- "How many millionaires do you know "who have become wealthy by
investing in savings accounts? "I rest my case." So most people out there
are looking to earn some type of return for their money. And we all know that savings accounts are just not a great way
to build your wealth, and that is because interest
rates are at all time lows. And when you account for
things like inflation or the increase of prices over time, you actually end up losing money when you simply put it
into a savings account. So when it comes to investing, there are primarily two
different strategies that people follow in order
to build their wealth. Number one, is investing
in the stock market and number two is
investing in real estate. Now, both of these avenues
have their own pros and cons, but specifically in this video today, we're gonna cover
everything you need to know to get started with investing
in the stock market. Now, there's nothing wrong with either one of these investments. In fact, in most cases,
it makes sense to invest in both real estate and the stock market, which is what I have done myself and other people have as well. But the main problem with
investing in real estate is that if you're looking to go out there and purchase a rental property or a home, it's going to oftentimes cost you tens of thousands of dollars, making this a high barrier
to entry investment. The good thing about the stock market is it is now easier than
ever before to get started and you can literally begin
investing in the stock market with $100 or less. And I'm gonna show you step-by-step, how to do this in this video today. Now that being said guys,
before we jump into things here, I just have to make a disclaimer that I am not a financial advisor, this is not financial advice, and you should always do your
own research and due diligence before making any investment decisions. Also guys I'm anticipating this will be a much
longer video than usual. So if you want to skip
ahead to different sections in the video, check the
description down below, and I'll have timestamps covering the different
sections in this video. But that being said guys, let's jump right into it and cover the first thing you need to know about investing in the stock market. Alright, so the first
thing we have to cover here is what exactly is the stock market. Before you go out there
and invest in stocks or anything out there,
you should understand what exactly it is that
you're investing in and what is the stock market. So the stock market is just
like any other market out there, which essentially means it's a place where people buy and sell things. So the example I like to use is thinking about a flea market. This is where people
who have different items all come together and you can buy things and you can sell things all in one place. So the stock market is very simply a place where people come
together to buy and sell stocks. But what exactly is a stock? Well, a stock is an
underlying ownership stake of a real company and specifically it is of
a publicly traded company. So not all companies out there are public there are some very large
privately owned companies, which means that the general public is unable to buy shares
of these companies. Then you have public companies which have gone through an IPO
or Initial Public Offering, which means average
people like you and me, the general public can
actually purchase shares and own a small piece of this company. So keep that in mind when you're looking at stocks to purchase, even if you're just
buying a couple of shares, you're buying a piece of a real
company and a real business. Now, once a company goes
from being a private company to a public company they are
held to stricter standards. They're required to on a quarterly basis, share earnings statements and other statements with shareholders, as a means of letting investors know how that company is doing. So a lot of companies out there don't want to be so transparent
about their earnings and things like that, so as a result they
remain private companies. However, oftentimes when
companies go public, like this is a means for
early investors and management to actually be able to make
money from that investment because they have this IPO and then shares trade publicly and they're able to sell
a portion of their shares to make money from their
ownership stake in this company. Now, unlike the supermarket like Walmart and things like that, the stock market does have
set hours when it's open, and this is when you're able to basically buy and sell shares of stocks. And the hours for the stock market are 9:30 a.m Eastern Standard Time to 4:00 p.m Eastern Standard Time, Monday through Friday,
it's closed on holidays and that is when you are able to transact and buy and sell stocks
in the stock market. Now, some brokerages which
we'll explain in a little bit do allow you to trade stocks
before the market opens and after it closes. But for the most part, most people are participating
in the stock market during normal market
hours of 9:30 to 4:00 p.m. Now, one thing that's interesting
about the stock market is as soon as the stock market opens the price for an underlying stock or fund starts changing every couple of seconds. And this is referred to as the quote for that particular stock which is essentially what
people are willing to pay for it and what people are willing to buy it for. And this is one of the
most interesting parts about the stock market is that
price changes all of the time based on varying market conditions. It's kind of weird because when
you think about real estate or antiques things like that, the price of that isn't
changing all the time, it's different than
real estate for example, because when you buy a piece of property, you pay a certain price for it and then that's basically what it's worth. You don't necessarily have the
given value of that property being updated every couple of seconds. But you do have that with the stock market where that quotation price
is constantly changing, and this is simply based on
the current supply and demand for that stock. So when there's a demand for a stock and the demand exceeds the supply, meaning more people are
trying to buy it than sell it, that price goes higher and higher, and when there's a supply of
that stock hitting the market, when more people are trying to sell it, less people are trying to
buy it that price goes lower. The best analogy I have for this is is thinking about purchasing gas. We know there's been times
when you go to the pump and you buy a gallon of gas
for two or three dollars, and it seems relatively inexpensive. That's because there's
plenty of gas out there and not that many people
are trying to buy it. Then there's been other times in the past when gas prices are four or $5 a gallon, which is pretty expensive, and that is because there's
more demand for this gas then supply and as a result, that price climbs higher and higher, that same exact principle
here of supply and demand is what controls the stock market and that supply and
demand of a given stock is based on what is going
on with that company, what's going on with that
industry or the market as a whole. So let's say for example, Tesla came out and they said that they had new battery technology that was better than ever before, and all of a sudden a bunch of people say, wow, I wanna buy some Tesla stock, the demand for that is
likely going to be higher and there's not gonna be as many people looking to sell shares of
Tesla in the stock market. So as a result, that price climbs higher and higher and at those higher price levels, people who own shares
made them decide, okay, I'll part with a couple of shares, that way I can make some money. On the other hand, let's say that there's bad news that comes out about a company. Maybe Tesla comes out and they say, hey, our battery technology, you know, is not as far ahead as we
thought it would be right now. And a bunch of Tesla
investors say, you know what? I don't wanna own this
anymore, I'm gonna sell it at that point there's more
people trying to sell shares and get rid of them then there are people trying to buy them. So the price goes lower and lower as people are willing to take less and less money for those shares, but at a certain point,
that price gets low enough and new investors are like, you know what? That's the price I'm willing to pay, I'll buy some shares of Tesla. And this supply and demand is what controls prices in any
given even market out there just like the stock market. And then another huge factor to understand about the stock market is beyond just the individual company news or whatever's going on in that industry, major events in the world can affect the stock market as a whole. So for example, when the global pandemic took over and businesses were closing
and unemployment was going up, the stock market in general
was seeing a lot of supply. People weren't concerned
about owning stocks, they wanted to sell them and
move their money into cash and more people were selling
shares of everything out there then they were purchasing. So as a result of the
entire market went down because there was more
supply and less demand. So you're going to see the prices of stocks that you own change based on what's going on
with that individual company, based on what's going on in that industry, as well as what's going
on with the overall market and what is going on in the world. So in summary here for this section guys, just understand that a stock is an underlying ownership
stake in a real company. And at the end of the day, the price that you're paying
for any given stock out there is based on the current supply and demand, which could be based on something to do with the company itself or the overall market or industry. Okay, so the second thing
you have to understand about investing in the stock market is the difference between
investing in individual stocks and then investing in funds. So we already covered
this in the first section, but a stock is essentially
an ownership stake in a real company. And a lot of people go out there and they purchase individual stocks with the goal of outperforming
the overall market, or getting a better rate of return, than what they could get by
passively investing in funds. But what exactly is a fund? Let's cover that right now. So, a fund is simply a
basket of different stocks, all lumped in together that
you're able to invest in through one investment. Now in the past, a lot of people would buy
something called a mutual fund, which is something that
is actively managed. So you have your money being
managed by somebody else and you're paying fees to them and they take that fee
to conduct research, and decide what to invest your money into. However, over the last couple of years, a lot of people have realized that these actively-managed mutual funds are oftentimes not the best investment due to the fact that the fees
are significantly higher, and oftentimes they are unable to beat the average market returns. So essentially in many
cases with mutual funds, you're paying fees for somebody to try to beat the market and then they're unable to do that. So what has become a more popular
investment in recent years is something called an index fund where essentially you passively own a number of different companies that track an underlying market index. Now, when we're referring
to beating the market or talking about average market returns, what we are referring to
here is the average return from something called the S and P 500, which is a market index. And a market index is simply something that people use as a tool for a benchmark of how the overall market is doing as a whole. And the S and P 500 is simply 500 of the largest
publicly traded U.S companies. So these mutual funds managers would try to beat the
return of the S and P 500 and people who go out there
and buy individual stocks are oftentimes attempting to
beat the average market return. However, if we look at
statistics and data, we know that most people are unsuccessful when it comes to beating
the average market return. So instead people will
purchase index funds where they can passively own an index, like the S and P 500 in a very
low cost and low fee manner, because rather than paying somebody to pick these stocks for you, you just own the entire market and when the whole market
does well, you do well. And since there's not
much active management involved in that process, the fees associated with that investment are significantly lower. So you generally have two different types of investors out there, you have those who are active investors, who want to pick and
choose individual stocks or individual funds with the goal of beating average market return. Then you have the second type of investor who wants to just
passively own the market, they don't wanna pick stocks, they don't wanna worry
about any of that research, they simply want to own the market and not try to beat the market. And of course you can follow
a blend of both strategies, where you may have some individual stocks that you decide that you want to own, but you also have a portion of your money passively invested in
these low-fee index funds. Now, as far as buying these index funds, you can pretty much do
them in two different ways. Number one, you can buy them
directly from the fund company, for example Vanguard, they offer a lot of different index funds. You can go on the Vanguard website and invest directly in these funds through Vanguard's website or the second option which is often easier is to invest in these index funds through something called an
ETF or Exchange Traded Fund. This may sound complicated
guys, but it's very simple. It is simply a way to
buy individual shares of this index fund just like a stock rather than investing directly
through the fund company. And this does carry a
couple of advantages, oftentimes you have higher liquidity, it's easier to buy and sell, and you should check this
with different fund companies, but in most cases, the fees associated with investing through their fund website versus the ETF are oftentimes the same. Alright guys, so in summary
here for this section, most people out there
either follow the strategy of picking individual stocks with the goal of beating the market, or they passively invest
in low-fee index funds, as a means to own the market and generate reasonable returns. In the past, mutual funds
were a lot more popular, but many people have realized that because of the high management
fees and low success rate, they're kind of a lousy investment. Alright, so now that we understand what exactly a stock
is and what a fund is, the next question to answer here is how do you actually buy
and sell stocks or funds? Well, we know that you're doing this by participating in the stock market, but it's not as simple
as just going out there and calling up the
stock market and saying, hey, let me buy some shares of
Tesla or something like that. In order to buy shares of a stock or fund, you have to do this through a brokerage, which essentially is going
to place these orders on your behalf. Now the good news is in recent years, it's become easier than ever before to participate in the stock market. And that is based on lower
fees and zero commissions as well as lower account minimums. So in the past, in order to
participate in the stock market, you used to have to pay
high commissions per trade of anywhere from seven to $10. Every time you place a trade, you were paying that
commission to your brokerage and many of these
companies had high minimums of $500 or $1000 or more. Well, now there's a lot of
commission-free alternatives with no minimum balances and I'm going to discuss a
few of those here shortly. But essentially my best example
to make a comparison here is buying stocks is just
like going out there and buying a new truck. Let's say for example, you wanted to buy a Ford F-150 you wouldn't call Ford up and say, hey, let me buy a truck, you would instead go to a car dealership, a Ford dealership and purchase
your truck through them. A stock brokerage is simply
like a dealer for stocks, you call them up or in this case, you go on your phone and place your order, and they fill those orders for you utilizing the stock market, where people are buying
and selling shares. Now, the good news for you is that the brokerage
industry is very competitive and a lot of these up
and coming brokerages are offering sign up incentives to basically incentivize
you to utilize them, to buy and sell stocks on your behalf. So I wanna cover now
a couple of brokerages that are good for beginners and full transparency here guys, I am affiliated with these brokerages. So if you use my links
down in the description, I may earn a small
commission in the process, no pressure to use those guys, but it is a great way to give back to me for putting this video together and a way to support my channel at no additional cost to you. So the first platform I wanna
mention here is called Webull. They offer commission-free
stock trading with $0 minimums, and they also offer
retirement accounts for free, with no minimums, which is not something you
typically see available from different brokerages. We talked about that sign
up incentive earlier, what they do for you is if you
open up an account with them and you fund it with $100 or more, you're going to get a
completely free stock worth anywhere from $8 up to $1,600 based on a lottery system. Now, Webull is a little bit more advanced with a lot of research tools and data so if you are a complete beginner, it might be a little bit overwhelming. So if you're looking for a
slightly simpler version, my second pick here is Robinhood, which is also 100%
commission-free with no minimums, they're just a lot more
basic and beginner friendly. The only thing you might
run into with Robinhood is after you get started
and you get your feet wet, you might find it's a bit lacking in terms of research tools
and other features out there. Robinhood is by far the
most beginner friendly app out there for buying
shares of stocks and funds and they also have a sign up incentive where if you open up an account with them and you can fund it with
any amount of money, you're going to get one free stock worth anywhere from $2
and 50 cents up to $200. And of course guys, if you wanna get two
completely free stocks, you could sign up Webull
and sign up for Robinhood, take both of those for a test drive and see which platform
you would like better. And then third and finally
is the main brokerage I use, which is M1 Finance. Unfortunately they don't offer any type of sign up incentive, but if you wanna support
me by using that link, that is totally up to you. M1 Finance has a lot of great features for longterm investing such
as dividend reinvestment, they offer free prebuilt portfolios and they offer fractional shares where you don't have to
buy entire shares of stocks in order to invest. It's a great platform overall
for more longterm investing. But if you're looking to trade
individual stocks in and out on a regular basis, that's not the best platform to choose because they only offer two
trading windows per day. Now, as far as actually
buying and selling stocks or funds and the brokerages, I'm not going to get into detailed there because it's gonna be slightly different based on what brokerage that you choose. But what I would recommend is once you open up your brokerage account, whichever one you choose, whether it be on my list or
a different list out there, simply go to YouTube and
type in the search bar, how to buy stocks on blank and fill in the brokerage
that you're using and there's a lot of
helpful videos out there that will walk you through step-by-step, how to buy stocks on
these different platforms. So, anyways guys in summary
here for this section, in order to buy and sell stocks, you have to do so through a brokerage, which is essentially going
to place these trades on your behalf. It's gotten a lot more competitive over the last couple of years, which is good for us because fees have been reduced to basically zero minimums are oftentimes $0 as well and a lot of these companies
offer free stocks or promotions as a sign up incentive to basically get you to invest with them. So now we're going to talk about how you actually make
money in the stock market. And for some people this
may be a no brainer but I've had a lot of people ask
me this question in the past of understanding that you can go out there and you buy shares of these companies or you buy into these funds, but how do you actually make money? And there's two different
ways that you can make money when you invest in the stock market. Number one is through asset appreciation, which is essentially where
the underlying asset, stock or fund that you buy goes
up in value over time. And then number two is dividends, which is essentially cash payments from these underlying investments. And we're gonna go ahead and explain both of these right now. Now, when we're talking
about asset appreciation versus dividend income, we're actually talking about
two different investing styles. One of these is investing for growth and the other is investing for income. And there is such thing as
a blend of both of these, where you have stocks or funds
that have growth potential, or the potential to increase in value as well as income potential
from the dividends paid by the stocks. Also guys, real quick favor here, if you've been enjoying this video so far, please go ahead and drop a
like for the YouTube algorithm and make sure you
subscribe and hit that bell for future notifications of new uploads. So, first of all, let's
talk about income investing or making money through dividends. Dividends are essentially cash payments that a company shares with investors as a means of sharing their profit. So there's different stages
that companies go through. You have the early stages of growth when they may not be profitable, but they're increasing
revenue at a very fast rate that is referred to as a growth stock. But then you have these larger, more well established companies that may not be growing
as fast as new companies. However, they are way more
profitable, way more consistent and they may not have as
much growth potential, but they do make consistent profits and they share a portion of those profits with investors in the form of dividends. Now, most dividend stocks out there are going to pay dividends
on a quarterly basis. However, there are some
that pay monthly dividends, there's also some biannual
and annual dividends and so that is something to be aware of, if you are entering realm
of dividend investing. And it's important to
understand as well here, that companies are not
required to pay dividends. For example, Berkshire Hathaway, Warren Buffett's holdings company there has never been paid dividends because Warren Buffett believes that he's able to earn
better returns for investors by reinvesting in those profits himself. However, for a lot of these
well-established companies like Coca-Cola, or 3M
and these large companies that don't have a ton of growth potential paying these consistent
quarterly dividends is a way to keep investors around, giving them a means to earn
a return on their investment. So when you own a dividend paying stock, if it's a quarterly dividend, there's a set amount of money you're going to receive
every single quarter based on how many shares that you own. So, if for example, a stock paid a five
cent quarterly dividend and you had four shares of that stock. Well, every quarter you would
earn 20 cents in dividends from that particular stock. And the way that most people keep track of how much they're earning from dividends is something called the dividend yield. And that is simply the
percentage you're earning back based on the price
you're paying per share. So for example, if you
paid $100 for a given stock and you were able to earn
$5 per year in dividends from that stock based on the current price and the current dividend payment, well, that stock would have
a dividend yield of 5%. And while we're talking
about dividend yields here, typically this is going to be
somewhere in the neighborhood of 2% to 5%. So you're not oftentimes going to find safe dividend investments out there with yields of eight or 10 or 12%. You may see this sometimes
with stocks out there. However, it's oftentimes a bad sign and dividends are never guaranteed, companies can cut or eliminate
them at any point in time. So, just understand that a safe dividend is typically around two to 5%. If you're looking at stocks
with double digit dividends, that is almost always a red flag and something you're
going to want to avoid. So that is the income side of investing or making money through dividends. Now let's talk about the growth side or making money from asset appreciation. The most basic example I can give you here comes back to real estate, which is where many people have seen this type of asset appreciation. So let's say for example, you buy a house for $200,000
and then 10 years later, you go to sell that house
and you sell it for $250,000. Well, in that 10 years that
you owned that property, that asset appreciated
in value by $50,000. Well, the same exact thing can happen with stocks and funds that you own and it all comes back to the
basics of supply and demand that we talked about in the
beginning of this video. For example in 2020, we have seen a lot of demand for Tesla stock and Amazon stock. And because there is so much
demand for these shares, the asset has appreciated in value because the share price
went from being lower to now being much higher. On the other side of the coin however, we've seen the exact opposite take place with some companies that
are falling out of favor, based on the global
pandemic that we saw here, the demand fell sharply for stocks like Macy's and American Airlines, as many investors were
selling these stocks. So when you have a lot of
people buying into a stock or an industry that share
price climbs higher and higher, and that's how you make money through that asset appreciation, maybe you buy a stock at
50 and you sell for 60, you have $10 of capital gains, and that is the asset appreciation. On the other hand, stocks
can also go down in value where maybe you bought a share of an airline
stock at $40 per share and based on the overwhelming supply of new shares hitting the market now it's down to $20 per share so you've lost $20 per share that you own. Now, the important thing
to understand here is that in order to actually make
money from asset appreciation or the growth of a stock or fund, you actually have to sell it. You can't make money just
from that going higher, you have to sell that
stock to somebody else and lock in that capital gain. So essentially, let's say for example, you had a stock you
bought at $30 per share, and now it's at $40 per share you have made $10 per share on paper, but in order to actually
lock in that gain, you would have to sell
that stock to somebody else at a price of $40 per share
and whatever the difference is between what you paid
and what you sold it for is your capital gain or capital
loss on that investment. However, the exciting thing
about income investing is that you don't have
to sell that investment in order to make money from it because just by simply
owning dividend stocks or funds that pay dividends, you're able to earn that
quarterly or monthly dividend or whatever the frequency is just because you own that stock. So you're actually rewarded
by owning that stock for the long run, and you don't have to sell
it in order to make money. Now, as far as dividend investing goes, the strategy that most people follow, especially when they are young, is reinvesting those quarterly dividends back into the issuing stock. So let's say for example, you owned a bunch of Coca-Cola stock and they paid out their quarterly dividend and let's say you made $50 in dividends. Well, rather than taking 50 bucks and going out and buying
dinner or going to the movies, you can take that $50 and put
it back into Coca-Cola shares, which will allow you to earn
more dividends in the future. And this is a phenomenon
referred to as compound interest, which is where a lot of the gains from the stock market come from. You don't take your money and run, you reinvest that money
back into that stock and you rinse and you repeat this quarter after quarter, year after year and this is where you're able to build large and serious massive
amounts of wealth for yourself by doing this for a very
long period of time. So back to the S and P 500, or essentially this benchmark we use to track the overall stock market. When we're talking about
the overall average return from the stock market, we're looking at collectively
these 500 companies, how much they go up in value
collectively altogether, or the asset appreciation as well as how much these companies
collectively pay in dividends and when you combine these two together, that gives you your annualized
return from the S and P 500. And based on the S and P 500 looking at the last
100 years of data or so we know this is an
average return of around eight to 10% per year, which is a realistic expectation to have when investing in the stock
market for the long run. Now in the short term year to year, you're not typically going to
see an eight to 10% return, you might see one year
where it goes up 15% and then another year where
it goes down 5% or 10% and that is because there are bull markets and there are bear
markets or periods of time when stocks are going up
or stocks are going down. But when you invest for the long run and you look at many years of data, that is the average typical return that you see from the stock market. So for example, we saw our most recent stock
market crash or bear market earlier this year in 2020, which was immediately
followed by a bull market where the market went
up for a period of time, and you have to be
comfortable and understanding of these hills and
valleys within the market. But understand that over the long run, looking at a long span of time, the stock market tends to go up in value as a way to generate returns. If you just simply leave your
money in your savings account, you're going to lose
money every single year. The stock market is by no means a guaranteed way to make money but when you look at it over the long run, it does generate wealth for investors and it has made a lot of
people rich in the process. So, anyways guys in summary
here for this section, you make money in the stock market, either from dividends or
income or asset appreciation or growth of the underlying share price. There are some companies out there that are just fully in growth mode, where they don't pay any dividends because they're not profitable. Then there's companies that don't really have a lot
of growth potential, but they pay high dividends because they are very profitable. Then you have companies in the middle that offer a blend of growth potential and income potential. We know that returns on
average in the stock market, looking at the S and P 500 or
around eight to 10% per year, but you can't expect to
see that every single year because the market doesn't
just go up in a straight line. And when you're looking at
investing in the stock market, most people including myself would agree that money is made by
investing in the long run not so much in the short term when the market is unpredictable. So before we get into some
different stocks and funds that are beginner friendly, the last thing I wanna cover here is the importance of something
called diversification, or very simply not putting all
of your eggs in one basket. So most people out there
achieve diversification by investing in stocks, as
well as bonds and real estate, and maybe potentially
other things out there, like cryptocurrency,
precious metals, antiques, and different uncommon assets like that. And the idea here is you don't
wanna have all of your money in any one given asset, because as we have talked about already, the stock market has
times when it's going up and times when it's going down and you don't want all of
your money in one asset, because when it goes down, your entire portfolio goes down. So let's say maybe you
have some money in stocks and you have some in real estate and you have some money in bonds. Maybe the stock market is going down, but the real estate
market is pretty steady and maybe the bond market
is going up as a result. You wanna have your money
doing different things at different times, and this is achieved
through diversification. So you can diversify
across different assets like we just discussed but
within the stock market, you also wanna make
sure you're diversified across different stocks
and different industries. So it would not be wise to go out there and put all of your money into
Tesla stock or Amazon stock or any one given stock because if something
happens with that company, you're not well diversified, and you're going to
potentially take a big hit. So a general rule of thumb
that I like to follow is never put more than 20% of
your money in any one thing, whether that be a particular
stock or in cryptocurrency. I like to personally have my money spread out across all
kinds of different assets, that way I'm in different markets, and I'm not gonna be heavily affected if one market does poorly and the same philosophy
with the stock market, I would never put more
than 20% of my money into one given stock. Now, when you're first getting started with the stock market, you probably don't have a
ton of money to invest with. And so diversification is
not as important early on, but I would say once you start investing a couple of thousand dollars
maybe $5,000 or more, that's when you wanna think
about spreading your money out across different stocks
or different industries, that way you don't have all
of your eggs in one basket. Now within the stock market, there's a couple of different ways that people achieve diversification. Number one is different
sectors and industries, or essentially investing in
different areas of the economy. Maybe you have some money in tech, but you also have some money in financials and you have some money in industrials, you're putting your money in different segments of the economy. And so the idea here is if there is some kind of economic event that affects a certain industry, it's not gonna drag down the
entire market as a whole. Maybe, you know, tech
gets hit pretty hard, but industrials is doing
pretty good during that time. So spreading your money
out across different business segments is one
way that people diversify. Second of all, is diversifying
across different locations. So not only investing
in just the U.S market, but investing in global markets as well. Third of all is investing
in different company sizes. So you're not just investing
in small companies, you're also in medium and
large companies as well. And then finally, like we said earlier, investing in different
assets is another way where maybe you have 80%
of your money in stocks and 20% in bonds, maybe you have some money
in real estate as well. For now if you're brand new to this, and you're just playing around with a couple of hundred dollars, don't stress out too much
about diversification but once you have a couple
thousand dollars invested, keep this in the back of your mind and think about how you
can spread your money out that way you don't have all
of your money in one place. Alright guys, so the last thing I want to cover in this section here are a couple of beginner
friendly stocks and funds that you may want to do
your own research on. Now, again, I already stated
this in the beginning guys but, I am not a financial advisor, I'm not telling you to go out
there and buy these stocks, these are not recommendations to buy, I'm simply pointing you
in the right direction and I'm gonna share with
you a couple of stocks that I own in my investment portfolio. Now I am a firm believer in the fact that you shouldn't invest in
companies that you know, and that you understand. Most of the best investments I have made are based on me buying stocks of companies that I actually use the
product and I like the product. For example, I'm a big
fan of Apple products that is a stock in my portfolio and that is a stock I
have done very well on and it's because of the fact
that I love Apple products, so do a lot of other people out there. So you don't have to
make it super complicated in fact you shouldn't, I would instead look at
what things that you like in your world and in your life, and what are your favorite companies and think about whether or not you would want to invest in them. However, that being said if
you're looking for some ideas, not recommendations here
are a couple for you. First of all, Coca-Cola that is a stock in my dividend portfolio. Warren Buffet is a big
investor in this company. They're probably the world's
most recognizable brand, they're time-tested, they are on the lower side of risk because of how long they've been around and they are a consistent dividend payer. Coca Cola, you really can't
go wrong with this stock as a beginner in terms of
just getting your feet wet and owning something that's not going to
massively fluctuate in value because this is a very durable
time-tested investment. If you're looking for
more of a growth play, Amazon may be one to consider based on this current trend
shifting towards E-commerce we've been seeing over
the last couple of years, which has been accelerated
by this global pandemic. I have owned Amazon
numerous times in the past, I've done very well with this stock, they're not a dividend payer because they're still in growth mode, but I think they are poised to benefit based on this ongoing trend we are seeing with the growth of E-commerce. After that, on my list here is Apple. And this to me is a good blend
of both growth and income because they are a dividend payer, they pay a small dividend. However, there's also still
a lot of growth potential with this company based on the fact that they are expanding
into new technologies and they're on the cutting
edge with their devices. So Apple is a stock where you
can earn some dividend income while having the growth potential that is why Apple is a large component of my own investment portfolio. Next up we have Procter and Gamble, they make a lot of
different household products that you probably used this morning without even knowing it. They have been paying
dividends for 130 years and they've been growing their dividends year after year
consecutively for 64 years. If you're looking to get
into dividend investing, you really cannot go wrong with a stock like Procter and Gamble. And the last doc on my list here, which you really can't go wrong with as a beginner is Disney. Now, they have been hit hard recently because of the closure
of their theme parks, but I still think it's
a solid pick overall and this is one of those weird companies that doesn't pay a quarterly dividend they actually pay dividends
two times per year. But in terms of a safer and less volatile or stock that moves up
and down investment, Coca-Cola, Disney, you know, you really aren't going to
get much better than that as a complete beginner, because when you're
brand new to investing, you don't wanna be taking risks, you don't wanna buy something where the price changes all the time it's gonna stress you out. Start with something simple
that's easy to understand and maybe even a product
that you know and love like in my case investing in Apple. And then as far as index funds go, I have three examples here you may wanna do some research on. First of all, probably the
most popular one is the VOO, that is the Vanguard 500 Index fund which is one of the most inexpensive ways to own the S and P 500. So when you buy VOO, you own a small piece of 500 of the largest publicly
traded companies in the U.S. So you have the potential for
growth from those companies, as well as the income through dividends. So collectively whatever
dividends are earned from those companies in that
group that paid dividends, those dividends are paid
out on a quarterly basis from this fund. And as far as fees go, the expense ratio for
this fund is just 0.03%, which is pretty much as good as it gets. You may find some that
are lower out there, but we're talking about
a very minuscule fee. Another fund tier is SCHV, that is the Schwab U.S.
Large-Cap Value ETF where you own a diversified collection of large U.S companies
with reasonable valuations. So you're investing in the big giants, the Titans of the United States and this is a another one that has a lower expense ratio of just 0.04%. And then lastly we have QQQ, that is Invesco QQQ which
tracks the Nasdaq 100. This is a tech heavy fund that mostly invests in
big technology names like Apple, Amazon, Facebook, Google. So this is pretty much
a diversified investment focused on tech. So a lot of young people like tech, they want to be investing in that, this is a way to do it
in a diversified manner. However, the expense ratio is
a little bit higher at 0.2%. So, anyways guys that's
gonna wrap up this video, thanks so much for sticking around. If you made it to the very end, leave me a comment down below, I'm always curious how many
people watch the entire video when I do these type of marathon videos. If you feel like supporting the channel for putting this video together, feel free to check out those links down in the description below and
grab a couple of free stocks. I also have a great
article over on my blog Investing Simple which would
be a good compliment to this, which is a step-by-step guide on investing in the stock market. For beginners I'll put a link
to that down below as well, but thanks so much for watching guys, make sure you drop a like,
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