WEBVTT 00:04.510 --> 00:09.100 OK first of all I want to talk about saving and investing. 00:09.430 --> 00:12.690 There's a number of financial mistakes that people make in their lives. 00:12.730 --> 00:19.600 And one of the most serious mistakes is that they don't understand saving and investing saving won't 00:19.600 --> 00:21.700 make you richer investing. 00:21.700 --> 00:25.390 Well now let's take a look at the situation. 00:25.570 --> 00:28.500 For example you're making $2000 a month. 00:28.630 --> 00:33.520 You start working at age 25 and you decide to retire at age 65. 00:33.580 --> 00:36.730 So you're working period is about 40 years. 00:36.730 --> 00:40.790 Assume that you won't have to spend your salary your income on anything. 00:40.810 --> 00:44.980 And this literally means you can save 100 percent of your income. 00:44.980 --> 00:52.000 So with the average income of $2000 a month if you keep working hard in 40 years and save all your money 00:52.390 --> 01:01.770 he'll be able to make a maximum of nine hundred and sixty thousand dollars you would almost be a millionaire. 01:01.820 --> 01:07.570 But the fact is that saving 100 percent of your income is simply impossible. 01:07.580 --> 01:14.120 That's because you'll have to spend a lot on housing food apparel transportation your entertainment 01:14.240 --> 01:20.780 your family's vacation your children's education health care services Social Security your insurance 01:20.780 --> 01:23.570 charities and a lot more. 01:23.570 --> 01:31.530 So with an average income of $2000 a month you will never be a millionaire OK. 01:31.530 --> 01:37.680 Now let's take a look at another situation so you can see exactly how investing can help you get wealthy 01:37.890 --> 01:40.300 without any extra effort. 01:40.480 --> 01:43.230 Assume that your income is still $2000 a month. 01:43.350 --> 01:47.780 But in this case you decide to save a small percentage of your income. 01:47.820 --> 01:51.540 For example $300 a month to invest. 01:51.540 --> 01:58.500 Assume that you start investing at age 25 and continue to invest $300 a month until you retire at age 01:58.500 --> 02:00.270 65. 02:00.270 --> 02:06.630 With only 10 percent annual return from the stock market you'll be able to turn your 300 dollar investments 02:06.870 --> 02:09.300 into a $1.6 billion. 02:09.360 --> 02:11.350 In 40 years. 02:11.350 --> 02:16.290 Let's compare that with the previous case where you have to work really hard and try to save all of 02:16.290 --> 02:18.220 your money in 40 years. 02:18.600 --> 02:25.020 As you can see for the same number of years and with small investments of only $300 a month you can 02:25.080 --> 02:27.130 easily double your net worth. 02:27.180 --> 02:33.820 Build a satisfying retirement and retire wealthy with a millionaire status. 02:33.830 --> 02:40.400 So how can we turn small investments of $300 dollars a month into 1.6 million dollars. 02:40.670 --> 02:48.580 We can actually do so thanks to the amazing power of compound interest compounding is the wonderful 02:48.580 --> 02:54.330 way in which you can earn money not only on the original amount of investment but on all of the money 02:54.340 --> 02:57.400 that original amount earns along the way. 02:57.610 --> 03:05.540 Money makes money and compounding exponentially increases the amount of money your investment earns. 03:05.540 --> 03:08.120 How compound interest works is simple. 03:08.320 --> 03:13.150 Let's say you have an investment that gives you a return of 20 percent in interest every year. 03:13.150 --> 03:16.620 For example you invest $100 in the stock market. 03:16.660 --> 03:22.540 So in the first year your investment will grow from $100 to $120. 03:22.540 --> 03:27.530 This means you've made $20 in profit instead of taking out the $20 profit. 03:27.760 --> 03:35.870 You decide to keep investing it so your investment is now worth $120 in the second year. 03:35.920 --> 03:44.340 Your investment will continue to grow by 20 percent this time from $120 to $144. 03:44.500 --> 03:49.510 So you'll make a $24 profit in the second year of investing. 03:49.510 --> 03:56.350 The key to compounding lies in the fact that returns on an investment are reinvested as they're earned. 03:56.350 --> 04:00.970 This is what differentiates that compound return from the simple return. 04:00.970 --> 04:06.700 If you keep reinvesting your money you'll make more and more profits every year. 04:07.630 --> 04:14.140 If you start saving and investing $300 a month today and grow your investments buy an affordable return 04:14.140 --> 04:16.470 of 10 percent from the stock market. 04:16.570 --> 04:23.440 You can easily build a net worth of $1 billion or more if you start saving and investing a thousand 04:23.440 --> 04:24.700 dollars a month today. 04:24.850 --> 04:31.050 And if you do it the right way I guarantee you sooner or later you'll be a Millionaire. 04:31.300 --> 04:36.290 And if you're making a lot of money maybe you're running a business or you're having a good job. 04:36.340 --> 04:38.700 Just try to invest as much as you can. 04:38.770 --> 04:45.340 If you save and invest $5000 a month with the same rate of return of only 10 percent you can turn your 04:45.340 --> 04:50.520 investments into 17 million dollars in 35 years. 04:50.530 --> 04:56.740 In fact the more money you save to invest the faster you'll achieve your financial goals. 04:56.800 --> 04:59.200 If you think that thirty five years is too long. 04:59.200 --> 05:01.510 Just think about it for a second. 05:01.510 --> 05:08.570 Everything takes time and no matter what you're doing you can not achieve great results overnight. 05:08.680 --> 05:09.820 Period. 05:10.580 --> 05:16.550 Looking at Warren Buffett the world's most successful investor he once said I made my first investment 05:16.670 --> 05:18.030 at age 11. 05:18.090 --> 05:19.210 I was wasting my life. 05:19.210 --> 05:24.610 Up until then Warren Buffett's been investing his money for over 75 years. 05:24.650 --> 05:29.580 It took him 75 years to become the richest investor in the world. 05:29.580 --> 05:31.810 You know it's totally worth it. 05:33.170 --> 05:36.170 As you can see making money takes time. 05:36.170 --> 05:41.150 Investing takes time in creating real wealth takes time. 05:41.180 --> 05:47.330 So forget about how long you'll invest your money for just put in the work and start investing as early 05:47.330 --> 05:48.360 as possible. 05:49.500 --> 05:53.200 Now you see the importance of investing in creating wealth. 05:53.430 --> 05:59.020 You just need to invest a small percentage of your income and you can build a more satisfying retirement. 05:59.070 --> 06:05.760 Create a better financial life and have an abundance to care for your family and accomplish your dreams. 06:05.760 --> 06:06.830 Interesting right. 06:07.990 --> 06:14.780 So how can we achieve a risk free 10 percent annual return from the stock market to be able to do so. 06:14.830 --> 06:18.010 You must first see the bigger picture of the stock market. 06:18.370 --> 06:23.890 As promised I'm going to share with you my profitable investing experience that's helped me consistently 06:23.890 --> 06:26.000 profit from the stock market. 06:26.110 --> 06:33.100 I learned the secret the hard way by experiencing a lot of mistakes and failures and now I'm sharing 06:33.100 --> 06:37.130 it with you because I don't want you to make the same mistakes as I did. 06:37.240 --> 06:40.750 And more importantly I want you to succeed. 06:41.930 --> 06:42.360 OK. 06:42.540 --> 06:47.350 Now let's take a look at how the stock markets performed in the last 30 years. 06:50.890 --> 06:57.130 This is the 30 year history of the U.S. stock market as you can see on the screen over the last 30 years 06:57.130 --> 06:59.840 from 1986 to 2016. 06:59.950 --> 07:04.720 The stock market's value has increased by over 1000 percent. 07:05.080 --> 07:10.930 For example if you'd invested in the Dow Jones 30 years ago your investment would grow by more than 07:10.990 --> 07:13.140 thirteen hundred percent. 07:13.180 --> 07:15.240 This is just a simple estimation. 07:15.250 --> 07:19.820 In fact your annual return would have been a lot higher than 1800 percent. 07:19.840 --> 07:24.940 That's because you would have earned a lot more thanks to the compound interest and you'd also receive 07:24.940 --> 07:26.920 dividends from your investment. 07:27.370 --> 07:32.310 As you can see on that chart the stock market's value went up and down over time. 07:32.350 --> 07:37.180 There were some years that the stock market's value went up and there were some years that the markets 07:37.180 --> 07:39.400 value went down. 07:39.490 --> 07:46.510 But if you notice over the long term the stock market would always keep increasing in value the profitable 07:46.510 --> 07:53.650 investing experience is that the stock market is very volatile and a short term but in the long term 07:53.890 --> 07:56.660 it will always keep going up in value. 07:57.950 --> 07:59.450 Still don't believe. 07:59.710 --> 08:00.120 OK. 08:00.320 --> 08:06.230 Now let's see the five year performance of the S&P 500 index as you can see on the screen the stock 08:06.230 --> 08:08.250 market was very volatile. 08:08.270 --> 08:11.120 Its value went up and down over time. 08:11.120 --> 08:16.280 And that simply means if you invest in the short term you'll likely take more risks. 08:16.280 --> 08:21.340 When I first started I only looked for short term investments because I was not patient. 08:21.380 --> 08:27.020 I was clueless about what was going to happen and that's why I failed and lost all of my hard earned 08:27.020 --> 08:28.300 money. 08:28.310 --> 08:31.830 In fact we have no idea about what's going on with the market. 08:32.030 --> 08:38.180 But if you notice over the long term the stock market will always keep increasing in value. 08:38.330 --> 08:43.700 If you're invested in the S&P 500 just five years ago you would have been able to grow your money by 08:43.700 --> 08:46.050 nearly 90 percent. 08:46.070 --> 08:53.030 That would have been an easy seventeen point eight percent return every year just to buy and hold your 08:53.030 --> 08:55.060 investment. 08:55.190 --> 08:57.380 Still not a believer. 08:57.470 --> 08:59.690 Now let's take a look at some random companies. 08:59.690 --> 09:05.060 For example Amazon as you can see on the screen this company's stock is very volatile. 09:05.090 --> 09:11.480 The stock price went up and down over time and the price fluctuation ranges somewhere between $50 and 09:11.480 --> 09:13.340 $200 a share. 09:13.670 --> 09:19.100 That is to say if you buy and sell this stock without a real strategy chances are you'll potentially 09:19.100 --> 09:24.180 lose hundreds or thousands of dollars in just a few days or weeks. 09:24.350 --> 09:27.570 Actually we don't know what will happen next with the stock market. 09:27.770 --> 09:33.860 But if you notice over the long term this stock will likely keep going up in value. 09:34.040 --> 09:40.100 If you'd invested in Amazon five years ago invest for the long term you would have grown your investment 09:40.100 --> 09:42.480 by more than two hundred percent. 09:42.560 --> 09:48.470 You could have doubled your money in just five years and made five hundred dollars a share in profit. 09:48.530 --> 09:54.110 You see by knowing a simple truth you can make almost all of your investments become profitable. 09:54.110 --> 09:59.600 That's why people who know how to invest are always richer and wealthier than people who don't know 09:59.600 --> 10:00.790 how to invest. 10:01.860 --> 10:08.470 Now let's take a look at another example VISA this company stock price also went up and down over time. 10:08.640 --> 10:13.160 But over the long term it would always keep increasing in value. 10:13.200 --> 10:20.130 If you'd invested in Visa five years ago you could have easily made over 50 percent return every year 10:20.280 --> 10:21.660 from your investment. 10:22.880 --> 10:29.450 OK another example Google similar to Amazon this company's stock is also very volatile. 10:29.450 --> 10:34.270 The price fluctuation range is somewhere between 50 and 200 dollars a share. 10:34.270 --> 10:38.060 It would be really risky if you invest in this stock for a short term. 10:38.060 --> 10:44.240 You may lose a lot of money when the price fluctuates but if you invest for the long term you can easily 10:44.240 --> 10:47.760 eliminate the risk and make your investment profitable. 10:48.080 --> 10:54.350 Five years ago you could buy Google stock at about $300 a share and now its value has grown to more 10:54.350 --> 10:56.640 than eight hundred dollars a share. 10:56.750 --> 11:02.630 And this simply means if you had invested in Google five years ago you would have made over five hundred 11:02.630 --> 11:07.730 dollars a share easily and effortlessly OK. 11:07.730 --> 11:14.100 The next example the Home Depot despite the fact that this company stock price went up and down every 11:14.100 --> 11:19.050 day its value would always keep increasing over the long term. 11:19.130 --> 11:25.760 If you'd invested in this stock five years ago you could have easily made over 53 percent return every 11:25.760 --> 11:28.830 year from your investment. 11:28.870 --> 11:33.990 The same for Facebook even though its stock price fluctuated wildly over time. 11:34.000 --> 11:37.820 This company would keep increasing in value over the long term. 11:37.900 --> 11:42.740 If you'd invested in Facebook you could have tripled your money in just five years. 11:44.840 --> 11:46.540 OK another example. 11:46.540 --> 11:54.660 Nike as you can see on the chart this company has value has grown by 146 percent in the last five years. 11:54.700 --> 12:00.610 If you'd bought and held Nike five years ago you would have made him more than 29 percent annualized 12:00.610 --> 12:02.730 return from your investment. 12:03.750 --> 12:06.090 Still not a believer yet. 12:06.090 --> 12:10.410 Now let's take a look at another example Papa John's International. 12:10.470 --> 12:13.350 This is of value stock that I've recently purchased. 12:13.410 --> 12:19.890 As you can see on the screen even though Papa John's is a great company its stock is very volatile. 12:19.890 --> 12:22.380 The stock price went up and down over time. 12:22.380 --> 12:27.860 But if you notice over the long term the stock would always keep going up in value. 12:28.050 --> 12:33.780 If you'd invested in this company five years ago you could have grown your investment by over four hundred 12:33.780 --> 12:34.580 percent. 12:34.830 --> 12:39.860 And this simply means you could have multiplied your money by four in just five years. 12:39.960 --> 12:44.310 Without trying too hard to beat the market OK. 12:44.320 --> 12:45.700 One more example. 12:45.830 --> 12:49.030 T x R.H. or Texas Roadhouse. 12:49.030 --> 12:53.740 This is a good company that I've recently purchased and many of my students also bought the stock and 12:53.890 --> 12:55.720 made some good profits. 12:55.930 --> 13:01.390 As you can see on the chart even though the stock price went up and down over time the stock's value 13:01.510 --> 13:04.800 would always keep increasing over the long term. 13:04.870 --> 13:11.680 If you'd invested anti-X R.H. five years ago you would have been able to make over 46 percent return 13:11.830 --> 13:14.440 a year on your investment. 13:14.530 --> 13:19.750 And this simply means that you could have doubled your money in just five years without taking high 13:19.750 --> 13:22.060 risks or trying too hard. 13:23.500 --> 13:26.250 So what can we learn from this experience. 13:27.150 --> 13:32.490 Investing in the short term simply means you'll likely take higher risks if you want to really make 13:32.490 --> 13:34.590 money with your short term investments. 13:34.590 --> 13:40.170 You'll have to master a lot of technical trading skills and you know it's not easy at all. 13:40.200 --> 13:45.870 So if you have no experience in using technical analysis you should avoid making short term investments 13:46.560 --> 13:52.920 are profitable investing experience is that the stock market will always keep going up in value over 13:52.920 --> 13:54.660 the long term. 13:54.660 --> 13:59.580 So if you're looking for the easiest and most profitable way to make your money work for you you may 13:59.580 --> 14:02.070 want to look for long term investments. 14:02.160 --> 14:08.430 For example you can invest in value stocks ETF or some kinds of income stocks. 14:08.430 --> 14:13.830 If you have no idea about these types of investments don't worry because I've got you covered in the 14:13.830 --> 14:15.590 next video. 14:15.760 --> 14:23.180 The final key point to take away is that both stock markets and individual stocks share the same characteristics. 14:23.350 --> 14:29.080 So no matter if you invest in the whole stock market index or invest in a particular company you can 14:29.080 --> 14:32.750 apply the same strategy to grow your money. 14:32.880 --> 14:40.360 OK one more useful tip if you're new to investing you can apply the 90 10 rule to get started how this 14:40.360 --> 14:41.770 rule works is simple. 14:41.950 --> 14:47.020 You can invest 90 percent of your money in long term investments to make sure that your money will be 14:47.020 --> 14:53.200 safe and invest the remaining 10 percent in short term investments to test the water. 14:53.200 --> 14:58.850 This way it's much safer because if you fail you'll only lose a small amount of money. 14:58.990 --> 15:02.910 You have nothing to worry about but everything to gain. 15:04.020 --> 15:10.350 By applying the same strategy that I've shared You can easily turn your small investments of just $300 15:10.350 --> 15:14.520 a month into a million dollars in thirty five years. 15:14.550 --> 15:19.710 It's a lot of money for no extra effort just save some money and invest it. 15:20.710 --> 15:26.920 With an average return of 10 percent you can easily turn your $300 dollar investments into a million 15:26.920 --> 15:29.230 dollars in 35 years. 15:29.230 --> 15:35.080 However if you can double your return say you can make a return of 20 percent per year for the same 15:35.080 --> 15:36.020 number of years. 15:36.100 --> 15:42.750 And for the same amount of money invested you can build a net worth of over 11 million dollars. 15:42.790 --> 15:49.600 That also means that you can easily multiply your net worth by 10 just by doubling your compound return 15:49.810 --> 15:52.450 to an affordable 20 percent a year. 15:52.450 --> 15:54.820 Investing is exciting right. 15:54.820 --> 16:00.160 Once you have a real strategy you can consistently multiply your money and that's why knowing how to 16:00.160 --> 16:03.750 invest can change your life forever. 16:04.720 --> 16:08.170 It is very easy to make a 10 percent return a year. 16:08.200 --> 16:10.790 All you need is patience. 16:10.840 --> 16:14.940 You just need to have enough patience to wait for your money to grow. 16:14.950 --> 16:21.430 However if you want to double your return to 20 percent besides being patient you'll need real education 16:21.640 --> 16:23.470 and a lot of hard work. 16:23.890 --> 16:31.780 When it comes to investing Honestly you can't succeed overnight and there will be no shortcut to be 16:31.780 --> 16:33.460 successful as an investor. 16:33.550 --> 16:37.080 You must first invest in your education. 16:37.300 --> 16:39.460 You'll need to learn real strategies. 16:39.460 --> 16:45.210 Put those strategies into practice and start letting your money work hard for you. 16:46.380 --> 16:52.240 So now you know exactly what you need to do to grow your money and create a better financial life. 16:52.620 --> 16:55.050 Here's what we're going to cover in the next video. 16:55.050 --> 16:59.820 Make sure you keep an eye on your inbox because we'll have a lot of interesting stuff to talk about 17:00.610 --> 17:01.790 in the next video. 17:01.830 --> 17:06.900 I'll teach you exactly how you can instantly build four streams of passive income. 17:07.080 --> 17:10.400 You'll learn how to build your own investment portfolio. 17:10.410 --> 17:17.100 I'll also teach you exactly how to use money to make money and give you my best investing tips and a 17:17.100 --> 17:18.220 lot more. 17:19.570 --> 17:23.460 Glad you enjoy it here and I'll see you in the next video.