How To Make Your FIRST Investment So You Can Become A Millionaire - Step By Step

most people think that you need big Pockets a lot of free time or a Wall Street education to start investing but that's a big lie and I'm going to show you how in this video if you want to be a successful investor you have to start by asking yourself three questions number one how involved do you want to be with your Investments number two what assets do you want to invest in and number three how do you want to get paid when you ask yourself how involved you want to be this is more of a time question and an interest question because you could either be a passive investor or an active investor a passive investor means that you're not going to have much time involved and you're not going to have to worry about really researching companies it's passive on your end once you set up your Investments an active investor means that now you're not trading but now you're looking for good Investments and you're going to be spending time monitoring Investments so active investing is going to take more time pass investing is much more passive what assets you invest in means now what do you want to actually put your money in is it the stock market is it the real estate market is it going to be businesses startup businesses or other companies that you invest in is it going to be cryptocurrency is it going to be a medal are you going to be lending your money what do you want to actually invest your money into and third how do you want to get paid do you want to get paid with cash flow meaning now you're getting paid without selling your asset or do you want to invest in something and then hopefully sell it for a profit in a year or five years or ten years what is your strategy to get paid and now let's start by really diving into this and then we'll go into this and then we'll go into this so let's start by talking about passive versus active investing as a passive investor what you're going to do is you're going to figure out what you want to invest in that work is going to be front loaded and once you figure that out the work after that is completely passive you're going to set up an automation that way now every time you get paid whether it's every week every two weeks every month you pick the duration it doesn't matter but now every time you get paid some of your money is automatically going to be invested and now you don't have to worry about it you don't have to monitor it every day you don't have to sit there and watch the markets every day you're gonna set it up automate it and not worry about it and now this is a long-term investment that'll be working to build you wealth and this is happening on the side without you having to do anything an active investment this is going to require more time on your end now you're going to be looking for individual Investments whether it's stocks or real estate or businesses that you're managing now you're looking for individual Investments and on top of that you're also going to be spending the time to research the investment so you have to be actually interested in investing in money and managing Investments and researching Investments if you don't have any interest in debt and if you don't have the time to invest your money and manage these Investments then you want to focus on the passive side if you love the idea of understanding finances looking at companies looking at real estate and looking at Investments then this is something that will be more interesting to you with active investing you have a little bit more risk but you also have a little bit more upside with passive investing you have less risk less upside but also less downside now you don't have to pick one or the other like I am an active investor and a passive investor some of my investments are here and some of my investments are here so you can do both but you have to understand stand what these two are that we know how to get started and this brings us to number two what assets do you invest in and as a little bit of a disclaimer I do have to let you know that investing has risks you are never guaranteed to make money when you invest you might even lose money which is why you need to always do your own due diligence and never blindly trust a random guy on YouTube if you want to be a passive investor the most accessible Investments for you are going to be stock market Investments or real estate funds not only in operating physical real estate but investing in funds that give you exposure to a real estate investment if you want to be more of an active investor some of them are stocks you can invest in real estate you can invest in businesses or a whole bunch of other different things let me start by talking about these types of passive Investments then we'll jump into the active side if you want to make money in the stock market most people think that you have to find the next Amazon or they have to find the next Microsoft or the next Google before it becomes popular but for 90 of people if you really want to make a lot of money and become a millionaire in the stock market you don't have to go out and actually individually invest in companies or find the next Amazon instead what you can do is invest in a fund that gives you exposure to a lot of companies now there's a lot of different types of funds you have ETFs mutual funds and index funds but what you should be looking for if you just want to be a passive investor is the fund that gives you exposure to something that you believe in for the long term that doesn't charge you a lot in fees so some funds are going to be what are called actively managed meaning there's going to be a person actively trying to trade the best companies trying to give you the best returns but the downfall with that is you're going to pay higher fees versus a passively managed fund which is going to be managed by a computer that's going to give you exposure to some certain index or group of stocks and the benefit of this type of passively managed fund is that your fees are generally less now what we've seen throughout history is that generally not always but generally the higher fees are not going to justify the higher potential returns most of the time especially when you look at it for the long term the higher fees are going to eat up your more profits so you end up losing money paying the higher fees than if you went with a lower cost fund doesn't always work like that no but generally that is the case so for most people generally you're going to be better off with a lower cost fund where now you're getting exposure to something that you believe in and there are funds that give you exposure to pretty much anything like there are funds that give you exposure to the total stock market there are funds that give you exposure to the S P 500 which is a group of the largest 500 companies in the stock market there are funds that give you exposure to the Dow Jones there are funds that give you exposure to the NASDAQ there are funds that give you exposure to financial companies there are funds that give you exposure to tech companies there are funds that give you exposure to International companies and there are funds that give you exposure to Emerging Markets these are countries and companies overseas that are starting to grow that are seeing more growth over there and they're not relying on the dollar as their currency so now once they start to think what is it that you believe in for the next 10 20 30 years how can you get exposure to that and what what fund will allow you to do that with the lowest fees a few examples of some ETFs that will help start your research and again I'm not telling you what to invest in just giving you these as examples are vti vti is a total Stock Market ETF meaning when you invest in this one ticker symbol if you invest in vti you're essentially investing in the entire stock market because vti invests in the total stock market then you have spy and voo which invest in the S P 500 these are S P 500 ETFs and as little disclaimer I have some my own money invested in vo what that means is the S P 500 is a group of the largest 500 companies on the stock market now instead of you going out and investing in these 500 largest companies in the stock market you can invest in either spy or voo and these two ETFs will both give you exposure to these 500 companies so when you invest in this or this you are now essentially owning the 500 largest companies in the stock market if you invest in DIA which is the ticker symbol for an ETF this gives the exposure to the Dow Jones you might have heard of the Dow Jones Industrial Average the Dow Jones is one of the most commonly talked about indexes meaning groups that people look at to see what the health of the stock market is and then QQQ is an ETF that gives the exposure to the NASDAQ the NASDAQ is a group of companies about 100 companies that are the largest non-financial companies many companies in the NASDAQ are actually tech companies so this is a way for you to start your research and now this is a way now for you to invest in the stock market without having to find the individual company and the way that you succeed as a passive investor here is you're going to create your own portfolio of ETFs that you want to invest in you find what sectors you want to invest in you find the ETFs that give you exposure to these sectors and then you're going to create an automation there are so many brokerages out there that can help you with this I have my recommended brokerage which is an affiliate of ours down in the description meaning if you use them we will get compensated you don't have to use them but you find a brokerage that allows you to do this this type of passive investing and then you're going to create an automation that way every week every two weeks or every month money is automatically going to be pulled out of your account and automatically invested and then you're going to turn this on and leave it on no matter what's happening in the markets because the biggest mistake you can make is when you go through an economic downturn or a recession or a market crash you turn it off or you sell that's not what you want to do with this passive strategy you want to be investing for the long term and when you go through a market crash or recession the only thing you should be doing is potentially buying more because you are investing for the long term the next number of decades so what's happening in the next six months or the next two years are just a little bump in what should be happening over the long term so you got to remember if you want to succeed as a passive investor especially in the stock market you need to be investing for the long term it needs to be automatic and it needs to be completely passive on your end now we could talk about investing in real estate passively the way real estate investing works is you can go out and buy a property a home and apartment complex and office building and now you buy it not to live in yourself but to rent out to other people so other people can live in or use your property and then this rent should cover your expenses and it leaves some money in your pocket every single month now if you wanted to invest in real estate yourself like this it's going to be much more active that's why it's listed here but on the passive side the way it works is you taking money and instead of you going out and actually operating the real estate you're going to invest in somebody else's real estate fund so you can find a real estate investor There's real estate investor conferences around the country around the world you can find an investor that's looking for money and now you can pay them and when you pay them now they will take your money you will be a silent investor a passive investor they will use your money to go out and buy a property and then hopefully they'll be able to rent it out and sell it or refinance it for profit which is how you will make your money now generally you will make money if the property is generating positive cash flow meaning profits from the rental income and if they sell the property or refinance it at a profitable rate that's how you get paid there are apps on the internet that allow you to do this as well again if you want to see one you can check out our description for an affiliate that will help you to do that but the whole idea here just like with stock market investing is now you're not going to be researching the individual projects you're not going to be spending all that time to operate the properties you're putting your money into a fund and you're letting somebody else an investor a developer an expert somebody in the real estate space is going to take your money and now they're going to be putting it into real estate for you that way hopefully you can make money are you guaranteed to make money no of course not investing has risks just like investing in real estate has risks all Investments go through Cycles but as a passive investor you have to understand you are a long-term investor and when you don't actively manage it yourself your risks are lower and your upside is also lower now before we move on to active investing if you do want additional resources on how to start investing we put together a full guide on how to invest your money and start generating cash flow in my market insiders company so if you want to read this guide on passive income it's completely free and I'll put a link to how you can read this guide on investing and generating passive income down in the description below as an active investor in the stock market now instead of investing into these funds what you're going to be doing is looking for individual companies so if you invest in a fund you might get exposure to the Amazon company the McDonald's company the Coca-Cola company and 400 other companies in the fund but if you invest in the Amazon company itself now you're actually researching the Amazon company you're keeping up with the earnings calls you're going to look into the finances of the Amazon company and then you're going to look at the actual innovation of the company is is something you want to invest in for the next 10 years and then when you find a good price that's when you would go in and buy it's going to require much more work on your end because now you're going to have to actually keep up with the company as opposed to investing in the fund that gives the exposure to Amazon and 400 other companies because now when you invest in the Amazon company you're taking on all the risk because if Amazon were to take over the world and they run a monopoly well now you're the one that's getting the benefit because you own the companies your stock price will go up but if Amazon ran company into the ground the CEO starts doing some shady things and then they go bankrupt now your investment goes down to zero so higher risk higher potential reward versus in the passive method when you invested in a fund that gives you exposure to Amazon if Amazon took over the world that'd be great but it'd be balanced out by some of the losers if Amazon went bankrupt that wouldn't be good but it'd be balanced up with some of the winners in the fund so you have less risk less upside but also less downside here you have more risk higher upside but also higher potential downside and so now you have to understand that it's going to one take more time and more research figures you're going to have to know and learn how to research and value a company and keep up with the company and the earnings calls likewise when it comes to real estate investing now instead of just passively investing your money into a fund you're going to look for a property whether it's a single family home whether it's an apartment complex but there's an office building you're looking for some sort of property that you can buy for the purposes of generating cash flow now what you're going to be doing is you're going to be analyzing locations analyzing neighborhoods analyzing properties is that we could find a good deal now why do you want to find a good deal because you want to generate cash flow when I invest in real estate the number one thing that I'm looking for is not how much can I sell this property for in two years it's not can I flip this property in six months it's how much cash flow will I get how much money do I have to put into this property today and how much cash flow is this property going to pay me month after month after month so when I invest in a property I'm looking for a seven percent cash on cash return that means for every dollar that I invest I want seven cents in cash flow after paying for all of my expenses so if I'm buying a property I'm putting in a hundred thousand dollars myself I wanna see seven thousand dollars of cash flow seven thousand dollars in profit year after year to justify me investing the hundred thousand dollars now if property prices go up that's icing on the cake if property prices go down well oh well I'm buying for the cash flow I'm not buying for the property prices so I don't really care where property prices go for me as an investor in real estate I am looking for cash cash flow that's what I like investing my money for and we're going to talk more about this in number three and that's how I do my analysis when I look for these types of real estate deals when you actively invest in a business you have a lot of different options here you can invest in your own business you can invest in buying somebody else's business you can invest in a franchise or you can invest in startups for me mainly it is me investing in my own companies and me investing in startups when you invest in your own company of course it's risky because when I invest money into my own companies there's a chance that the money that I put in will go down to zero that my company will go nowhere time a company will go bankrupt likewise when I invest in startups it's the same thing most of the startups that I invest in will go to zero that's just the nature of startup investing when you invest in the startup most startups will fail but the whole goal with investing in a startup is hopefully one of the companies that you invest in or a fraction of the companies that you invest in will make it big and that will justify all the other losses that you get now so startup investing works now how do you invest in a startup well now because of the internet there are a lot of platforms that make it a whole lot easier for you to do that that will allow you to start investing in startups with as little as usually like a hundred dollars what are these platforms well one is refunder one is Republic one is start engine these are three of the largest platforms on the internet that allow you to invest in these types of startups and it's a little bit of a disclaimer I am an investor in the Wii funder Corporation if you want to invest in your own business whether you got to have a business idea and you got to be willing to invest in your education and then in your own business that way you can grow the companies then if you want to invest in somebody else's company there's a lot of platforms on the internet that will help you find a company to buy this is where now you're looking for a business to operate these might be a franchise businesses or they might not be franchise businesses where now you're looking to actually purchase the company some of these companies will require you to be involved in the company work there or manage the company other companies usually with higher dollar figures a million dollars or more will sometimes allow you to be more of a passive investor where you can buy the ownership in the company without having to work there without having to actually operate the business because they'll have a management team in place so if you want to own a business and operate it but you don't want to start it yourself well then you can actually go out and buy a business now of course it's going to take more money but that is an option for you if you want to be an active investor in business and then you have a whole bunch of other types of Investments you can invest in cryptocurrency it's much more speculative we're upside we're also potential downside before you go and invest in something like cryptocurrency make sure you actually believe in it and understand what it is that you're investing in and all the other alternative asset classes now for some people trading cards have become an investment and art has become an investment for some people but the only thing I want to say about that is that with these types of alternative Investments they're really going to vary depending on how much money people have because if people are running out of money the economy is slowing they're not going to care about the value of their trading card they rather own an investment that's producing value and they rather care about what food they're going to eat so the value of these types of more alternative Investments are really going to be justified based on how much money is in the economy and how strong the economy is when you're in an up economy and everybody's Rich sure you'll see the value value of these alternative Investments rise when you're in a down economy and people don't have money well people would rather buy an investment that's producing more value so just something to keep in mind especially if you're just getting started make the bulk the vast majority if not all of your Investments something that has been proven the test of time and something that is producing value that way you can get paid the way that you want to get paid which brings me to number three how do you want to get paid there are two general ways that you can get paid as an investor number one is appreciation which is when the value of investment goes up and number two is cash flow appreciation means I'm gonna go buy a stock for 100 and then it goes up and price to 200 a share which means I made a hundred dollars per share but you only get paid with appreciation when you sell your investment if we don't sell it well that 200 could go back down to a hundred dollars or go back down to fifty dollars so you don't actually make money and lose money until you actually sell cash flow is now when you're getting paid without selling so if you buy a stock for a hundred dollars a share and the price goes up and down but they're issuing a three dollar dividend every year that means it doesn't matter what's going on with the stock price it's paying you three dollars with cash every single year for me the bulk of my entire Investment Portfolio produces cash flow because I like Investing For Cash Flow my goal is to use this cash flow for my investments to live my life because cash flow this cash flow that comes in is going to come in month after month year after year even when I'm not working so my goal is to build up this cash flow that way I can use this cash flow to fund my lifestyle because cash flow funds the guac flow when you have enough cash flow from your Investments to live your life well now you're financially free because you're going to keep getting paid because your investments will keep paying you even when you're not working and now when you have this type of cash flow to live your life you don't have to worry about your expenses you don't have to worry about your income because the cash flow will keep coming assuming you have good Investments but this is going to require more sacrifice on your end because the way that you get this cash flow is he makes sacrifices today you earn money and you don't spend money today and take the money that you didn't pay Bend and you put it into an asset that we just discussed that's going to pay you with cash flow now what type of Investments pay with cash flow well stocks that pay dividends they pay cash flow real estate pays with cash flow if you own a business and it's generating profits that profit is cash flow the income that you're getting your salary your wages that's not cash flow that's your active income that you're working earning the profits that you're getting for owning the business that's the cash flow so you have to understand if you're running a business if you're actually working in it you want to make yourself disposable because that way you can hire somebody else to take your spot that way now you the cash flow that you're getting from the profits that's the cash flow your income that you're getting from working there that's not the cash flow so your cash flow can come from stocks real estate or businesses the appreciation can come from really anything where now you buy an investment and you hope to sell it for a profit some of my investments are for appreciation but the bulk of my investments are for cash flow because I value cash flow more than this this provides me with stability this provides me with a little bit less risk they this is more of the fun more speculative types of Investments now there are pros and cons with both because the pro with cash flow is to get paid now but the con is if a company is paying out a dividend that means it's probably not going to grow as fast because if a company has a million dollars worth of profit and they give it away in the form of cash flow that's a million dollars that the company no longer has to invest in the company it's a million dollars the company no longer has in savings so a company is now taking the cash out of its company and giving it to its owners which means it's not going to be growing as fast versus a startup company which when it makes a million dollars it's going to take all million dollars and maybe more and invest that back into the company that way it can grow bigger and faster so when you're investing for this type of cash flow you might not see the appreciation as fast and secondly when you get this type of cash flow you also have to pay taxes when you get this income whether it's dividends or rental income or profit you have to pay taxes on this income even if you reinvest this cash flow like if a company is paying you a dividend and you automatic medically reinvest this dividend you never touch it it never even hits your bank account because it automatically goes back to buy you more stocks well you still have to pay taxes on the dividend income that you received so you're taxed on the cash flow the appreciation you're now taxed on you'll need taxed when you sell so if you really want to start investing you don't need a million dollars you don't need to have a Wall Street education you don't need to have a ton of time what you need is the right Financial education and you need to know where to start hopefully this video will help guide you there if you want some more resources check out my free ebook that I have for you down in the description that way now you can start investing and actually building your wealth I was told time and time and time and time again now somebody who looks like me there's somebody who knows nothing about business because no one in my family is a business person no one in my family is an investor no one in my family is one of these types of people that nobody like me should be able to go out and do it in fact I should just study and

Channel: Minority Mindset

Views: 33,965

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Id: LOTYb7As5p4

Length: 21min 51sec (1311 seconds)

Published: Mon Feb 20 2023