How To Invest in 2021 (How ANYONE can be RICH)

what's up you guys it's Graham here so this is a tragedy after posting the video about the money mistakes to avoid in your 20s which by the way if you haven't seen that video already make sure to check that out so you can smash that like button two things came to my attention first people don't know what avocados toast is not okay is millennial I am only slightly offended for anyone who doesn't know what avvocato toast is it's avocados and it's on toast and it's absolutely delicious secondly it's come to my attention that people do not know how to invest so that they can get filthy rich and buy Lamborghinis how do I know this because I get comments like this that's absolutely unacceptable and what's even worse is that none of this stuff is taught in schools because schools think it's more important to teach you things that you're gonna be using day today in the real world like algebra 2 and secondly it seems like very few parents teach their kids how to do this because they're more concerned about their kid doing their algebra 2 homework for a good grade then learning how to be a financially literate adult but you know what that's none of my business so instead I'll put all the basics about investing here for you guys to watch and enjoy and all I ask in return is that you hit the like button and subscribe if you haven't already so let's go ahead and start here how do you start investing your money what can you invest it in to get an 8% return on your money and how can you afford to buy avocado toast without breaking the bank so here's how and because everyone really appreciates specific step-by-step examples I'm gonna be as specific as possible here starting from the least risk lowest return investments all the way to the highest risk highest return investments that you can make enjoy so number one for everyone looking for just a basic place to put your money we have the almighty Ally Bank online savings account that gives you a two percent interest rate on your money this is literally as simple as going to alikom opening up their savings account and depositing money and then you're done and if you haven't already joined Ally Bank they are by far my favorite online bank they do free checking accounts free savings accounts free debit cards free checks free just about everything with no monthly fees did I mention it's free and I really like free so that's why I like Ally Bank you can also decide to use a few other high interest savings accounts like Barclays synchrony Bank or American Express savings that all currently offer around a two percent return and this is personally what I do for any money I know I will need in the near future this is because I do not recommend you invest any money you know you're gonna need over the next five years like if you're saving up for a down payment on a property you're saving up for a business or you're saving up for whatever specific purpose like bit connect keep your money out of the markets the reality is that in the short term the market could be way too volatile to guarantee any sort of profit we have no idea where the markets will be five years from now and while you could absolutely comment ahead by investing your money for a profit in a short term there is no guarantee of that outcome and you could actually end up losing money so don't do that don't lose money instead if you have money that you know you're gonna be needing over the next one to five years just do what I mentioned and put it in a high interest online savings account that way you know you can pretty much get a guaranteed 2% return on your money with absolutely no work and absolutely no risk and simply sit back and call it a day and then make youtube videos about sitting back and calling it a day by using an online savings account so just do that so the second thing I want to mention and arguably this is the most important point of this entire video especially when it comes to investing is if you haven't already done this set up a Roth IRA like no joke doing this is just as important as me telling you guys to get a credit card to start building your credit start a Roth IRA like do this tomorrow and I guess if you're watching this tomorrow just do it now just trust me on this one just do it right now this is basically just a retirement account that you could put money into and by the age of fifty nine and a half you could pull out all of your profit completely tax-free without paying any capital gains tax now prior to the age of fifty nine and a half you can pull out whatever money you contributed to that account but whatever profit you made from that money must remain in there otherwise you end up paying a penalty for instance if you put in five thousand dollars to a Roth IRA and it grows to seven thousand dollars you can pull out that original $5,000 at any time but that extra $2,000 profit must remain in there otherwise if you take out that profit you're gonna end up paying taxes on that money as well as paying a 10% fee it's just not worth it so don't do that now because this could be a little bit confusing the Roth IRA is not the investment itself it is simply just a retirement account for you to hold investments within just imagine this almost like a brokerage account and with that accounts you can invest in stocks you can invest in index funds and bonds or you can even invest in real estate and especially when you're young and not making a ton of money right now doing a Roth IRA is the best things that you can do for a few reasons number one is that chances are right now you're already in a low tax bracket so your money is barely being taxed as it is and second is that you have decades now of compound interest that is going to help grow your money into something substantial consider that every dollar you invest at the age of 20 is actually worth twenty one dollars and seventy two cents by the age of 60 assuming an 8% average return that pretty much means that you would be paying taxes on twenty dollars and seventy two cents of profit but with the Roth IRA you will pay absolutely nothing in taxes there's absolutely no reason for you guys not to do this I opened up one of these accounts when I was twenty by far this is one of the best decisions that I have made the number three in terms of actually what to invest in my biggest recommendation for most people is to invest in an index fund with a low expense ratio this is because the majority of investors and even hedge funds cannot consistently beat the market so instead it's better just to ride the market and when everyone always asks me Graham how can I get in 8% return this is pretty much always my advice long-term historically the stock market has averaged about an 8% return adjusted for inflation with the dividends reinvested this is why I believe for most people out there this is the safest highest yielding long-term investment out there besides real estates of course but when you invest in an index fund like this they always carry a small fee to them so it's very important that when you invest in something like this you invest in the cheapest fund you possibly can and when it comes to that you know I like cheap stuff for me it's always with Vanguard their fee is one of the lowest out there at 0.04% annually and this all might sound a little bit more complicated than it actually is it's super-easy and let me explain an index fund is basically just a fund that comprises of hundreds or thousands of different companies and you can own a fraction of all of them for a fairly low price that's basically just what an index fund is and it gives you the ultimate diversification for a very low price now if it were me personally and again this is not financial advice for educational purposes only link we I will go to Vanguard calm open up a Roth IRA and then put all of your money in VT sacks this is a total stock market index fund that comprises the entire US equities market again for the low price of only $69 per share minimum investment $3,000 now historically over the last 19 years this fund has gained about 7% annually and over the last 10 years we've seen a 12% return now this isn't to say that the markets might not go down in the short term and it's very well possible but like I said long term with risk comes reward and holding this long term should have a fairly positive outcome again when you hold it over the next 20 or 30 years another favorite of mine is what's called the Phi X which covers the top 500 companies here in the United States and again since the inception of this one we have seen a six and a half percent return and over the last ten years we've seen just about a 12% return you can also look into investing in a target date retirement fund which basically just takes the guesswork out of figuring out what to invest in you just figure out what year you think you're gonna retire into and the fun does the rest of the work for you so for most people out there who don't really want to think about what they're doing and figure out I'm just going to retire in 40 years or 30 years or 25 years or whatever it might be that's probably the easiest thing for you to invest in okay so now number four I figured I would put this here instead of putting it back to back with the Roth IRA and that is opening up a traditional 401k this is one of those things where if you're already opening up a Roth IRA you may as well just open up one of these bad boys as well a traditional 401k is basically an account where whatever you contribute to that account is deducted from your total taxable income saving you money on taxes and you could then grow that money completely tax-free within the 401 K up into the point that you take the money out of the account or the age of 59 and a half this means you're gonna be having more money to invest because you're gonna be saving that money from paying taxes for example if you're making $50,000 a year and you invest $10,000 into a 401 K you're only going to be taxed as though you just made $40,000 saving you from paying taxes on that extra $10,000 that you invested now if that sounds too good to be true it kind of is because the catch to this is that you end up paying taxes on that money after the age of 59 and a half whenever you take the money out of the account and also you cannot take out your money prior to the age of 59 and a half without then paying taxes on that money that you would have ordinarily had to pay plus by paying also a 10% penalty on that money so basically if you open up a 401k and invest money into it just do it with the expectation that you're not going to be using that money until you retire or until after the age of 60 but if you're cool with that long term go ahead and absolutely do it but really quick one of the best parts though about a 401k is that many employers will offer what's called an employer match this means your employer might match whatever you contribute to a 401k up to a certain amount if your employer offers any type of employer match always do it no matter what in every single situation it's basically free money who doesn't like free money nobody nobody doesn't like free money that's suit so ask your employer if they offer one and if they have an employer match and if they do always contribute up to the maximum of the employer match so for instance if they match the first thousand contribute always a thousand dollars to the 401k because they will match it if it's two thousand dollars to do the same thing contribute two thousand dollars to it whatever the match is always meet the match always meet the match I guess that works number five back to investment options if you're into it and don't mind doing a little bit more of the work yourself you can invest in individual stocks I personally recommend if you're gonna do this do this within a Roth IRA or a 401k so you could avoid being taxed in whatever profit you have but you know what it's totally up to you that is not required you could just as easily open up an account with Robinhood invest within that completely commission-free and reap some pretty good returns for instance Amazon is up 50% this year AMD is up one hundred and thirty percent this year Tesla is also up fifteen percent this year and Facebook is down 20% that sucks but as you can see if you end up picking some winning stocks you can do substantially better than investing in a broad index fund however just keep in mind that when investing in individual stocks it's a lot riskier and because you have less diversification if the stock goes down you have the chance of losing a lot more money so that's got to be a risk you're willing to take but individual stocks can definitely be a great way to invest if you have a knack for it if you enjoy keeping up with stock market news and you end up picking some winning stocks the one thing I should note is that usually the average investor cannot consistently beat the market with individual stocks including myself and that's why I don't even try this means that most investors out there would generally be better off just investing in a broad index fund and writing the market then trying to consistently pick winning stocks that will do better than that so again if you're the type who doesn't want to do much work or the type who doesn't want to take on a lot of risk or the type who doesn't want to trade stocks every few years I recommend an index fund if that is not you then by all means go and invest in individual stocks if that's something you have an interest in now number six obviously is by far my number one favorite from the entire list and that is investing in real estate unfortunately this is probably one of the things that you're gonna have to work up to especially if you're just starting out unless you have a lot of money already to work with chances are this is something you're gonna be slowly working up to and saving up and then eventually you can invest your money here typically you're gonna be needing a fifteen to twenty percent down payment to begin investing in real estate and if you're in a very expensive area like me that could mean you'll need a lot of money but real estate is easily my favorite for a few reasons the first is that you can get immediate cash flow from your investment which means that every month when rent is paid you get a check in your pocket second because of all of the great tax deductions of real estate - all of that money that you're going to be making chances are is going to be yours completely tax-free third you're able to borrow most of the money you need to invest in real estate and then slowly pay that off over a long time fourth you're also building up equity in the property as you're paying down the loan and then eventually after fifteen to thirty years you're gonna own that property outright and finally over the long term and that property is likely to go up in value that's why it's no surprise that 90% of the world's millionaires are created through investing in real estate and I am absolutely no exception to this if you're interested in investing in real estate I'm not gonna spend too much time on that here because my entire channel is dedicated pretty much to investing in real estate I have Moulton playlist you can look through or just type in the YouTube search bar real estate investing gram and you'll be able to see all my real estate investing videos I easily have like 30 or 40 or 50 of them on my channel so feel free just go and check those out they cover like 90 percent of what you're gonna need to know and finally number seven is drum roll investing into a business and this is where you can probably get the highest return out there from anything I've mentioned from any investment out there is simply within your own business for instance I tried running a few targeted Facebook ads from my program the real estate agents Academy link in the description for any real estate agents out there who want to grow their business to a six-figure career I cover everything you need to know about that link in the description but anyway I ended up getting a 300% return on the money that I invested in Facebook ads in terms of product sales a 300% return within really just about 48 hours I've seen other businesses invest in branding marketing or other types of advertising with a phenomenal return if this is the case and investing back into your business is going to give you a substantial return absolutely always do this in conjunction with a few of the things that I mentioned in this video that is no doubt going to give you the highest return possible this also includes using this money to invest in a business it could be starting your own business buying product testing out ads doing Shopify social media marketing investing into YouTube equipment for example I spent $18,000 creating this YouTube studio for better videos for you guys to watch and I ended up making my money back in extra YouTube ad revenue within two months that means I got a 100% return in just two months by creating this amazing YouTube studio and buying a dinosaur skull something like that can be a very very good investment same thing like buying better lighting which I know I need to do or a better camera different things like this are always a good investment so consider how you can invest within yourself or invest in a business or start a business or do anything like that that could give you some pretty substantial returns but as I've mentioned time and time again usually the higher the return the more the risk you take and that is something you have to feel comfortable with so hopefully now you've got a pretty good understanding about where and how to invest your money to make you more money to then make you more money to then make you more money so you can go on YouTube and talk about how to make more money and I guess I guess that works that'd be pretty fun so anyway you guys thank you so much for watching I really appreciate it if you made it to the very end you haven't already subscribed or hit the like button just do both of those also feel free to add me on snapchat and Instagram my poster pretty much daily so if you want to be a part of it there feel free to add me there and finally of a private Facebook group for anyone interested in real estate real estate investing real estate agency real estate coaching mentoring it anything real estate the link to that is in the description thank you so much for watching and until next time

Channel: Graham Stephan

Views: 1,427,958

Rating: 4.9406619 out of 5

Keywords: how to invest, how to invest in 2019, how to invest in stocks, how to invest in real estate, how to invest in stocks for beginners, how to invest money, how to invest in your 20s, how to invest 1000 dollars, how to invest in the stock market, how to invest money as a teenager, how to invest in real estate for beginners, how to invest in real estate with no money, how to invest in a business, investing for beginners, real estate investing 101, stock market 101

Id: zBNpqSMiffY

Length: 16min 55sec (1015 seconds)

Published: Wed Dec 05 2018