 Let's talk about investing money. Now, I know some of you are like, what are you talking about? I don't have any money to invest. And others are like, oh, great. I'm glad George is gonna give his perspective on investing money. But of course I have to say, I am not a financial advisor. I was not trained by one. I don't play one on TV. And I am simply sharing with you my passionate amateur perspective from having been an active investor over 10 years and having studied this stuff. So this is how I invest my money. And I know people who study the stuff have great passion for this versus that. Crypto versus stocks versus life insurance plans. I mean, people have a lot of passion around the stuff. So I do welcome your comments below because you I'm sure have studied other things. Those of you interested in this topic versus me. Now, first of all, I wanna say, when are you ready to invest, to get into investing and invest your money? And basically I would say, as soon as possible. And I would say ideally decades ago, if you're like, I don't know how old you are, but as early as possible because here's an interesting statistic or fact. If you had invested $1 in your 20s, by the time you retire in your 60s, about 40 years later, that $1 would have turned to $16. Okay, let's say you were lucky and had, this is not true in my case, but let's say you were lucky and had some inheritance and you invested $10,000 in your 20s and didn't do anything with just invest 10,000 in passively managed index fund, which is really easy. I'll talk about that. Super easy to do. You don't touch it. You don't do anything with it and you just wait for 40 years. You would have $160,000. Again, if you had were somehow had a huge windfall and you had $100,000 in your 20s and you just did nothing and put it in a passive thing, so for 40 years, you would have 1.6 million in your 60s by doing nothing other than just letting it sit there and letting it grow on its own. This is assuming, and this is actually based on historical stats, that you just put it in an index fund, which is basically invests in pretty much all the stocks. You just put it, you diversify, put your eggs in many baskets instead of one basket, but you put it in an index fund, a single fund which invests in everything. The historical returns have been around 10%, okay? Now, given inflation, let's bring it down to 7% net anyway, but that's been the historical returns for decades now on average. And so when to start investing as soon as possible. Now, the other thing I wanna say that's really important in this video is that if you start following financial guidance, you start subscribing to financial newsletters or following financial bloggers or social media people, be very careful because you have to think about this. Their incentive is to keep your attention coming back again and again. So they're going to say things like this, imminent market conditions. Oh my gosh, you better do what I say and move your money this way or that way. You better divest from this and then invest in that. And why? Because they wanna keep your attention and I wanna share my screen and show you how often experts have been wrong, okay? So actually, you can Google this yourself and basically study it, but this is not gonna be a perfect Googling. I didn't have a ton of time to prepare for this particular video, but basically economists, how often have economists predicted stock market crashes or stock market rallies or financial crashes or rallies? And basically, if they're predicting the very next quarter, they're pretty good, they're fairly accurate in predicting the next quarter, but then they're less precise in further forecasts, okay? And according to this other website, market crashes do not follow predictable patterns. Do not follow predictable patterns, okay? And interestingly, the average individual investor estimates a 20% chance of catastrophic market crash within six months. What this means is that the average person, it's out of every 10 investors, 20% are guaranteed pretty much to say, oh, there's gonna be a crash in six months. In other words, it's not predictable and they're always gonna be, it follows more personality type. If you're more pessimistic, you're always gonna think there's a market crash coming. If you're more optimistic, you're gonna think opposite. Oh, there's gonna be a market rally coming. Now, I wanna also just say to make it simple for you, having been, like I studied this stuff for more than 10 years and been actively investing for 10 years, I'll tell you this, you're going to save yourself a lot of money and a lot of stress and make a lot more money in the long term, in my opinion, if you simply, and I said this in the beginning of the video, invest in a passively managed index fund, what does that mean? Like I said, it means that you are putting your money into a company like Vanguard or Fidelity, those are two very common ones or Schwab, that give you what's called a broad-based index fund that says, hey, for every dollar you put in with us in this particular fund, we're going to invest that in 500 companies or 2,000 companies. So you're not putting your eggs just like, well, Amazon's doing really well or Apple's doing really well or NVIDIA's doing really well. But if you look at long-term, it's always like this, okay? I mean, some companies, sure, they're very lucky and well-managed, sure, but they do well for decades, but that's extremely rare. And there are always, always, always, always going to be unknown companies. I mean, NVIDIA, who knew 20 years ago that NVIDIA would do so well or Tesla or Apple or whatever, okay? It's, if you look in decades, which is what you probably need for your retirement, okay? If you look at 20 years, it's really hard to predict the winners. And some winners come out of the blue, most winners actually come out of the blue and you'll miss out on the growth of those startup companies if you don't invest in all of them. And I want to show you one more thing, very important on screen. This video is fairly rambly and I apologize for that, but I'm basically giving you the best of what I've learned after 10 years. And I do believe if you consider this advice, you probably will save yourself tens of thousands and probably make tens of thousands over the years. But let me go and show you my screen one more time here. Let me go ahead and search actively managed funds versus index funds, historical returns, okay? All right, so let's take a look at this. Generally, when you look at mutual fund performance of the long-term, you can see trend of actively managed funds underperforming the S&P 500 index. So if you don't know, S&P 500 index is the current benchmark of the 500 largest companies basically in the world. I think S&P is just U.S. based companies, I believe it's U.S. based companies, but most of the world's largest companies are U.S. based companies still at this time. That's gonna change in coming years, but a common statistic is that the S&P outperforms 80% of mutual funds. Let's get really clear on what we're saying here. Okay, so mutual funds are managed by the smartest, most expert financial people in the world, right? I mean, a mutual fund that has billions of dollars under management is not gonna hire some random person. They're gonna hire the most educated, the most proven managers to manage all this money, hundreds of millions of dollars at least, usually a mutual fund. And 80% of those smart people underperform just putting all your money in the 500 largest companies and just letting it stay there. This is insane. Why do people still follow financial experts and put their money into what sounds like, this is gonna be really good fund. This invests in the 10 best tech companies. I don't care if you invest in the fabulous seven or the whatever they call it. Amazon, Apple, Facebook, Meta, NVIDIA, Tesla, but I don't care. No matter how you pick stocks, you're still going to most of the time lose. Now, if you're gonna give me stories, no, my cousin invested in these 10 companies in an outperformed, I know you're gonna give me isolated stories. I'm talking about trends and large studies which show that if you get lucky, sure, you get lucky picking these 10 companies or these five or these 25 companies or whatever, you got lucky. I'm not willing to bet my money on luck. I'm willing to bet my money on science which shows that 80%, and you say, George, why don't we just invest in the 20% the ones that beat the S&P 500? Good luck picking, that's the point. Nobody knows. Even the financial experts, if they knew, obviously, if I'm a financial expert, I'm managing money, of course I'm gonna be wrong. But why wouldn't I invest in the 20% best performing? That's the point. Like even the experts can't tell which are going to be the 20%, which are gonna be the 80% that underperform a passively managed index fund. So I'm gonna end this video because it's going too long. And I'm gonna write a blog post that gives you more resources to look into all this, okay? Wherever you're seeing this, the blog post should be below this video. And right now I'm recording it live so I haven't put it up yet, but it will be below this video at some point soon when most of you who are seeing this. So let me just give you a shortcut. Now, again, I have to emphasize that I'm not a financial advisor. I'm a passionate amateur. I'm a hobbyist and I do this with my own money. You need to make your own decisions. You need to take what I say as one data point out of many that you look at and then make your own decisions because it's your financial future. I can't be responsible for that. But I'm gonna tell you how I manage my money, okay? Very, very simple. And I think I have a pretty good sense of it. Like I said, I have a pretty good intuition, I think for money, because I've done pretty well for myself over the years. And so this is where I put my money. 70%, okay, I'm gonna Google this so that you can look at it. I put 70% of my money in VTI. This is the Vanguard Total Stock Market Index Fund ETF, okay? If you look at the historical, the earliest, they launched it in 2001, apparently. And gosh, if you had money with them back then, now you would have five times the money 20 years later, five times the money 20 years later, 50 to 250, right? If you had invested at the very height of the 2007 before the market crash of 2007, 2008, right? Even if you had invested at the height of all the mania, you still would have more than double your money today. If you had invested at the height of the 2021 stock market hype, you still would have, okay, you still would have more money today, just a few years later. And obviously, if you had invested during the coronavirus crash, when everyone is panicking, is when you should be investing in the stock market. This is an age-old rule that keeps proving to be true for decades. And I should show you, by the way, stock market historical returns. I just wanna show you images, okay? Well, let me show you all, okay? From 1926 to 2022, the S&P returns were from eight to 12%, only seven times. Other notable times, oh, let me actually, oh, sorry, the average annual return has been about 10%, average annual return about 10%. If you look at images, the same thing. Stock market returns from 1870 all the way to today. It just keeps going up. It will always have downturns. It will always have scares. But the thing is, it will just keep going up. You can trust, why? Why is that true? That the stock market always goes up in the 10 year to 20 year periods, always goes up. You'll always have more money and usually significant more money, outpacing inflation for sure, 10, 20 years later. Why is that? It's because human ingenuity, you can bank on it. You can bank on human entrepreneurship. People will always figure out ways to outperform their competitors and bring more value to their shareholders because that's their job, okay? So I invest, let me finish up by saying, I invest 75% of my money, or 70% of my money here. I invest 20% of my money in the ex-US. The ex-US is basically all the stocks outside of the US. Vanguard is a well-known company that is passively managed. They are financially or legally bound to do good for their members, investors like us. They don't make money off of their individual investors. They're actually co-owned, it's like a co-op, owned by all the individual investors. Those of us who put money in, we are like a partial owner of Vanguard, okay? So that's how it works. So I put 20% of my money there and I put 5% of my money here in Bloomberg, all commodity. So it's like, I'm hedging a little bit on commodities doing well in the future, but 70% in VTI, 20% in the ex-US because the ex-US has not done as well as American stocks, but over decades, there's good hope that China and Taiwan and Europe and Australia and other companies outside the US will do well in the future. And I think that's good to bank on. Again, this is how I, and I have to say one more thing before I go, okay? One more thing before I go. The other, no, the percentages I gave you are how I'm investing my money in the long-term. This is my bet, this is my gamble, okay? And it's always a gamble whenever you're investing. It's always a gamble, but I'm taking a very conservative gamble. I'm saying, I believe that the basket of US companies are gonna do well in the future and in some percentage, the basket of international companies will do well in the future and then commodities a little bit. So 70% VTI, 20% V ex-US, 5%, am I getting the percentages right? No, I'm sorry, 25, sorry, 70% VTI, 25% V ex-US and 5% BCD, that's how I'm allocating things. I don't buy bonds because in the long-term, now as I get closer to retirement, I will take some of my money and put it into bonds because bonds are more safe in a five-year period when I need to take money out. It doesn't do well in the long-term, but it's safer. It's less up and down in like a one to five-year period when I need to take money out as a retiree, okay? But right now, I still have at least 25 years of work left ahead of me. So I'm putting, if I have a 20-year window, I think stocks are the way to go. And the last thing I'll say is this, I just moved to Mexico six months ago and I am actually starting to move a lot of money to Mexico because the Mexican Bank CD, Certificate of Deposit, which are guaranteed instruments, are 10% here in Mexico versus the US is 5%. Here it's typical to get 10% here. And historically, when I looked at it in almost all periods, Mexican CDs have been double what US CDs are. So I've got a lot of my money in the stock market like I told you, but I'm now moving a bunch of money, start going forward into Mexican CDs because I'm here in Mexico and I'm gonna try to live off the interest if I can from CDs. So that's another huge financial move is try to move to a low-cost country, low-cost country that has high guaranteed savings rates if possible, because then you make your money go a lot further by not having to live in a high-cost country. So I recommend that if at all possible. And I hope this is helpful, it's a bit rambly, but I have, like I said, given you a lot of my mistakes I've made over the years into this one video, I wish I watched this video 20, 30 years ago and follow the advice because I would be much better off and probably retired by this point, but I still am working and I need to work to make sure that we can live off interest fully. I think we're getting pretty close with the Mexican CDs, but yeah, anyway, I hope this is helpful and I look forward to seeing if you have studied investing and stuff, feel free to comment below and share with us because we're all, I mean, some of you watching this are financial planners and you can disagree with me, but I'm always like, well, financial planners are paid, the incentives are sometimes not stacked in favor of the average consumer and I'm not taking money as a financial planner. So I'm just telling you, I'm not making any money off this video, well, maybe YouTube, but this video goes viral might make some money off ads, whatever, but I'm telling you how I'm actually investing. So I hope this is helpful and thank you. Thank you for watching and look forward to seeing your comments below.