Right, so let's say
you want to get started with this investing thing. You might have a bit of money saved. It's probably not enough for a house, but you reckon I should probably
invest this in something. Maybe you've heard on the news about Tesla or Netflix or Amazon and how, if you'd invested 10 years ago in Tesla then you'd be a millionaire
by now or things like that. But if you're new to the game, this whole investment thing can seem like a really
complicated black box. Like, how do you even buy a stock? What even is a stock? Do you just go on tesla.com
and buy some Tesla, like, how does it work? (chuckles) And if you try and look into this, you get all these acronyms
being thrown around like Roth IRAs and 401Ks in America or like ISAs or LISAs in the UK. And on top of that, there is the anxiety that we all have that I
know investing is risky and I don't want to
lose all that my money. So in light of all of that,
this is the ultimate guide on how to get started with investing. It is the video I wish I would have had five years ago when I
first started investing in stocks and shares. And we're gonna cover this by thinking about investing in
10 different bite size steps. So the first one is forgetting
about investing completely and just thinking what happens to my money
over time by default. And if you've studied economics, you will know that your money
loses its value over time. Thanks to something called
inflation. (bubble pops) Inflation is generally around
about the 2%-2.5% mark. And so that means that every
year stuff costs about 2% more than it did the year before. For example, in 1970, in America a cup of coffee cost of 25 cents. But in 2019, that same cup
of coffee costs a $1 59. That is inflation in action. And so let's say you've
got a thousand pounds in your hand right now. And for the next 10 years, you just stash it under your mattress. And you never look at it again, in 10 years time your thousand pounds is not gonna be worth a
thousand pounds anymore because everything would have increased by 2%ish every year. So the value of your
money will have fallen. And so if you put your thousand
pounds under your mattress for 10 years, you will
lose money over time. And this is obviously not good. Even if you put your money
in a savings account, like these days, a savings account will
give you like 0.2% interest which means your money
goes up by 0.2% every year. But because inflation is up by 2% you're still losing money over time. And again, this is not good. Okay, so that begs the question which is key point number two which is how do we stop our money from losing value over time? And the answer is that if we had a hypothetical savings account one that was let's say
an interest rate of 2.5% that would match roughly
the rate of inflation. So inflation means
everything goes up by 2.5% in terms of price. But our money in our savings account also goes up by 2.5% each year. Therefore we're technically
not losing money over time. If you're watching this
and you have an issue with the word interest, don't
worry stick to it for now, investment is not the same as interest but we'll come back to that a bit later. But the point here is that we don't just want to not lose money which is what happens at our 2.5% rate. We actually want to make money. And that brings us on
to question number three which is, well, how do
we actually make money? Now, let's go back to our
hypothetical savings account. If hypothetically, we could
have a savings account that was giving us a 10% interest rate this will never happen because
that's just way too high. But hypothetically if it did, that means that every
year we'd be making 10% of the value of the money
in our savings account. So for example, if I were
to put a hundred pounds in a savings account right now the next year it would be worth 110. And then the year after it will be 121 because it's 10% of then the 110, and then it would be 130 something. And this would very
quickly compound so that in 10 years time, my 100 pounds
will have become 259 pounds. And if we adjust for inflation that our money is still worth
206 pounds in 10 years time, this is pretty good. We have more than doubled our money, by just putting it in this hypothetical 10%
interest savings account. And it really doesn't
seem like it would do that because 10% feels like
a small amount of money. But if you extrapolate 10% over 10 years you actually double your
money, which is pretty awesome. Sadly these hypothetical
10% saving accounts don't really exist, because
it's just way too high and real life is not that nice. These days, most savings
accounts in the UK and I imagine around the
rest of the world as well, offer less than a 1% savings rate, which means you're actually
still losing money over time. But we do have other options to try and get us to this magical
Nirvana of like, you know, this 10% saving thingy. And that is where investments come in. So point number four is
what is an investment? And the answer is that an investment is something that puts
money in your pocket. For example, let's say you buy a house for a hundred 1000 pounds and you want to rent it out to people. There are two ways, that's an investment. There are two ways you're
making money from it. Firstly, let's say
you're charging some rent to the people living in your house. Let's say you're charging
them 830 pounds a month. That becomes 10,000 pounds a year. And so every year you're
making 10,000 pounds in rental income, which is 10% of what you originally paid for the house. That means that in 10 years time you'll have paid off the a
100,000 pounds that you've put in because you're making 10K a year. And beyond that every year
you're just making 10,000 pounds in pure profit. So that's pretty good. But secondly, it's an investment because the value of the house itself would probably rise over time. In general, there is a trend
in most developed countries that house prices tend to
rise over the longterm. And so your house will probably be worth more than a hundred thousand
pounds in 10 years time. And in fact in the UK,
historically in the past, some people have said that house prices have doubled every 10 years. So maybe your house is worth
close to 200,000 pounds. And so you've made money
off of the rental income but you've also made money
off of the capital gains which is what we call it when an asset increases
in value over time. But the problem is that buying a house is a little bit annoying. You need to have quite
a large amount of money for a deposit. You need to get a mortgage. You need to actually have the house. You just sought out the rental management, rent it out to people,
all that kind of stuff. If only there were a way of investing without a, having a large
amount of money to start with and b, without having
to put that much effort into managing the assets as well. And that brings us on
to investing in shares. And for me, basically, a hundred percent of my investment portfolio
is entirely shares. I have a tiny percentage in
Bitcoin and I own this house but I don't consider
this house an investment. I'll talk about that in a different video. Therefore number five is what are shares and how do they work? So buying shares probably as close as we're ever gonna get to this magical savings account that just returns some
amount of money each year. And the idea is that when you buy a share, you are buying a part ownership of the company that
you've got the share in. For example, let's say the Apple have a particularly profitable year because lots of people have well iPads as per my recommendations and because Apple are feeling kind, they are choosing to pay out a dividend to their shareholders. So for example they might say that they're gonna issue a
dividend of a million pounds, and that's gonna be split evenly amongst whoever owns shares in Apple, based on how many shares they own. So for example, if you
happen to own 1% of Apple you would get 1% of that
dividend that they've issued. So 1% of a million pounds,
which is 10,000 pounds obviously no one watching this
actually owns 1% of Apple, unless Tim Cook, you're watching, I don't even know if you own that much because that would make you
an extremely rich person because Apple is a very valuable company but that's basically how
the dividend thing works. A company decides to issue a dividend as a way of returning
some of its profit back to the people who have
invested in the company. And therefore you make
money through dividends. The second way of making money from shares is sort of like with houses in that you get the
capital gains over time. So for example, let's say
you bought 10 shares in Apple in 2010, at the time those
shares were selling for $9 each. So yoU.S.pent $90 on
buying 10 shares in Apple. As of October, 2020, Apple
shares sell for $115. So your 10 shares are now
worth $1,150 just by the fact that you only paid $90
for them 10 years ago. Okay, so we've talked
about what a share is and how you make money from them. And at this point you've
probably got a few questions like how much money
you need to get started or how risky is buying
shares in a company. And I promise we're gonna get to that. But point number six is how
the hell do you buy a share in the first place? And this is where it can
kind of get complicated because it's not as simple
as going on apple.com/buy and just buying a share in Apple. It doesn't quite work like that. Instead you have to go through,
what's called a broker. And back in the day, a
stockbroker was a physical person usually a dude who you
would call on the phone and say "Hey, Bob, I
want to place an order for some shares in Apple." And then Bob would types
and stuff into his computer or a place like a paper order. And then you would own shares in Apple. Thankfully these days we don't
really have to talk to Bob because there's loads and loads
of online brokers instead. And so you make an account
on an online broker and then you can buy shares
in a company through that. A bit annoyingly, every different country has their own different brokers that operate in that country. Because to be an online
broker in a country you have to abide by like
a zillion different laws. And so in the UK the system
is different to the U.S. which is different to Canada
and Germany and so on. And the UK, for example, most banks do have their own online
brokerage type things. So with most bank accounts you can also open an investment account with them and then invest online. But usually the interface is a bit clunky. It's a bit old fashioned. And so you're usually better off going with an online broker. In the UK, the two that I use
are Charles Stanley Direct and Vanguard, but before
we get ahead of ourselves and make an account on
Vanguard or whatever, we need to understand a few more things. And so question number seven is how the hell do I decide
which shares to buy? And the easy answer to that is that you actually
don't want to figure out which shares to buy. You do not want to buy individual shares. And I'm gonna tell you a
little bit more about that once I've had a haircut,
so see you shortly. All right? So new hair, I've got
my Invisalign braces on. So I'm gonna sound a little bit different but where were we? Oh yeah, we were talking
about why it's not a good idea generally speaking to
invest in individual stocks. And I'm gonna do a video
about this some other time, but essentially the issue with investing in individual stocks
is it's kind of risky. Like, yes, if you invest
in something like Apple, chances are it's gonna be
around 10 years from now. But historically there've
been quite a few companies that people were like, "Oh
my God, this is amazing. This is the thing to invest in." And then that company went bust. So you're automatically
exposing yourself to more risk if you're investing in individual stock, also in general, like it's easy to say, hey, Amazon grew 10X in the last 10 years. Therefore it's gonna
continue to do the same for the next 10 years. But that's trying to predict the future. And the past is no real
indication of future performance. And so the advice that most people would give for beginners is that you should not
invest in individual stocks. You should invest in index funds. And this is what Graham Stephan, one of my favorite
YouTubers also says as well. He says, "The index funds
are the best, safest, and easiest longterm investment
strategy for most people." Which begs the question
point number eight, what the hell is an index fund? So there's basically two
bits to understand here there's the index bit and the fund bit, let's start with the fund bit. And a fund is basically where investors will pool their money, so multiple investors would
invest in the same fund. And then that fund would
have a fund manager. And the fund manager
decides which companies the fund is gonna invest in. For example, let's say
I were managing a fund and I called it Gringotts and
let's say a hundred people from my audience decided to
invest in my Gringotts fund. I as the fund manager can
say, okay, the Gringotts fund now that we have a hundred people's money let's say it's a 100 million. So everyone's invested 1 million each I've now got a 100 million. I'm gonna put 20% of that
in Apple, 10% in Facebook, 10% in Amazon, 10% in
Tesla, 10% of Netflix 10% in Johnson and Johnson,
all of that sort of stuff. And so you, the investor
don't have to worry about this because you trust me and my fund Gringotts to manage your money. And as you know, the fund performs well, because the prices of these
stocks and shares increases you get the returns and I take
a 1% or 2% management fee. So I make a load of money because I'm earning 1% or
2% off of this a 100 million that I'm managing and you're not worrying about having to pick stocks yourself. You trust me as a seasoned
professional to do that for you. So that's what a fund is. Now, the index bit refers
to a stock market index. And so a stock market index would for example, be the FTSE 100 which is the a hundred
biggest companies in the UK or the S&P 500, which is
the 500 biggest companies in the U.S. or the NASDAQ or the Dow. And these are all different
indices of the stock market. And if we use the S&P 500, for example, these are the components of the S&P 500. So we said, it's the 500
biggest companies in the U.S. So number one is Apple and
Apple makes up 6.5% of the S&P, Microsoft makes up 5.5,
Amazon makes it 4.7, Facebook has 2.2, Alphabet,
which is a Google makes 1.5 and 1.5 is about 3% of the total S&P 500. And essentially we've
got these 500 companies if you go all the way down... Oh, Ralph Lauren is 496, but chances are, you've not really heard of many of the other ones
at the bottom of the list but chances are, you've heard
of most of the companies towards the top of the list. So the S&P 500 is an index
of the U.S. stock market. And if you look at the performance as a whole of the S&P 500,
you get a general idea of how the U.S. economy
is going as a whole. So this is currently what
the S&P 500 looks like and if we do a five year time horizon, in fact, let's go max. So you can see the S&P
500 started in 1980. And since that time this is what the us stock
market has been doing. So as you can see, there
is a general trend upwards but for example in 2000,
there was a bit of a crash, in 2008 famously there
was a bit of a crash. And earlier this year, when
Corona was first starting to be a thing there was a bit of a crash but then the market basically immediately recovered after that. Okay, so we know what a fund is, i.e. a way of pooling money. And we know what the index is,
something like the S&P 500, when you combine those,
you get an index fund which is a fund that automatically invests in all of the companies in the index. And so with me, for example basically all of my
investments, all of my money is in the S&P 500, which effectively means that 6.5% of my investments
are in Apple, 5.5 in Microsoft, 4.7 in Amazon, 2.2 in
Facebook, 3% in Google, 1.5 in Berkshire Hathaway and so on. So why is this good? Well, it's good for a lot of reasons. So firstly index funds are
really, really easy to invest in. A big problem that
beginners have to investing, it's like, well, how the hell do I know which company to invest in? How do I read a balance sheet? How do I do any of this stuff? If you invest in an index fund, you actually don't have to
worry about any of that. Secondly, index funds give you a decent amount of diversification. There are all sorts of
companies in the S&P 500. So you're not entirely reliant on the tech sector or the oil
sector or the clothing sector or anything to make
the bulk of your money. You are very nicely diversified across all these U.S. companies. Thirdly, index funds have very low fees. So because it's not a real
person who is deciding what to invest in and
doing all this research and trying to make loads of money is essentially a computer algorithm that automatically allocate your money based on the components of the index fund. The fees for those are really low. And one of the main things
about investing for the longterm is that even a slight
increase in your fees is gonna massively impact
your financial upside. And so for example, an
index fund with a 0.1% fee is so much better for you than an actively managed fund where a fund manager
is charging you even 1% because the longterm
difference between 0.1% fees and a 1% fee is sort of
absolutely astronomical over the long term. And finally, if you look historically and, you know technically
historical performance is not the same thing
as future performance, but if you look historically very few funds have managed to actually consistently beat the market i.e. outperform the index. And in fact, someone like
Warren Buffet famously says that if you gave him a
hundred thousand pounds and asked him to invest it right now he would just invest in an
index fund, like the S&P 500. And in fact, in 2008 Warren Buffet challenged the hedge fund industry to try and beat the market. He said that hedge funds
are a bit pointless because they charge way too high fees and they don't actually
get the sort of returns they claim to get. And so he set up this 10 year bet which this company called
Protege Partners LLC accepted, where Buffett said that he was gonna bet that the index fund outperformed
the actively managed fund. And he ended up winning that bet and sort of gave lots of money for charity or something like that. But that just sort of goes to show that it's really hard to beat the market with an actively managed fund. Basically, no one can predict what the market is gonna do in the future. And therefore if you
hit your ride on index, i.e. you're gambling on the entire market, rather than thinking, you know what I've got some amazing insight that I'll know exactly
which 10 stocks to pick that are gonna beat the market. You might as well hit your
ride with the whole market rather than individual stocks. Okay, so we've sorted out the problem of which stocks to invest in by completely circumventing the problem and instead, just
investing in index funds. The next big question people usually have about investing in stocks and
shares is the amount of risk. And that brings us to point number nine. And the argument usually
goes as follows that, "Hey, okay cool. This investing in stocks and shares stuff. It sounds kind of interesting, but my uncle Tom Cobley, invested lots of money
in the stock market. And he lost a lot of money. And my parents have told me that investing in the stock
market is a really risky thing and I shouldn't do it. And I should instead invest in real estate because real estate is safe." That is usually the sort of thing, the sort of idea that people
have about investing in stocks. And naturally there is the anxiety of what if I lose all my money. So let's talk about that now. So if we take a step back, the only way to lose money in anything is if you buy a thing and then you sell it for less than you actually bought it. Like, let's say you bought
a house for 300,000 pounds, and then Brexit happens the next day and the house prices plummet. And now your house is only worth 250,000. At that point, if you
decide to sell your house, then yes you are losing money and you've lost 50,000 pounds. Equally, the only way to
really lose money in stocks is if you buy a stock at a certain price and then you sell it for
less than that price. So for example, let's say
you bought shares in Apple on the 18th of February, 2020. And let's say you bought one share which time was $79 and 75 cents. And because this is your
first time in investing you keep on looking at the
price of the Apple stock because every time are you thinking, oh, have I made money, have I made money? And really annoyingly for you, you see that over the
next kind of few days a few weeks, Apple stock
is actually going down. And then on the 18th of March,
2020, you decide screw it. I'm gonna sell my one share on Apple, because I don't want to lose all my money. And you sell it for a
measly price of $61.67. And so you technically lost $18 because you bought it at $79 in February, and you've sold it for $61 in March. Then you think, damn, I've
lost 20% of my investment. This stock market thing is BS. I'm never gonna invest in
the stock market again, and you call it a day. And this would be a very bad thing to do. Because for example, if we
look at Apple stock price in March, it was $57.31 but if you just held
onto your one Apple share in that time, what is it today? It's the 8th of October. Apple is now trading at $114.96. So if you just held on for a few months, you would actually made a lot of money. You would have bought it at
$79 and within, I don't know eight months, it would now be worth $115. That's a pretty good game. And so the real lesson here is that when you're investing
in stocks and shares, and also when you're
investing in real estate, these are longterm investments. Ideally, you shouldn't
be putting any money into stocks and shares that you need to access
within the next five years. And actually a lot of people
would extend that to 10 years. And it's exactly like
that with house prices, it's like if you buy a
house as an investment, and then the houses house prices go down it would be completely stupid of you to sell the house unless
you are absolutely desperate for the money, because
something major has happened. And instead, if you
just held onto the house then you would have made
more money in the long run because in the longterm
house prices always go up and in the longterm basically the stock market always goes up and that's a bit of, it can
be a controversial statement. It is true, but I'm gonna make a video at some other point
explaining why it's true but for now take my word for
it that over the long term, the stock market always goes up. But having said that again,
this is a longterm thing. And so, for example, if
we look at the S&P 500 and look at how it was in
2008 at the financial crash right in 2007, it's $1,500
per bit of the S&P 500. And then the crash happens
and then by what is it? February, 2009, it's down to 735. So basically 50% of the
value has been wiped off of the S&P 500. Now, if you bought it in 2007
and you saw it, you know, get a crushing and crashing and crashing, and then you sold when it was $800. Now, you've lost a lot of money because you bought high and you sold low. But if you just held on, it took let's see, to
June 2007 it's at 1500s, it takes about up until 2013. So it takes about five years for it to get back to its normal level. And even if you'd invested,
like just before the crash and then your investment plummeted by 50%, if you would just held on you'd have bought in
at the S&P 500 at 1500. And right now it would be 3,445. So since 2008, 2007, when he first invested
over the last 13 years the S&P 500 has more than doubled. So you would have more
than doubled your money, provided you did not panic
sell when the market crashed. Now, hypothetically could the
market crashed down to zero and therefore you will
actually lose all your money. Yes, it could, but if the us stock market crashed literally to zero
i.e. all top 500 companies, including Apple, Google,
Microsoft, Facebook, like literally every company
in the top, in the S&P 500, all of those got destroyed overnight. And the stock market crashed to zero. The world would be in some
sort of mega apocalypse and you'd have a lot more
serious problems to worry about rather than the value of your portfolio, of stock market indices on Vanguard. In that scenario, in
that doomsday scenario money would stop meaning anything and you'd be using money to wipe your bum because money has no value because the stock market
is completely crashed. It's basically unfathomable
that the global economy could be so completely wrecked, such that every single
company goes down to zero. In my opinion, and again, you know, I'm not a financial advisor. This is technically not financial advice whatever that means, but in my opinion it's unrealistic to think that if I put my money in stocks and shares, I could lose all of it. There's basically no way you're
ever gonna lose all of it provided you're diversified. If you invested in, I don't know, Myspace in 2000 and whatever it was, and then Myspace crushes and
then you've lost all your money because, you know, they have no money, but if you invest in the top
500 companies in the U.S. or the top 500 companies in the world, or the top 100 companies in the UK, it is so vanishingly unlikely that you will ever lose your money. That I don't think that is a risk that we should even be thinking about. So realistic, worst case scenario, yes, investing in the
stock market is risky in the short term, but if you're investing in the longterm, the market will always go up and you will always end up
making more money in the long run provided you don't have to take money out at inopportune times. Okay, so at this point,
we've established that investing in stocks is very good and investing in index funds is a relatively safe way of doing this. The next question is usually
when should you get started? Like how old do you have to be? Is it ever too soon to start? Is it ever too late to start? And here the answer is pretty simple. And basically all investment advice agrees with me on this front. There's a very good website
called The Motley Fool @fool.com. and they have a
nice article explaining this. Basically, you should start
investing as soon as possible. It doesn't matter how old you are. It doesn't matter how young you are. The earlier you start
investing the better. There are three caveats though for like sensible financial advice. Firstly, you wanna make sure that all of your high interest
i.e. credit card debt is paid off, because when
it comes to compounding even though gains compound,
losses compound as well. And so if you've got like
a 6% credit card debt that's eating into your
bottom line every single month you want to pay that
off as soon as possible. Point number two is that you want to make some
sort of emergency fund. And people usually say that
your emergency fund should have in cash basically three to
six months of living expenses so that if you lose your job or if you're hit with some kind of incredible medical emergency, and you're not in the UK
where medical care is free, or you're in the U.S.
or something like that, then you've got money to do that. And you don't have to take
money out of your investments. And caveat number three is that you don't want to put
any money into stocks that you think you might need to use in the next three to five years. So let's say you're 24 and you've just landed your first job. And you're thinking of getting a mortgage and buying a house and you
need money for the deposit. Do not put that money into the S&P 500 or into any kind of stocks and shares because no one can time the market. And no one knows whether we might you know, there might be
a market crash tomorrow. All we know is that in the longterm, the stock market goes up, but if you need to buy a house next year there is absolutely no guarantee that that money will still
be worth exactly the same or worth more this time next year. So it provided those
two conditions are met. Like firstly, you have no high
interest credit card debt. And secondly, you've already
got your emergency fund. And thirdly, you're not
planning to gonna have a major expense in the next few years. At that point, absolutely everyone should be investing something
into the stock market. In my opinion, whether you're
12 or 20 or 21 or 22 or 50, it doesn't matter. And as they say on the market floor there is almost no way your future self will regret making the decision to invest. And as you know at this point, this is because of compounding. The more time you leave your
money in the stock market, the more it compounds. And there is a huge difference. There's like lots of interesting numbers about this on the internet
that people have calculated that if you start
investing at the age of 20, versus if you start investing
at the age of 25 or 30, it makes such a huge
difference to your bottom line. That basically, as soon
as you watch this video and hear about investing,
you should start investing provided those three conditions that we talked about are met. All right, so we're nearly there. Now, we're point 11 out
of 12 where we said, okay, you sold me on this idea
of investing in index funds. All of these three conditions are met. I don't have a high
interest credit card debt. I've got my emergency
fund, or I'm a student. And therefore my parents
are my emergency fund and I'm not planning to buy a house or a big thing in the next three years. The next question is usually how much money do I need to
get started with investing? And I know a lot of
students watch my channel and I had a lot of comments
on Instagram saying, "I'm 14 years old and
I don't have any money. How do I get started with investing?" And the answer here is again, quite easy, basically start with whatever you can. For some of these websites
and some of these apps that you can use to invest
in stock market indices. You can start with as
little as $5 or 10 pounds, depending on the website. You might need to start with
a 100 pounds or a 1000 pounds. You can research this and it kind of depends on
which country you're in, but basically you want to start investing as soon as possible. And it doesn't matter if it's a tiny amount
of money to begin with. Firstly, it's useful to
invest small amounts of money because compounding is always good. But secondly and more importantly, the sooner you start investing the sooner it becomes a habit. And so for me, for example,
I started investing in 2015. I knew absolutely nothing
about it before then, but I really wish I'd started
investing in like 2009 when I first had my first part time job because a, that would have encouraged good financial habits within me. I would have kept aside maybe 10% or 20% from the top line to
put into my investments. Secondly, it would have meant
that investing became a habit. And so I would have known about the fact that stock market indices exist. I would have done the research. I would have watched videos like this, although these weren't
really a thing in 2009. And what I'm really
annoyed about with myself is I started making
actual money in like 2012 when my first business
started to do very well. And between 2012 and 2015,
I did not invest any money just because I didn't know that you could. And I didn't know how and I always kinda thought that, "Huh, I'm making money now." It's just sort of sitting
in my bank account. And I know that inflation is a thing. So I know my money's losing value but I just didn't think about investing and didn't realize how easy
it is and that it's a thing. And so I really wish I'd started investing my real money in 2012, but the only way I would've done that is if I had started investing from 2009, when I first started making, I don't know, six pounds an hour
during my part time job. So again, and I can't state
this emphatically enough. Like it doesn't matter if all you have is a
small amount to invest even if it's one pound, even if it's 10 P. The process of making the account and researching online
stockbrokers in your country and figuring out how to
actually do this stuff is like the most valuable thing that you could be doing with your time immediately after watching this video. And finally, point number 12 is okay, I'm sold, I've got a 100 pounds here and I want to put it inside
a stock market index fund. How do I actually do that? And the answer here is you
want to find an online broker. So this will vary massively depending on which country you're in, because these online brokers as I said, have like zillions of laws
they have to comply with and financial regulations
and all this stuff. In the U.S. most people that I know use the Vanguard as well. And my favorite blogger Mr. Money Mustache recommends that as well. Although in the U.S. there are also other
services like Betterment, which I'd bet a few friends
who use that as well. Again, depending on
which country you're in, like literally all you have
to do is Google the phrase, best online broker, Germany, or best online broker, Pakistan, or best online broker, India,
whichever country you're in. And you'll find something,
read some reviews. Basically the thing you're looking for is you want to be able
to invest in index funds and you want the fees to
be as low as possible. I think Charles Stanley
Direct the fee is 0.25% which was the lowest at the
time when I made my account and I think is still pretty competitive. So you want the fee to be
like a really, really, really small fraction of a percentage. Then once you've made your account and verified your identity and gone through all the hoops and stuff which sometimes takes a few days, and they send you a letter to the post to verify your address, like depending on what
the regulations are. Once you've done that then you can start just putting
money in here and there. And all the friends that I've
spoken to about this stuff over the last, like four years since I first started knowing
about investing in things, they've all started making accounts and sort of making these
investment counts for themselves. For the first few weeks they all sort of compulsively check their phones to see what the stock market is doing. But then very quickly you realize that actually I'm investing
for the long term here. I actually don't give a toss what the stock market is
doing in the short term. I check my portfolio once every six months just cause sometimes I'm curious. I don't even bother looking at it. This is very much a set
it and forget it strategy, you're investing for the longterm. Your money will magically grow over time provided you don't touch it and think, "Oh crap, the stock
market's going down a bit. I'm gonna take my money, because I can't handle these losses." There's loads more to say
about investing in finance, but hopefully this was
a reasonably concise, not very concise. This is gonna be a long video, but well, hopefully this was a
reasonable introduction to how to get started with
investing in index funds. If you have more questions
about exactly what to do or anything else about money. Do leave a comment in the
video description area thing. I'm still trying to think
of a name for this series. I was thinking I posted on Instagram. There were a few options: Money talks, was quite a popular one,
but that's already a film. One that I really liked was Penny Sitting. I think I might call this
series Penny Sitting, that was kind of cool. A lot of people said like,
financeshially, financially. 'cause my name's Alica, financially, a few different options. I mean the way you think, if you have any ideas for
what this entire series about money and stuff should be called... And final piece of advice,
if you're in the UK, if you're in the UK and you're just getting
start with investing, basically go on Hargreaves Lansdown and make a Lifetime ISA. A Lifetime ISA is a very good deal. You can read more about it
at moneysavingexpert.com within the Lifetime ISA as of 2020, you can put up to 4,000
pounds a year into it. And then you can invest
that in the S&P 500, which is what I would do. If you have more than 4,000
pounds a year to invest you can then put another 16,000
into a stocks and shares ISA which I'd recommend doing
on a vanguardinvestor.co.uk And if you have more than 20,000
pounds to invest in a year and you're doing really well then just open a general
investment account with Vanguard. This is what I do, I think it works great. Loads more links in the video description to other resources and bloggers
and books and other videos that I would recommend Graham Stephan, has an amazing YouTube channel, Andrei Jikh does a good job
with YouTube channels as well, and Mr. Money Mustache
amazing, amazing blog J L Collins' amazing blog
with a Fantastic Stock series that you should definitely read. There's so much to explore in this area, and it's a really fascinating topic but thank you so much
for watching this video. Hit the video here if
you want to learn about how I make the money
that I used to invest. It's my video about how
to make money online. Thank you so much for watching. Good luck with investing. Make sure you invest in a
stock market index fund. Hopefully I'll see you in the next video. Bye bye.
