OK first of all I want to talk about saving and investing.
There's a number of financial mistakes that people make in their lives.
And one of the most serious mistakes is that they don't understand saving and investing saving won't
make you richer investing.
Well now let's take a look at the situation.
For example you're making $2000 a month.
You start working at age 25 and you decide to retire at age 65.
So you're working period is about 40 years.
Assume that you won't have to spend your salary your income on anything.
And this literally means you can save 100 percent of your income.
So with the average income of $2000 a month if you keep working hard in 40 years and save all your money
he'll be able to make a maximum of nine hundred and sixty thousand dollars you would almost be a millionaire.
But the fact is that saving 100 percent of your income is simply impossible.
That's because you'll have to spend a lot on housing food apparel transportation your entertainment
your family's vacation your children's education health care services Social Security your insurance
charities and a lot more.
So with an average income of $2000 a month you will never be a millionaire OK.
Now let's take a look at another situation so you can see exactly how investing can help you get wealthy
without any extra effort.
Assume that your income is still $2000 a month.
But in this case you decide to save a small percentage of your income.
For example $300 a month to invest.
Assume that you start investing at age 25 and continue to invest $300 a month until you retire at age
65.
With only 10 percent annual return from the stock market you'll be able to turn your 300 dollar investments
into a $1.6 billion.
In 40 years.
Let's compare that with the previous case where you have to work really hard and try to save all of
your money in 40 years.
As you can see for the same number of years and with small investments of only $300 a month you can
easily double your net worth.
Build a satisfying retirement and retire wealthy with a millionaire status.
So how can we turn small investments of $300 dollars a month into 1.6 million dollars.
We can actually do so thanks to the amazing power of compound interest compounding is the wonderful
way in which you can earn money not only on the original amount of investment but on all of the money
that original amount earns along the way.
Money makes money and compounding exponentially increases the amount of money your investment earns.
How compound interest works is simple.
Let's say you have an investment that gives you a return of 20 percent in interest every year.
For example you invest $100 in the stock market.
So in the first year your investment will grow from $100 to $120.
This means you've made $20 in profit instead of taking out the $20 profit.
You decide to keep investing it so your investment is now worth $120 in the second year.
Your investment will continue to grow by 20 percent this time from $120 to $144.
So you'll make a $24 profit in the second year of investing.
The key to compounding lies in the fact that returns on an investment are reinvested as they're earned.
This is what differentiates that compound return from the simple return.
If you keep reinvesting your money you'll make more and more profits every year.
If you start saving and investing $300 a month today and grow your investments buy an affordable return
of 10 percent from the stock market.
You can easily build a net worth of $1 billion or more if you start saving and investing a thousand
dollars a month today.
And if you do it the right way I guarantee you sooner or later you'll be a Millionaire.
And if you're making a lot of money maybe you're running a business or you're having a good job.
Just try to invest as much as you can.
If you save and invest $5000 a month with the same rate of return of only 10 percent you can turn your
investments into 17 million dollars in 35 years.
In fact the more money you save to invest the faster you'll achieve your financial goals.
If you think that thirty five years is too long.
Just think about it for a second.
Everything takes time and no matter what you're doing you can not achieve great results overnight.
Period.
Looking at Warren Buffett the world's most successful investor he once said I made my first investment
at age 11.
I was wasting my life.
Up until then Warren Buffett's been investing his money for over 75 years.
It took him 75 years to become the richest investor in the world.
You know it's totally worth it.
As you can see making money takes time.
Investing takes time in creating real wealth takes time.
So forget about how long you'll invest your money for just put in the work and start investing as early
as possible.
Now you see the importance of investing in creating wealth.
You just need to invest a small percentage of your income and you can build a more satisfying retirement.
Create a better financial life and have an abundance to care for your family and accomplish your dreams.
Interesting right.
So how can we achieve a risk free 10 percent annual return from the stock market to be able to do so.
You must first see the bigger picture of the stock market.
As promised I'm going to share with you my profitable investing experience that's helped me consistently
profit from the stock market.
I learned the secret the hard way by experiencing a lot of mistakes and failures and now I'm sharing
it with you because I don't want you to make the same mistakes as I did.
And more importantly I want you to succeed.
OK.
Now let's take a look at how the stock markets performed in the last 30 years.
This is the 30 year history of the U.S. stock market as you can see on the screen over the last 30 years
from 1986 to 2016.
The stock market's value has increased by over 1000 percent.
For example if you'd invested in the Dow Jones 30 years ago your investment would grow by more than
thirteen hundred percent.
This is just a simple estimation.
In fact your annual return would have been a lot higher than 1800 percent.
That's because you would have earned a lot more thanks to the compound interest and you'd also receive
dividends from your investment.
As you can see on that chart the stock market's value went up and down over time.
There were some years that the stock market's value went up and there were some years that the markets
value went down.
But if you notice over the long term the stock market would always keep increasing in value the profitable
investing experience is that the stock market is very volatile and a short term but in the long term
it will always keep going up in value.
Still don't believe.
OK.
Now let's see the five year performance of the S&P 500 index as you can see on the screen the stock
market was very volatile.
Its value went up and down over time.
And that simply means if you invest in the short term you'll likely take more risks.
When I first started I only looked for short term investments because I was not patient.
I was clueless about what was going to happen and that's why I failed and lost all of my hard earned
money.
In fact we have no idea about what's going on with the market.
But if you notice over the long term the stock market will always keep increasing in value.
If you're invested in the S&P 500 just five years ago you would have been able to grow your money by
nearly 90 percent.
That would have been an easy seventeen point eight percent return every year just to buy and hold your
investment.
Still not a believer.
Now let's take a look at some random companies.
For example Amazon as you can see on the screen this company's stock is very volatile.
The stock price went up and down over time and the price fluctuation ranges somewhere between $50 and
$200 a share.
That is to say if you buy and sell this stock without a real strategy chances are you'll potentially
lose hundreds or thousands of dollars in just a few days or weeks.
Actually we don't know what will happen next with the stock market.
But if you notice over the long term this stock will likely keep going up in value.
If you'd invested in Amazon five years ago invest for the long term you would have grown your investment
by more than two hundred percent.
You could have doubled your money in just five years and made five hundred dollars a share in profit.
You see by knowing a simple truth you can make almost all of your investments become profitable.
That's why people who know how to invest are always richer and wealthier than people who don't know
how to invest.
Now let's take a look at another example VISA this company stock price also went up and down over time.
But over the long term it would always keep increasing in value.
If you'd invested in Visa five years ago you could have easily made over 50 percent return every year
from your investment.
OK another example Google similar to Amazon this company's stock is also very volatile.
The price fluctuation range is somewhere between 50 and 200 dollars a share.
It would be really risky if you invest in this stock for a short term.
You may lose a lot of money when the price fluctuates but if you invest for the long term you can easily
eliminate the risk and make your investment profitable.
Five years ago you could buy Google stock at about $300 a share and now its value has grown to more
than eight hundred dollars a share.
And this simply means if you had invested in Google five years ago you would have made over five hundred
dollars a share easily and effortlessly OK.
The next example the Home Depot despite the fact that this company stock price went up and down every
day its value would always keep increasing over the long term.
If you'd invested in this stock five years ago you could have easily made over 53 percent return every
year from your investment.
The same for Facebook even though its stock price fluctuated wildly over time.
This company would keep increasing in value over the long term.
If you'd invested in Facebook you could have tripled your money in just five years.
OK another example.
Nike as you can see on the chart this company has value has grown by 146 percent in the last five years.
If you'd bought and held Nike five years ago you would have made him more than 29 percent annualized
return from your investment.
Still not a believer yet.
Now let's take a look at another example Papa John's International.
This is of value stock that I've recently purchased.
As you can see on the screen even though Papa John's is a great company its stock is very volatile.
The stock price went up and down over time.
But if you notice over the long term the stock would always keep going up in value.
If you'd invested in this company five years ago you could have grown your investment by over four hundred
percent.
And this simply means you could have multiplied your money by four in just five years.
Without trying too hard to beat the market OK.
One more example.
T x R.H. or Texas Roadhouse.
This is a good company that I've recently purchased and many of my students also bought the stock and
made some good profits.
As you can see on the chart even though the stock price went up and down over time the stock's value
would always keep increasing over the long term.
If you'd invested anti-X R.H. five years ago you would have been able to make over 46 percent return
a year on your investment.
And this simply means that you could have doubled your money in just five years without taking high
risks or trying too hard.
So what can we learn from this experience.
Investing in the short term simply means you'll likely take higher risks if you want to really make
money with your short term investments.
You'll have to master a lot of technical trading skills and you know it's not easy at all.
So if you have no experience in using technical analysis you should avoid making short term investments
are profitable investing experience is that the stock market will always keep going up in value over
the long term.
So if you're looking for the easiest and most profitable way to make your money work for you you may
want to look for long term investments.
For example you can invest in value stocks ETF or some kinds of income stocks.
If you have no idea about these types of investments don't worry because I've got you covered in the
next video.
The final key point to take away is that both stock markets and individual stocks share the same characteristics.
So no matter if you invest in the whole stock market index or invest in a particular company you can
apply the same strategy to grow your money.
OK one more useful tip if you're new to investing you can apply the 90 10 rule to get started how this
rule works is simple.
You can invest 90 percent of your money in long term investments to make sure that your money will be
safe and invest the remaining 10 percent in short term investments to test the water.
This way it's much safer because if you fail you'll only lose a small amount of money.
You have nothing to worry about but everything to gain.
By applying the same strategy that I've shared You can easily turn your small investments of just $300
a month into a million dollars in thirty five years.
It's a lot of money for no extra effort just save some money and invest it.
With an average return of 10 percent you can easily turn your $300 dollar investments into a million
dollars in 35 years.
However if you can double your return say you can make a return of 20 percent per year for the same
number of years.
And for the same amount of money invested you can build a net worth of over 11 million dollars.
That also means that you can easily multiply your net worth by 10 just by doubling your compound return
to an affordable 20 percent a year.
Investing is exciting right.
Once you have a real strategy you can consistently multiply your money and that's why knowing how to
invest can change your life forever.
It is very easy to make a 10 percent return a year.
All you need is patience.
You just need to have enough patience to wait for your money to grow.
However if you want to double your return to 20 percent besides being patient you'll need real education
and a lot of hard work.
When it comes to investing Honestly you can't succeed overnight and there will be no shortcut to be
successful as an investor.
You must first invest in your education.
You'll need to learn real strategies.
Put those strategies into practice and start letting your money work hard for you.
So now you know exactly what you need to do to grow your money and create a better financial life.
Here's what we're going to cover in the next video.
Make sure you keep an eye on your inbox because we'll have a lot of interesting stuff to talk about
in the next video.
I'll teach you exactly how you can instantly build four streams of passive income.
You'll learn how to build your own investment portfolio.
I'll also teach you exactly how to use money to make money and give you my best investing tips and a
lot more.
Glad you enjoy it here and I'll see you in the next video.