 Good day, fellow investors. Before discussing the seven rules, when it comes to investing your first $1,000, let me first ask you a question. A question that many stock market beginners and those investing their first money in the stock market overlook. The question is do you just want to make a little money on stocks or do you want to become rich to create everlasting long lasting wealth that's going to make your financial dreams come through over the long term. So on one side you have quick money and on the other side you have long term rich and it all starts with the first $1,000. Let me explain. Here is the difference. Making a little money on stocks means buying Tesla's stock at 178 and selling it a month later at 215. This would give you $200 on your $1,000 investment which is a 20% return in a month which is an amazing return. But that's not investing, that is betting. You can get 100% by betting on red in the casino. Many did the same in December of 2018 hoping to make 20% on Tesla. Unfortunately, by now they are down 43%. So if you want to make money trading stocks I can't help you as I don't have a crystal ball. Trading can make you some money but it is unlike it will make you rich in the long term. If you want to become rich in the long term the key is with your first $1,000 investment to develop a mindset, to develop a correct mindset and for that in this video I'll give you the seven rules that I follow when it comes to investing which apply whether you have a million or just 1,000. I'll even give you an example from my portfolio where I invest my thousands every month because I invest 1,000 every month in one portfolio and at the end of the video you will have a clear view of what is important for a long term investing for a long term wealth building. And this is exactly what is also discussed in a great book. A great book that shows how becoming a millionaire is relatively easy if you follow some simple conservative rules and the book is The Millionaire Next Door that describes how the majority of American millionaires is not wearing expensive watches is not having a house at Bel Air is just conservatively living their lives putting money aside investing that money making that money work for them and therefore becoming millionaires over the long term. If we just look at the contents of the millionaire's next door book you can see that it is frugality, time, energy and money the three key things also when it comes to investing rather buying a clunker than buying an expensive car on debt and finding your niche for example and this also means that you specialize in something and the same applies to the stock market. I'll show you my seven rules that are going to help you create a long term wealth building investment mindset. The first rule is make the one thousand dollars you invest work for you what do I mean by that when you invest something you expect some kind of return from that investment it can be in the form of dividends growth business development whatever but the focus is that you know what are you getting in return from a business perspective many invest in something oh beyond meat is just going to grow grow grow and grow and therefore I'm going to sell the stock to somebody else at a higher price the key is is the company delivering profits yes or no long term investors look for long term profits you might make some money on this hot stock you will lose on another that's how it usually goes but if you focus on getting some return in some form that is what creates long term wealth for example amazon investors invested in amazon in the last 15 20 years what did they get in return they got the best e-commerce ecosystem in the world that will give them dividends for the next 20 years also when buffet invested in coca-cola in 1988 what did he get he now gets a 60% dividend yield on his initial investment so that's a huge return and he got growth coca-cola expanding globally so he got something back from that business when you focus on the business and getting something back from the business you will find it much easier to invest your money because you will probably know exactly what you will get in the future from that investment which is not the stock price going up and down when you know what you are getting from that investment the key is to let it compound when you find something that creates value you have to let it compound over time the key when it comes to investing for the long term to become rich is compound interest as would Einstein say compound interest is the eighth wonder of the world he who understands it earns it he who doesn't pays it compound interest is extremely powerful you just need the patient and patients in the right mindset to take advantage of it for example one thousand dollars invested at 15 per cent per year over 40 years becomes 267 thousand dollars that is the power of compounding now you will say yes but it's practically impossible to get 15 per cent per year but that's on a complete portfolio you will hopefully invest one thousand dollars many times over in your lifetime and some of those one thousand investments might even hit 20 per cent per year which is what Buffett did over the last 50 years some will hit five percent but some will definitely do amazingly well if just four investments over your lifetime compound at 20 per cent per year thus four thousand would become five million eight hundred seventy nine thousand in 40 years and let's say you invest one thousand dollars 100 times in your lifetime or in the next 20 years and just four of those 100 investments give you 20 per cent so four percent of your investments that is possible I'm not saying 20 15 20 per cent on the whole portfolio just on four investments just those four investments could make you a retired financially rich person in the long term so if you invest one thousand here one thousand there focus on making saving as much as you can to get more one thousands over the long term you will do really really well because some of your investments you never know which ones will do extremely well the key is that you let them compound over time and that's something key to long term investing number three even more important than investing is saving of course if you don't save up the one thousand to invest then you are not going to have anything to compound as what Charlie Munger say spend less than you make always be saving something put it into tax deferred account over time it will begin to amount to something this is such a no brainer so as he says it's such a no brainer just invest it let it compound over the long term and over time it will amount to something and that something is very likely to be the difference between a weak retirement frugal retirement and a very very rich strong retirement or whatever your financial goal might be number four go in debt with versus with because many investors say simply be diversified by a little bit of everything by a little bit of the whole world index funds ETFs etc i strongly disagree i think that like we have seen with the millionaire next door rules find a niche you find your own niches in your investment portfolio you specializing them you understand the risks and rewards you understand what are the business returns delivered to you and when you learn something like that let's say you learn about 10 niches over 10 years so you learn about one sector in a year that's something everybody can do and you do that and you know then exactly when that sector is cheap or when that sector is expensive and where you should deploy your 1000 over the long term so i am really going on saying focus on a few investments over time check your two free areas that you are specialized in and then deploy the money in the cheapest one or the one delivering the highest value i am currently looking at reads real estate investment trusts then i every month look at some sector so i try to specialize i try to follow what seems rational and not so much follow the markets ups and downs the market irrationality i really specialize in emerging markets because there is high volatility but the businesses are strong and stable there is positive demographics i also like commodities because it depends on supply and demand but then again there is the market that is or in panic or in exuberance shaking those prices up and down which gives me investing opportunities very very often and the more i research the more i know and so the more you do the more you specialize in something the better you know something the better you will do over time because you'll find those great investments that will let you compound your money over the long term now number five buy businesses not stocks a quick example for my portfolio will be discussed but before doing that let's imagine you are a business owner let's imagine you own a hotel in paris as an owner would you constantly watch real estate prices in paris to see whether you made something on a daily basis or as real owner investors do would you just care about increasing the occupancy rate increasing the prices of your hotel making everything work smoothly lower your costs increasing your margins increases your profits buying the next door hotel if there is an opportunity etc so business owners focus on businesses and if you own such a hotel you are fortunate that there is no stock price going up and down on a daily basis so let me give you an example where i invested over two times i think over the last 12 months 1000 of my money in my 1000 monthly added portfolio and that is land in mining land in mining is a miner they mine copper zinc nickel five areas across the world and i think that i'm bullish on copper so that's one reason why i invested in them i think over the next 10 15 years as the world is electrifying you need more copper tesla car uses much more copper than a normal car as those things develop as emerging markets develop i'm very bullish on copper and i think that the well managed company like land in mining will do extremely well secondly the company has been in an investment cycle that will increase production 30 percent over the next one two three years and lower the huge capital required for the investments so at some point in time in the next two years now you have high spending and less production in at some point in the next few years you will have low spending and high production what's the difference the difference is cash flows the difference is higher dividends and the key with wall street is that they focus on the next quarter on the next two three quarters and the current financials which are high investments and lower productions when those investments go down and the production goes up this will become cash flow used to make new acquisitions or higher dividends or buybacks that they are also doing so i'm trying to find something that's good very in the very long term like copper i'm finding something that is overlooked by wall street another mention here they have made a long term acquisition by buying a mine in brazil that has a very very long existing life so they will be mining copper there for the next 20 40 years and the key is okay what will this company look like over the long term and that is rule number six invest for the very very long term because over a decade 15 years things change enormously and deliver enormous returns to your portfolio one thousand dollars can become a lot of money over a decade let me show you just to mention land in mining that the company just discussed had a market capitalization of 14.5 million in the early 2000s and now has one of 3.7 billion so that's a 200 times increase on a more recent example both amazon and apples market capitalizations were below 100 billion in 2009 with amazon being even below 25 billion now those companies are around 900 billion and might surpass the trillion market capitalization very very soon and this is a perfect example of how wall street really focuses on the short term and if you focus on the long term and let your investments compound let those businesses develop reinvest the earnings then you are well ahead of wall street and even a few thousands or a thousand here and there can make a huge difference over the very long term and number seven to finish compare the one thousand dollar you invested and all the money you invest in stocks with your personal finance situation if you need the money you want to invest in stocks in the next month year three five years then don't invest in stocks because if you need the money if you need it for a down payment on a house or on something then you will be scared when you see those stock prices go down and i made a video how real long term investors they love those stock prices going down because they can buy more of something they already own of something good if a stock price goes down if you need the money if you have a timeline when you need the money you will likely sell at the wrong moment in time because the media will be bombarding you with panicking news and something like that and then you will do the wrong thing so don't have a timeline on your money just think okay this money will make me enjoy the dividends 10 20 40 years from now and then if there is an exuberance in the market and you make five 10 times your money quickly even better but keep it as a positive don't count on making money on stocks quickly secondly check your debt if you have high interest debt high cost debt then first pay i don't know your student loan of eight percent your credit card loan of 15 percent your car loan of seven percent because that's a guaranteed return immediately you don't pay your high interest anymore and there is no risk on it and then when you start paying less and less in debt repayments in that interest you redeploy that money into investments and let them compound over time and number three similarly to number one simply don't make your life depend on your investments in an early stage of your life because this is when you accumulate this is when you buy when others are in panic and this is where you have to do the opposite of what the market does so that you can really take advantage of the irrationality in the market so to summarize if you want to develop a long-term investing mindset to create wealth to become really rich over the long term with low risk and high returns please subscribe to my channel the key is always to have a long-term investing orientation 1000 by 1000 by 1000 sounds like a little amount of money but by compounding it with right investment can become a huge amount of money and really be the financial life changer in your life what you are not supposed to do is what the average investor does and here we see 20 year analyzed returns and the right column is the average return the average investor has achieved and that's 1.9 percent because they are buying inexuberance and selling in panic and you have to do the opposite therefore if you apply the rules that we just discussed you can reach extremely high returns over the long term because you will not fall into the traps that the average investor falls into because you will be building a long term wealth making machine that will deliver business returns to you that will allow you to compound those returns and reach your financial goals thank you for watching looking forward to your comments don't forget to subscribe please let me know in the comments how can I help you on your path to becoming a long-term investor thank you and I'll see you in the next video