft of writing and being able to communicate well through written language is also an incredibly valuable skill that makes you ridiculously valuable in the job market that also makes anything that you start any business that you do more likely to succeed because now you're able to communicate whether it's writing copy for your landing page or writing sales page stuff or even sending emails just being able to write competently and in a nice way is a huge competitive advantage but the second reason why documenting your stuff is good is because it's really nice to look back upon like i've read so many books like probably hundreds of books in my time so far a lot of them when i was a teenager and a lot of them really changed kind of the way that i was thinking but because no one told me i should start a blog back then or like document it in some capacity all of those like learnings all of those experiences all those memories are sort of lost in the void of my brain and as we know the brain is not a great device actually recalling stuff because memories fade over time all that kind of fun stuff so documenting your journey is good for your own personal memory bank but there's a third reason i forgot there were three a third reason why it's kind of helpful as well and that's that you might well build an audience of people who are interested in the stuff that you're sharing it's pretty unlikely unless you really take it seriously it's not something that like happens by accident most people who do it well are very intentional about it but there's definitely the scope to then potentially build an audience of people who really enjoy your writing and even if you're a teenager even if you're 13 14 15 like whatever there are probably people out there in the world who would be interested in reading about the stuff that you're sharing especially if it's about documenting your journey through entrepreneurship or through learning cool things anything like that so that was the world of writing but if you're interested in potentially making videos maybe starting a youtube channel maybe doing a tick tock maybe posting stuff on instagram youtube is still pretty sick that brings us to tip number four which is to learn about video production again this is one of those ridiculously valuable skills that all companies are now on the lookout for every startup i know is trying to do some kind of content marketing play and so if you can educate yourself around cameras how to use a camera how to talk to a camera potentially how to edit videos stuff like that you again have a massive competitive advantage if you are looking for one of these jobs in in the future or also if you're trying to promote your own thing which you might want to do at some point further down the line and if you don't already have these skills the best way of picking them up is by actually taking my own course on skillshare which is called youtube for beginners uh skillshare are very kindly sponsoring this video so thank you skillshare for that but i've got about 12 classes on skillshare and there's this new one that i've just released called youtube for beginners and that class is about four hours long i think there's about 30 lessons in it and it takes you step by step through how to actually build a youtube channel from scratch starting with like the concept how do you talk to how to talk to camera how to set up a camera how to edit videos how to do thumbnails all of that stuff and that is a great introduction to all of the skills required to be a youtuber which are all the skills required to do the video production thing well now the reason this is in investing your time rather than money is because if you are one of the first thousand people to hit the link in the video description then you will get a free trial to skillshare for a whole month and in that month you can take whatever classes on skillshare you want so you can take all of my classes i've got like 10 12 classes on there now there's absolutely loads you can take my youtube for beginners class you can take my how to edit videos in final cut pro class if you want to learn more about video editing you can even take my three productivity master classes where i share everything i've learned over the last five years around how to be more productive and how to get more out of your time and on top of that there are thousands of other classes on skillshare covering all sorts of topics from business entrepreneurship like productivity interior design cooking everything under the sun there is a class for it on skillshare so if that sums up your stream then do hit the link in the video description sign up for a free trial take my classes i think they're really good and learn about this video production stuff because it really will add value to your life in a really solid way i hope if you're investing your time well so thank you very much skillshare for sponsoring this video and let's now move on to tip number five which is to become money literate and this basically involves investing your time in learning and reading and watching videos about money to become more money literate and to educate yourself about this thing that's quite important to how we live our lives and how society runs we've already talked about the millionaire fast lane which is the best book i'd recommend on how to make more money next we have die with zero which is kind of interesting around how to spend money if you're interested in a sort of philosophical take on the topic we have the four-hour work week which i've long talked about as being the single book that most changed my life and treated the way i approach my life and retirement and business and all that kind of fun stuff we've got your money or your life which changed the way that i approach my career she's makes like vicky robbins make some really interesting arguments in it i actually have a book club video about it actually i have a book club video about a lot of these they'll all be linked in the video description if you want to check them out if you don't necessarily want to read the books and finally we have the psychology of money by morgan housel which is generally a way to become more financially literate and to understand the emotional and often irrational mindsets and thought processes that govern our approach to how we spend money and i've also got a book club episode about that linked up there and down there if you want to check those ones out it's not just books if for whatever reason you're unable to read there are also loads of youtube channels that talk about money in a really nice way graeme stefan and andre jick are some of my personal favorites but now let's move on to the second half of the tips on how to invest your time and this is investing your time in gaining experiences and so tip number six here is to get some kind of job or gain some kind of work experience this is really helpful a generally getting a real job or some kind of work experience or a part-time job makes you some amount of money i used to work for four pounds an hour or five dollars an hour teaching maths to people when i was younger and it doesn't really matter what you do the point is having that job gives you the an idea of like oh okay this is what it's like to actually spend some of my life energy to give some of my time to this thing and to get money in return and you also learn a few skills along the way like how to deal with colleagues and co-workers and how to have conversations with your manager and these are generally skills that are very useful further down in life as well tip number two that i would say is to potentially do or make things for people that you admire completely for free this is the idea of being a permissionless apprentice for example let's say that you admire an author or a youtuber or a tick tocker or something if there is a way that you can create something for that person maybe you take one of their videos and turn it into a tweet thread maybe you take one of their tick tocks and you turn it into a little nice infographic poster type thing hey that helps you develop your own skills in using photoshop and doing graphic design in writing and all these other skills that are quite useful b it also helps you develop those skills in a kind of fun way because now you have a tangible output and you're actually potentially helping someone and c it might even get you noticed by that person there are a handful of people who for example with me over the years have been very very helpful in for example we hired a guy recently to turn one of my tweet threads into this really cool visual graphic-y type thing and we hired him because we just saw his work on twitter where he was doing this for other people for free and we're like damn this guy's really good so we paid him a bunch of money to do this graphic and that graphic did really well on twitter similarly there are other people some people who i now work with who started off basically cold emailing me being like hey i've created this thing for you for free what do you think and we're like oh this is awesome i want to hire you as a person so basically there's a bunch of benefits in like finding someone you like and like creating something for them and improving your own skills and potentially getting you into into their network as part of their network tip number three is a big one and this is to try and find a way to build a business when you're a teenager so when i was younger i had a little business doing web design and web development for small businesses and i was charging like five dollars an hour trying to undercut the market but the skills that i gained during that are so much more valuable than the small amount of money i made and it really helped me get into like what it's actually like to work with a client what it's like to pitch and sell my services what it's like to negotiate stuff and i was like regaining all these skills randomly from the age of like 13 to 18 this is stuff that you don't learn in school and so when i got to university and actually started my first successful business i already had this sort of six years of experience through trying to make money through web design and web development stuff that i was selling to clients from all around the world back in the day i used to use a freelance website called getacoder.com that's no longer a thing but these days fiverr and upwork and people per hour there are all sorts of these different platforms where you can potentially find clients for the services that you want to kind of sell to them and obviously you want to be good at those things so this involves developing skills and then finding a way to sell your services in a way that adds value to other people but broadly it's a great way of building a little side business even while you're at school in the weekends and in the evening tip number four is that if you can and this is actually quite hard but if you can try and find a way to turn your active income into some kind of source of passive income so if you can figure out a way to create some kind of product or some kind of digital product or sell something that is not directly tied to your time again mj demarco talks much more about this in the millionaire fast lane that is really kind of the ultimate place to get to where you could potentially even be making money while you sleep something like starting a youtube channel is actually a pretty good chat as well and you can definitely check out my skillshare class if you would like to learn how to start a youtube channel but the great thing about youtube videos is that anytime you make a youtube video once you're beyond a thousand subscribers and four thousand hours of watch time so you get into the youtube partner program every single video you make is an asset by itself so for example right now i'm investing time into making this video but this video is gonna be on youtube well for the next several years i hope and people are going to keep on watching this video two years from now i hope if the video is actually good and so i'm gonna be making adsense money even while i'm asleep and therefore this video becomes a kind of passive income asset i'm not saying that to make money on the internet you need to do some kind of social media you need to show your show your face you need to debase yourself on the internet like i've been doing for the last five years you don't necessarily need to do that but we just want to be thinking more about like is there some way i could kind of start out with some kind of active income source where i'm directly trading my time for money by offering a service but then can i turn that into some kind of productized service and can i read something like the millionaire fast lane or another really good book called take your shot or for example the four-hour workweek there are so many books and so many youtube videos and stuff that break down the process of doing this this is not that hard i'm still surprised when i get emails and instagram dms and stuff from people just being like bro can you give me advice on how to make money like bro the advice is already out there like you all you have to do is go and find it and actually execute on it there's no magical advice that i'm gonna give that someone's suddenly gonna you know put hundreds of dollars in someone's bank account it's really about educating yourself about the process reading books potentially even if you don't enjoy reading because books are incredibly useful value for money especially this one this one's absolutely sick and then when you execute on that a you're developing your own skills but b you're also hopefully making money on the side so that was tip number four try and pacify your active income and one of the best ways to get started with pacifying your income is tip number five which is to try and dabble with outsourcing yes this does require that you have some amount of money coming in but if a you've got a part-time job you've started making your own business you've started selling your services on the internet on one of these freelancing platforms or through other people you should hopefully be making some amount of money right now even as a teenager at this point you want to be thinking about what is actually your realistic hourly rate and is there a way that you could potentially outsource some stuff to people who are making less than that or that you can pay less than that amount of money for example when i was building my business at university there was a lot of stuff that required a data entry like taking stuff from previous exam papers and putting them into our database with permission all that kind of jazz of course but i wasn't going to sit there copying and pasting stuff from like one pdf into a database and so i hired this chap through upwork who was charging five dollars an hour to do basic admin and data entry and i paid him for like several tens of hours to do this work which which would have otherwise taken me tens of hours and in a way that was a way for me to pacify the active income that i was making by teaching courses and by helping people kind of helping people get into med school again i'm not saying you're gonna make millions doing this that's that's not the idea the idea is that especially when you're a teenager it's useful to develop the skill of what it's like to actually hire someone else if you're a youtuber for example what it's like to outsource editing like what would that actually look like if you're a business owner what would it be like to work with a virtual assistant who helps you with emails and calendars and stuff you don't have to do all of that kind of stuff but it's just worth at least dabbling in the space so you get some experience of what it's like now with all that said and if you're still watching this firstly thank you i hope you found this video useful so far but the final thing to keep in mind really is that we don't want to be thinking of these things as like sacrificing today for the sake of a better tomorrow i think generally one thing that i've learned over the years is that it's really all about enjoying the present moment and enjoying the journey as we're going along and if i think back about like my web design career when i was from age 12 to like age 18 i don't think about the money that i that i earned and i never really saw it as being a sacrifice but what i remember is the feeling of excitement that i'd get home from school and i'd be so excited to get back on on the computer to see has anyone hired me for a project can i learn some more php stuff can i do some more tinkering with this online game that i was building and that was such a joyful and exciting and exhilarating part of my life what i didn't do was that i didn't feel like i needed to sacrifice anything in my real life to make that happen hey i wasn't invited to many parties when i was young anyway that might come as a surprise to some of you but for example if it was like you know some friends who invited me over to play playstation or hide and seek or something obviously i still do that because that's like the fun stuff but rather than sitting at home and just watching tv instead i got even more joy out of life by doing this web design stuff so what i encourage you to do is not think of it as like i'm sacrificing my free time right now for the sake of a better tomorrow so i can make more money instead more about thinking like what are the things that i can do that i can develop an interest in what are the things that i can do that i enjoy that energize me that are generally fun so that even if i don't make any money i'm still glad that i spent the time doing those things and a lot of these 10 things that we've talked about in investing your time you want to find the ones that really fill you with intrinsic joy or find ways to make them more energizing and make them more fun so that you're you end up enjoying the journey and not just being fixated on the destination if you've gotten this far in the video then thank you so much for watching uh if you'd like to see more videos in this money club series i'd love it if you can leave a comment down below with a little money bag emoji of some some description and tell me what video you'd like to see i love talking about money i've been reading books about it for the last like 15 years and actually building businesses since the age of 12. i'm now 27 years old so a long time and i really want to share everything i've learned along the way um so if you if you have ideas or videos that you'd like to see please do leave them in a comment down below and if you enjoyed this video you might check out this video over here which is my ultimate guide to how to get started with investing in stocks and shares that'll give you a full primer on everything you need to know it's the video that i wish i would have had when i first got started with investing in stocks and shares so thank you so much for watching do hit the subscribe button if you aren't already and i'll see you in the next video bye

Channel: Ali Abdaal

Views: 839,226

Keywords: Ali Abdaal, Ali abdal, how to invest, how to invest in stocks, how to invest as a teenager, how to build wealth, investing for beginners, how to invest as a teen, passive income, stock market investing, how to become a millionaire, how to invest under 18, how to invest for teenagers, how to invest in stocks for teens, how to invest in stocks as a beginner, ali abdaal productivity, stock market, index funds warren buffett, investing for beginners uk

Id: YuCRDlEFaw4

Length: 22min 26sec (1346 seconds)

Published: Fri Apr 29 2022