 2020 has been one of the weirdest years I've ever seen since I started investing. Start off in February crashing to levels we haven't seen in years and then the market quickly recovered right after to make all-time highs. And I've been getting tons of comments asking me, Shane, I see how much you're making investing in the stock market. How do I get into this game? How do I do it step by step, etc. So here I am making this video, I'm going to be teaching you how to invest in stocks even if you're a beginner in 2021 and beyond. And in this video, I'm not going to be talking about day trading and how much money you can make investing in these three secret stocks. And all you have to do is join my signal group or sign up to my $1,997 course. No, no, no, no, we're not playing any games like that. There's no course here. There's no upsell. And the truth is good investing is relatively simple. And that's probably why nobody makes courses that promote the best ways of investing. Okay, so I'm going to teach you what I wish I knew when I started. So instead of spending money on all this stuff that you don't need, you can start making passive income from your investments. In full disclosure, I talked about this in a few videos made me extremely uncomfortable. But I talked about, you know, how much I've been making in the last few months. Specifically, I talked about December in January of 2021. And each month, my portfolio went up by over $25,000. And of course, these are freak months because we are in a bull market right now. So I don't expect these really good months to happen in the future. But I've designed this video to kind of be like a mini course where I highly recommend watching until the end, because I'm going to reveal pretty much everything you need to know about investing. And with the strategies that I'm going to reveal in this video, you will be able to beat literally 99% of investors. And that's scientifically proven. And I'm not saying that as a joke, this has literally been proven to be the best way of investing. They've done lots of research on this. And it's kind of simple. It's really stupidly simple. And so that's why you probably don't hear that many people talking about it. And in this video, I'm going to prove it. So just stick around until the end. And also, if you appreciate videos like this, where they're almost like mini courses, hit that like button, let me know, and I'll make more just like it. So first of all, let's start at the beginning. Let's get into it and start talking about why you should invest in the first place. So this is a question everybody has to answer for themselves. Why should I spend my time and money investing when I could go out and have a good time with the money? Or I could go buy Gucci shoes and Versace glasses and all kinds of other stuff that you don't need. And the simple answer is to build your wealth and more importantly, to buy freedom. Okay, so you've probably seen some of the older people in your family talking about this before. They probably say, you know, all back in my day, a burger was like 25 cents. And now it's like $5 for the same burger. What's going on? Well, the reason for that is because of inflation. So the value of money is going to go down over time. So if you're just keeping money in your bank account, for instance, if you're just like saving money, or maybe you don't trust banks, right? You withdraw the money and you keep it under your mattress, it is actually losing value. It's probably losing like somewhere between one and 3% per year depending on how much money the government is printing, which right now is quite a bit. So the benefit of investing rather than just saving money is you can make your money increase in value over time rather than losing value. Even if you're putting your money in a high interest savings account, which I remember last year before, you know, all this situation happened with the pandemic, there was one bank account that was giving me 2.57% interest, which is fantastic. But that's still barely keeping up with inflation. And right now, I think the best one is offering about one to 1.5%. Now on top of beating inflation and making your money more valuable over time, what's even more important is the fact that you're earning compound interest. Now you've probably heard about compound interest before. Einstein says it's like the eighth wonder of the world, for instance. And I feel like I have mentioned this at least like 10 times in my videos before. So if you've been watching this channel, it probably feels like I'm beating a dead horse. But very simply, if you put something like $500 a month into your investments over like a 30 to 40 year period, you are going to end up a millionaire. You're going to be able to retire. So for instance, if you put $500 a month into a Roth IRA, which would be about $6,000 a year, and a Roth IRA is a tax advantage retirement account that is probably going to earn somewhere between 7% and 8% per year compounded, you will end up a millionaire. You will have enough money to retire just by doing that alone. However, it's going to take a very long time. So you have to be patient. If you want to be a little bit more aggressive with your investments, you can retire a lot earlier than the average person. So in the case of the Roth IRA, for example, you would only put in around $300,000 or so. But by the time you're ready to retire, that would turn into over 2.5 million. All right. So in other videos, I've gone over in detail how compound interest works. I'm not going to do that in this video. You can check out other videos on my channel, but I think you get the point here. So next, let's talk about what exactly is investing. Let's define it. So there's so many different types of investing. So how do you pin it down and define exactly what it is? So basically you're putting your money into an asset with the goal of that asset generating value. So generating more money over time. So real estate, for example, someone might put $100,000 in a house and maybe 10 years later, it's worth $200,000. So it's already doubled in value. Same goes for investing in a stock or a share of a company. And that's basically just a small piece of the company itself. So when you invest in a share, you own a small part of that company. Sometimes companies will actually pay you for investing in them in the form of dividends, which they pay out monthly, sometimes every three months, six months to a year. And the big reason for doing this is because you want your money to work harder for you than if you just held it in cash. You want to think of your money like little soldiers that are going out and bringing back more money for you. So they're working for you and you're not having to actually do anything. And this is called passive income. Now when you first start investing, you're probably only going to be making like, I don't know, 30 cents a day or something like that from passive income. But eventually you can get to the point where you're making really good money from it. And there's actually an entire movement on the internet called the fire movement, financial independence retire early that is built around this. These are normal people who have relatively normal jobs that just live frugally invest as much as they can. And a lot of them are able to retire by 35 or 40 instead of the usual, which is around 67. So the next question is going to be when should you start investing? And the answer to that is your parents should have opened up a custodial account for you the day you were born pretty much, right? So the best time to start investing was as soon as you possibly could like it was yesterday, 10 years ago, whatever. And so the best answer to this is you need to start investing as soon as you possibly can. So right after you watch this video all the way through, right? And right after you smash the like button on this video, go ahead, you know, go to wee bowl, something like that and start investing. The great thing here is investing used to be very difficult to get into. So it used to be, you know, you'd have to have like $5,000, $10,000 minimum just to open an account. And then you'd also have to meet all these other stipulations. Thanks to a lot of, you know, really cool inventions, fintech apps, for instance, that have popped up like Robin Hood, Wee Bowl, etc. It is incredibly easy to start investing. The one that I personally recommend, if you're a beginner, you've never invested before is going to be Wee Bowl. And there is a free link down in the description, you can get up to $1,800 and four free stocks just for signing up and funding a $100 account. But there's also lots of other companies you can use. I made a video last year about like the best, you know, companies in my opinion, Acorns is really easy. You could go with Robin Hood, although there was a controversy with them, SoFi Invest, Public, there's just a ton of great companies out there that you can get started investing with. Once you're a little more advanced, in my opinion, the best companies are probably going to be Fidelity, Vanguard, Charles Schwab. Now there is one thing that you should technically do before you start investing. Okay. And that is make sure to save up an emergency fund. So this emergency fund should be cash that you actually do hold in your bank, hopefully in a high interest savings account. And it needs to cover at least three months of your expenses. And the reason for that is because you don't want to max out your credit cards or have to take out any payday loans just to cover your day to day expenses when an emergency happens. However, there are some people who argue on the internet that you can put all of your money into a tax advantage retirement account like a Roth IRA or 401k instead. And so the reason for that is because normally if you took money out of those tax advantage retirement accounts early, you would get penalized for it. So you generally don't want to do it. However, you can apply for hardship withdrawal, which would take the penalty away. And a lot of the time you're going to get it. But overall, I personally don't do that. I have an emergency fund that's around six months or so. And the big reason that I do that is mostly just for peace of mind. So the next big question we're going to ask is how much should you invest? And the truth is, especially if you're a beginner, this is going to be different for everyone. And it's going to really rely on three main factors. The first one is going to be goals. The second one is going to be capital. And the third one is risk tolerance. So first of all, let's start with goals. Maybe your goal is just to be able to retire when you're 65 or 67. In that case, you probably don't need to invest all that much. You should be able to just invest in a 401k, a Roth IRA, maybe a little bit on the side, maybe buy a house, something like that. And you should be good to go. Let's say your goals are a little bit different. You want to be able to retire at 65 or 67. But you also want to be able to travel around the world. So you want to have a lot of freedom. Well, in that case, you're probably going to need a little bit of extra money to fund your travels, especially if you want to travel when you're young enough to actually enjoy it. And so you would want to invest a little bit more aggressively. Let's say that your goal is to retire by 40. So you want to have enough money to retire by 40 and just live off of your passive income. In this case, you do have to invest relatively aggressively unless you're, you know, a doctor or something making $500,000 to a million dollars a year. Most normal people are going to have to invest really aggressively. And so you're probably going to have to cut your expenses, live a relatively frugal lifestyle, and then try to invest somewhere around 40 to 50% of your income. You also might want to look into side hustles or starting a business on the side, or just trying to get into a career that pays more. Let's say you're extremely aggressive. You're like an 18 year old watching this and you want to retire at 25. Well, in that case, investing in the traditional way probably isn't going to get you there. And so you're going to have to be much more aggressive about it. You're probably going to want to start your own business as well. And even then your chances of success are going to be relatively low, but that doesn't mean you can't do it. It's still completely possible. And later on in the video, I'm going to go over some of these other opportunities that you could look into. Okay, so those are the three things, you know, you start with goals, what's your goal? And then you think about, okay, how much money do you need in order to achieve that goal? You know, how much money would you need to just live a very frugal lifestyle and retire maybe when you're 40, or how much money you're going to need to travel the world, live more of an extravagant lifestyle, figure that out. Maybe it's, you know, $40,000 a year, maybe it's $100,000 a year. Most of the studies say your happiness doesn't increase past around 80,000 to 100,000 depending on where you're living. So keep that in mind. I always tell people to kind of aim for that 80 to 100,000 or so. And then also keep in mind your risk tolerance. So there's certain types of investments that are extremely low risk. And we'll go over those a little bit later. We're talking about bonds, for instance, bonds are relatively low risk. Other investments are much more risky. So we're talking about starting your own business, for instance, cryptocurrency, these investments are much more risky, but they also have a higher upside as well. The big thing here is you just set a goal for yourself. So in my case, for instance, I have set several different goals. They've always changed just a little bit. But my big thing is I want to be able to retire before 40 and be able to travel the world. So I figured out that in order to do that, I'm probably going to need to make around $100,000 a year passively, which using the 4% rule, which basically means that you can kind of live off of 4% of whatever your total net worth is for the rest of your life. And you can retire early from that. That means I need to make around $2.5 million by the time that I'm 40. Now, once you've set that goal, it comes down to very simple numbers. All you have to do is calculate exactly how much you need to invest every month in order to get to that goal. And there's a ton of different calculators on the internet. You can also use a simple Excel spreadsheet or Google Sheets in order to calculate this. Now keep in mind, I did mention this before that longer term goals are almost always much easier to reach. And you also don't have to rely as much on luck. If you're trying to become like a millionaire or a billionaire by the time you're 25, there is going to be a tremendous amount of luck that goes into that. However, if you're, you know, trying to do something a little more reasonable, like retiring by the time you're 40, you don't really have to rely all that much on luck. Luck does still play a role, but it's mostly minimized. And the longer you give yourself, the more time you give for compound interest to work in your favor. So next, let's talk about capital. Now you see a lot of videos on YouTube where they tell you to start investing about five to 10% of your income. But the truth is this might not be realistic for everybody watching this video. Maybe you don't have any income. There's a lot of people that are not in a situation where they can put five to 10% of whatever they're making into their investments. So the truth is the best place to start when it comes to investing is to figure out your budgeting situation. So you really want to figure out how you can cut your costs. You can almost think about this like playing offense and defense. So making money is playing offense and playing defense is budgeting, saving and cutting your costs. It really doesn't matter how much money you make. You've seen these studies where 80% of lottery winners end up going broke 70% of professional athletes who make millions and millions of dollars also end up filing for bankruptcy. And the reason for that is because they're very good at making money, but they're not good at saving money, they're not good at budgeting. They're not good at figuring out how to make their money, make them money. So like a sports analogy here is going to be they're very good at offense, but they're not so good at defense. And we all know that defense wins championships. So you can't ignore one or the other. And the great thing about defense is you can always focus on budgeting and saving your money. Even if you don't have a job, maybe you're living off of unemployment right now, you can always focus on making a budget and saving your money. Okay, so defense is something you can start working on no matter what age you are or where you're at in life. All right, so are you spending a ton of money eating out with your friends? Are you spending a ton of money on a car that you can't afford? Are you paying for a lease that you can't afford? For instance, how much are you paying for your rent? Can you get roommates, for instance, that are going to take away half or sometimes even more of that cost? Do you start drinking late at night and start ordering stuff on Amazon that you don't need? Do you buy the newest iPhone the moment that it comes out when it's like $1,500? These are things that everybody can work on. Everybody can save money on. It's very easy, but you do have to make a budget, especially at the beginning. You got to track your expenses later on down the line. Maybe it's not as important to budget when you kind of got it down a little bit. But chances are, if you're not tracking it, you're going to end up spending way more money than you need to. And the truth is most of these things don't make you happy at all. There's some things that actually will make you happy. And if you cut them out of your life, you're going to kind of realize that. But there's a lot of things that kind of make you happy for a moment. It's like a dopamine spike. And then two seconds later, you don't, you don't even care about it. In fact, maybe it makes you feel bad, right? Like eating an entire pint of ice cream or something like that. Okay, it makes you happy for the moment. But then right afterwards, you feel regret. So pretty much no matter where you're at in life, identifying these things or spending way too much money on and cutting back on them is almost always going to be a good thing. Next, let's really dive deep into the concept of risk. And this is something I don't really hear all that many people on YouTube talk about. And it's a really complex topic. And this is going to depend on so many different factors. We're talking about whatever living situation you're in, you know, your current living situation, how much you're making, how much do you have in savings? What are your expenses? What's your overhead? What obligations do you have? You know, do you have a mortgage? Do you have credit card debt? Do you have people who financially depend on you like kids, for instance? And the big thing here is making sure that you're in the right position to take risk. And the great thing here is most people watching this channel are relatively young. And so you probably don't have that many obligations. And the younger you are, the lower your expenses and the less obligations you have, the more risk you can take. And also, if you have an emergency fund that covers your expenses for three months, six months, maybe even 12 months, that means you can take even more risk. So a lot of the time, let's say you're starting a business, for instance, and you quit your job, you go off on your own, most of the time, it's going to take at least six months, we're talking at least six months before you even start making money. And so chances are, if you wanted to start a business, your emergency fund, you'd probably want it to be six to 12 months, maybe even 12 months is a better idea here. So generally speaking, the younger you are, the more risk that you should be taking. And let's contrast this to somebody who is maybe the sole breadwinner in their household, their entire house depends on them to be making that money every single month, you probably don't want to be taking nearly as much risk in that situation. So you'd be wanting to put your money into much less risky investments. And those are some of the ones that we're going to go over pretty soon. And then an extreme example, let's say you're very close to retirement age, you're like 65 years old, and you're pretty close to that number that you need in order to be able to live passively for the rest of your life. In that case, you'd want to be extremely risk averse, you would be putting most of your money into bonds, most likely, which are some of the least risky investments that you can make. And the reason for this is because you never know when the market's going to drop. For all you know, tomorrow, the market could drop and it's going to be down for the next three years. And then what will end up happening if you invested in stocks, for instance, that it might take like three to five years for the market to recover to the point where it was when you had almost enough money to retire. And so you'd probably have to delay your retirement by three to five years. All right, so now we're getting into the good stuff. How do you start investing? Well, the first step is you want to choose a brokerage or an investing app. And the one that I recommend for beginners is Weebol, Fidelity's great, Vanguard's great, Charles Schwab is great. Honestly, at this point, it kind of just comes down to preference when you're looking at some of the top ones. I made an entire video about which ones I think are the best and for what reasons I think they're the best, which you can check that out. I think it's called the stock brokerage tier list and the investing app tier list. Once you've chosen which stock brokerage you're going to invest in, the next thing you want to do is to choose your investment. And again, where you choose to invest is going to depend on your personal situation. However, I see my analytics. I know most people watching this channel are younger people who probably haven't invested before. They have very limited investing experience. And so I will be giving my opinion on that very shortly. But just to give a short list of the possible investments you could make, you've got individual stocks, index funds, ETFs, day trading, forex trading, cryptocurrencies, commodities, bonds, real estate, REITs, REIT stands for real estate investment trust. So first of all, let's start with investing into individual stocks. So this would be something like Tesla or GameStop. So this one is relatively risky because you never know when a company is going to go up or down. We've seen Tesla and GameStop go up quite a bit over the last year and that's why it's gotten so much attention. But what they haven't seen is all the other companies that have ended up dropping in value. So it's very easy to see which stocks do well in hindsight. You know, we all have 2020 hindsight, but very difficult to see which ones are going to do well into the future. And that's why most people recommend one investing for the long run because chances are, you know, a company might go down, but usually it's going to recover when things go back to normal. And two, making sure to diversify your investment. So don't just put your money into one company. Make sure to put your money into a bunch of different companies across a bunch of different industries, and maybe even a bunch of different countries because nobody really knows what's going to happen in the future. Now a very easy way to do this is to track the market or put your money into a stock indices. This is also known as an index fund or an ETF, which stands for exchange traded fund. Now ETFs and index funds are extremely similar. I'm not going to go over the differences in this video, but if you had to make me pick one of them, I would say index funds are a little bit better just because they're slightly more hands off. But they're essentially the same thing where you're diversifying your money throughout a bunch of different companies. Index funds are one of my favorite investments. I think they're a great combination of return. You're usually going to get about 10% returns per year, 7 to 8% adjusted for inflation if you put your money into a normal index fund. This is the route of investment that legendary investor Warren Buffett recommends for the average person. So index funds are passively managed. So let's say like the S&P 500 index funds, for instance, it basically just has a small percentage invested into each of the top 500 companies in the world. This is passively managed. Almost all of it is done automatically. And so therefore the fees are very low. A lot of the time they're like 0.01% or 0.03%, depending on the company that you go with. And by doing this, you're going to beat 99% of normal everyday investors and 95% of finance professionals, right? So these people who are geniuses, they graduate from the top schools like Harvard, Stanford, Wharton, et cetera, their finance professionals, they still can't beat a simple S&P 500 index fund. And that's with all of their resources, all of the people they can talk to, probably insider information, let's be honest. They're still not able to beat a simple index fund. So what does this tell you? You should probably put your money into index funds most of the time. Now there is some argument about that 95% number. Some people say it's like 85%. But still 85%, 95%. What's the difference? Most of the time, 85%, 95% of the time, it's going to be better for you to just set up an index fund that automatically reinvest the dividends back into the fund and also set up your bank account to have automatic withdrawals. So you invest a certain amount into the index fund every month. Next, we're going to be talking about cryptocurrencies. And this is a type of investment that I believe to be a much higher risk investment than something like index funds. However, the upside is also extremely high. So back in 2012, Bitcoin was like $1. Now it's over $60,000. Back in 2015, Ethereum was around $1. Now it's about $2,000. And even the last year, we've seen all kinds of random cryptocurrencies and blockchains, you know, go up like 1000% or more. There are also risks outside of the investment going up itself. There's been lots of different hacks where different exchanges where you buy cryptocurrency from have been hacked. And then sometimes people get their money back. Sometimes it takes years to get it back. And in some cases, they don't get their money back. On top of that, if you accidentally send your cryptocurrency to the wrong wallet, there's a chance that you could lose it. It's much easier for you to get hacked if your password gets out. And let's say you keep your cryptocurrency in an external wallet, which is recommended by most people, your house could always burn down and the wallet could burn to flames as well. So there is a ton of risk in investing in cryptocurrency. Don't let anybody tell you otherwise. I see these channels that say like, oh, it's not risky at all to invest in Ethereum and Bitcoin. These could absolutely go to zero. That is a possibility. It probably won't happen, but there is a higher possibility that they would go to zero than something like investing in an index fund. But with that being said, I do invest in cryptocurrency. And one of the big reasons is, is I think it's more risky to not invest than to invest. The reason is there's also a possibility that the normal financial markets in the world are going to collapse. And when that happens, there's a very good chance people are going to put their money into cryptocurrency instead. So I think a lot of advice out there would say that you should have maybe 5% of your portfolio into cryptocurrency. And I think that's pretty solid. I started off with like 5 to 10% or so. And since then it's grown to a much higher amount. But also keep in mind here that you need to do your research and do your due diligence. All the other things that I talked about still apply here. You want to make sure that you invest in multiple different cryptocurrencies, because chances are, if you just put all of your money into one, bad things are going to happen. You also want to try investing with long term thinking in mind. Don't just go for the super hot one that has a lot of hype around it. Try to invest long term. If it does end up shooting up, you know, 10, 20 X, then you know, sell. That's great. You know, you're going to have to pay taxes on it. But you know, that's, you know, you made 10, 20 X of your money. That's pretty awesome. But if it doesn't, if it's a company you really believed in, you thought the founder was really good, or the idea behind it is great, then chances are in the long run, if you do enough of those companies, you're going to have one that goes up 100 X or 200 X. And that's going to cover the losses. Next, we're going to talk about investing in bonds for beginners. Now a bond is essentially just an IOU and it could come from a company or a government. And they're used by companies and governments in order to raise capital. Now how much you get back is going to depend on what type of bond you invest in. But generally speaking, you know, it's going to be around three to 4% per year. However, bonds are relatively safe. And this is why most financial advisors will tell you if you're close to retirement, like you're 65 and you want to retire at 67 to invest most of your portfolio into bonds. Next, we're going to talk about investing in real estate. And there's two different ways you can do this, you can either invest in a physical property like a house, or you can invest in what are known as REITs, which is real estate investment trusts. Real estate itself, of course, like investing in a house is one of the better investments that you can make. There are some downsides to it because it takes up a lot of your time. And you also have to have some expertise in order to invest in a good investment property. Real estate investment trusts, on the other hand, are kind of like investing in shares into a house. So it's almost like the shares of a company. But instead of doing that, you're investing into property. Now, I think that real estate is a fantastic investment. It just doesn't personally fit my lifestyle, the lifestyle that I want to live, because at the end of the day, I'm aiming for freedom. And I don't want to have to worry about someone's, you know, toilet breaking at 3am in the morning, or the washer needing to get repaired on a weekend where I'm trying to have fun, or anything like that. However, generally speaking, if you are good at investing in real estate, it will probably outperform even an index fund. And then the last one that I'm just going to briefly talk about, which is sort of an investment, I guess you could say, this is going to be the least passive type of investment. And that is investing in yourself, aka starting a side hustle or a business. So this is the most risky type of investment that you could possibly make. It also takes up a ton of time. And it's very difficult. However, if you are successful with this, you can get better returns in any other investment on this list. So next, I'm going to be going over some beginner tips for you to get started with investing. And all of these are going to apply to pretty much any type of investment that you decide to go into. And like I said before, the investment that you decide to go into is going to be completely up to you. It depends on your personal situation, your risk tolerance, etc. So first of all, no matter what you need to think long term, if you are trying to get rich quick, especially when it comes to investing, you are going to have to rely a lot on luck. Okay, luck is going to play a huge role in that. Yes, you can get lucky and you can get rich quick, but chances are you're not going to be able to do it. If you give yourself a longer time frame, which you'd be surprised, it doesn't really take all that long, you know, a lot of people, especially on the financial independence, retire early subreddit, end up retiring 3540. But if you give yourself that timeframe, right 10 to 20 years in order to retire, it becomes much more possible. And it becomes much more realistic for the average person. If you give yourself even longer 3040 years to retire, it becomes extremely easy. The only thing is you just have to be very patient. The second thing I want to talk about is dollar cost averaging. And this means you want to be putting in around the same amount if you can every single month. So a lot of people will hold a bunch of money, right? They've got like, I don't know, $50,000 to invest, they're going to hold it in cash. And then they're going to try to put it into the market at the right moment. And they think that they're going to get the most returns from that study after study has shown that it's almost impossible to time the market. Even if you are a finance professional, you're the best of the best. You're a genius with 160 IQ, you have access to the best consultants, the best technology, etc. You still cannot consistently time the market. So a much better idea is whenever you get paid every single month, you just put a certain percentage of your paycheck into your investment. So when the market is going up, for instance, if you put it into an index fund, you get to ride that wave and when it's going down, you're getting to buy those stocks at a discount. So if you were to have started dollar cost averaging two years ago into Bitcoin, for instance, it would now be worth over $117,000. And you only would have invested $18,000 into it, and the percent change would be over 500%. If you started dollar cost averaging into Bitcoin five years ago, it would be worth over $680,000 right now. And that's again with only $30,000 invested. That's a 2169% increase in value. Same thing goes with Ethereum, for instance, it's even more ridiculous with that one. If you started dollar cost averaging into that one around five years ago, spent $30,000, it would now be worth about $5 million. Okay, so ridiculous ROI on that one. Again, that's just $500 a month, right? You're putting $500 a month into Ethereum, and you did that for the last five years, you would now have over $5 million. Okay, so I'm not saying you should put all your money into Bitcoin or Ethereum chances are those are not going to go up as much as they did in the past. But I think you get the point when it comes to dollar cost averaging. Number three, we're going to talk about understanding risk, reward and luck, right? So luck specifically is something you don't really hear people talking about here on YouTube. A lot of the gurus here will tell you, you don't need to rely on luck, you just have to work hard and all that sort of thing. I think that's BS. I think luck always plays a role. However, you can minimize the amount of luck you need by making sure that you set a long term goal for one. So you give yourself plenty of time and then also positioning yourself correctly. So investing in assets that are very likely to go up over time. So again, being consistent dollar cost averaging is going to lower the amount of luck you need, giving yourself more time and being patient is also going to lower the amount of luck you need. And then understanding risk and reward. When you're younger, you can take more risks. This is the time for you to start businesses, invest in cryptocurrency, do things that are a little more risky. However, when you get older, you probably want to put your money into, you know, index funds and bonds. And then when you get really close to retirement, you probably want to put most of your money into bonds. Number four is diversify, diversify, diversify. Very important that you do this, not only diversifying with different stocks, but probably different types of investments as well. You know, if you invest in an S&P 500 index fund, that's awesome. However, you might not realize that maybe the rest of the world is going to catch up with the United States. Most of those companies in there from the United States, it's possible that companies in the rest of the world are undervalued. And so maybe over the next 10 to 20 years, companies from Japan and the UK, China, et cetera, are going to catch up with US stocks. So it might be a good idea for you to also invest in an international index fund as well. There's a lot more to that part. But you know, I'm just going to keep this relatively short. That's basically what you need to know. Number five is going to be remember your goals. Remember the goal that you originally set for yourself. Over time, you can change these goals. Let's say, you know, you're way ahead of schedule, you wanted to retire at 40, maybe you can change it. Hey, I want to retire at 35 now. That's awesome. Whatever keeps you motivated. But the big thing here is that it's very easy to get greedy, especially if you get lucky. You really want to make sure that you have an exit strategy. Figure out how much money you need to be happy, right? Because at the end of the day, what are we trying to do? We're trying to achieve freedom and maximize our happiness. So how much money do you need to achieve your freedom and maximize your happiness? Figure that out and then, you know, do the numbers from there. Use the 4% rule, multiply that number by 25 and you're going to have how much you need to retire. Then you can work backwards from there, figure out how much you need to invest every month to get to that point by whatever age you want to retire. You know, one thing I want to quickly talk about here is hopelessness and the doomer culture that we sort of have around these days. It seems like a lot of people that are my age are just very hopeless because the economy isn't nearly as good as it used to be when people in the boomer generation, for instance, were young. I mean, they had things so easy. They could go to college and pay for it with a part-time job and they wouldn't have to take out any student loans or they wouldn't have any loans after they're done with college. They could work like a part-time job and live easily from that. They could even probably retire with just a normal part-time job. My dad told me a story about how he worked as like a gas boy. I guess you could say like the person who fills up gas back in the day. My dad's like over 70 years old, so he's like a boomer and he told me that he made enough money from that to buy a house. So we definitely don't have the same kind of economic situation that our parents or grandparents had. That's totally true. So I understand why so many people are upset about that. However, I still don't think that you should just give up and be a doomer. Now, one thing you want to look into here is you don't necessarily need millions of dollars to retire. So I live just north of Seattle, Washington, so we can compare the cost of living in Seattle, Washington versus Chiang Mai, Thailand. It's almost three times more expensive to live in Seattle than it is in Chiang Mai. And this is on numbeo.com. This is a really good website for kind of comparing the cost of living in different places. And you can live on about $1,000 a month in Chiang Mai, Thailand. There's tons of different channels here on YouTube that talk about how you can do this. So for instance, $1,000 times 12, that's going to be $12,000. You multiply that by what you're going to get on average with an index fund and you come up with about $171,000. Now, this isn't super safe, but with $171,000, you can live for quite a while in Chiang Mai, Thailand. Now, using the 4% rule, $1,000 a month, 12 months times 25, that's going to be $300,000, right? So I'm not saying this is the best option for everybody. Some people probably don't want to live in a country like Thailand, although a lot of people who go there say it's pretty awesome. Maybe you're somebody who, you know, wants to live with your family, you kind of live in a small town and you want to stay there. That's totally fine. This is not an option for everybody. But what I'm trying to show you here is you don't have to just retire traditionally. There are other options for you out there. And so you don't want to be a doom and gloom type person that just gives up. And I know there's going to be some Urkels down in the comment section that say, oh, well you didn't consider this factor and that factor and you know, listen, I can make another video on this. If you'd like, I'm trying to keep this one relatively short. It's kind of like a mini course. But the sixth thing you want to look into here, and this is more my opinion kind of my investing philosophy. Some other people would disagree on this is you want to choose investments that don't take up very much of your time. So this is one reason why I don't like investing in real estate. I'm probably going to make an entire video about this is there are so many hidden costs in real estate, hidden things you have to keep up with, you have to fix stuff when it breaks down, you have to deal with tenants. If you hire a property manager, you have to make sure the property manager is doing their due diligence. There's just so much that goes into investing in real estate. It takes so long to get good at it and understand all the different factors you have to look into. And so for that reason, I don't really like investing in real estate because it takes up so much of my time. Instead, I like investing in index funds. And I've shown you guys why index funds are probably objectively the best investment for the average person. I also invest in cryptocurrency because it has such a high upside. And in my opinion, it's riskier to not invest in it than to invest in it. And then the third thing I invest in is myself, right? So I made sure to invest in my education. And I started my own business, which is now pretty successful. So if you are going to spend a bunch of time on something, in my opinion, you should spend time investing in skills that are going to earn you more money. All of my other investments are relatively passive. So for instance, 401k, Roth IRA, these are tax advantage retirement investments. And I highly recommend investing in those. They're basically you can do an index fund within those that takes basically 0% of my time, same with the index funds that I invest in. And then cryptocurrency, I do have to monitor it a little bit because I'm not investing in like a cryptocurrency index fund. But again, that doesn't take very much of my time. This is why things like day trading, for instance, are definitely not worth it. Not only because of the fact that almost everybody loses money day trading, but it also takes a tremendous amount of skill to even be decent at it. And it takes up a ton of your time. Now that segues into number seven on the list, which is to use logic, not emotion. And a great example of that is everybody is just freaking out about crypto right now. And the truth is, yes, you can probably get some pretty good gains if you invest in crypto right now. But chances are the best time to invest was about one year ago, when literally nobody was talking about it. You know, Bitcoin right now, for instance, is like 10x from what it was about one year ago. Same with Ethereum and a bunch of the other cryptocurrencies. Some of them are ridiculous. Some of them are like 100x. And you see this playing out over and over again. It's like every single time it happens the same exact way. Nobody's talking about cryptocurrency when the market's down. That's the best time to invest in it. As soon as the market starts to go up, when it's, you know, getting relatively close to its peak, or it's like halfway there, that's when every start, everybody starts picking up on it. They all start investing in it. And that's when most normal people start investing. That is not the best time to invest in it. Chances are it's going to, you know, end at some point this year. Nobody really knows when, but the market is going to drop at some point this year, most likely. And then a lot of people are going to end up losing their money because they invested at the top. And it's so simple, but people do this over and over again, especially new investors. And it's almost like the old saying, be fearful when other people are greedy and greedy when other people are fearful. So most people are investing with emotion because there's so much hype right now. You know, we've been seeing channels go from like 100,000 to like 500,000 subscribers in just a few months. All the news networks are covering it. You're seeing articles pop up everywhere. Guess what? There's a reason for that because there's a ton of hype right now. And pretty soon, all the hype is probably going to create a bubble and then the bubble is going to burst just like it has every single time in the past. So if you enjoyed this video and you haven't done it already, make sure to gently tap that like button, hit the subscribe button, ring the notification bell and comment down below any thoughts, comments, criticisms, et cetera. And before you leave, check out my other videos right here. I made them just for you.