how to start investing for beginners
DESCRIPTION
As part of my March Money Madness Bracket Challenge, here's the first in a series of lessons for the beginning investorTRANSCRIPT
Intro to Investing
Rob Wilson@robwilsontv
What You’ll Learn in This Video• What investing is and what it isn’t
• Why you need to invest
• How to set your expectations
• The most common mistakes (and how to avoid them)
• How to get started NOW
Ground Rules• This is not an exhaustive list of every investment strategy ever
created
• Not investment recommendations
• You will lose money at one point or another
• Not some “Magic Formula” that will tell you when to buy and sell
Ground Rules
Ground Rules
• This is not an exhaustive list of every investment strategy ever created
• Not investment recommendations
• You will “lose” money at one point or another
• Not some “Magic Formula” that will tell you when to buy and sell
Why You Need to Invest
• You are now responsible for your own retirement
• Pensions are becoming extinct
Why You Need to Invest• You are now responsible for your own retirement
• Pensions are becoming extinct
• Shift to 401k put you in charge
• Of course you need to earn more money
• Multiply your efforts many times over
Give Yourself Options• Investing is not all about retirement
• Dramatically alter the course and quality of your life
• Quick story: How I got started
• Dot com Boom
Lost Money
Learned Lessons
Apple Inc.
2005 2014
$36.90
$536.09
Turned $3,700 into $53,000
1350% Return
Give Yourself Options• Won’t retire off of that one trade
• But it provides options
• Start a business? Go back to school?
• Buy a house? Go on vacation?
• More control over your life when you are good with your money
Where Should Your Money Be?
Where Should Your Money Be?
Most Common Mistakes• Procrastination
– No money
– No time
– Don’t realize that Time IS Money
Time Is Money• I can give you $1000 each minute for the next 35 minutes
• I can give you $.01 doubled each minute for the next 35 minutes
-OR-
What Would You Choose?
Time Is Money• $1000/minute x 35 minutes = $35,000
• .01 doubled each minute for 35 minutes =
$171,798,691.84
The Power of Compound Interest!
Most Common Mistakes• Procrastination
• Investing too safely
Dealing with Risk• Rule of 72
– Divide 72 by the annual rate of return to determine how long it will take for your money to double
– i.e. 72/10 = 7.2 years (stock market)
– 72/1 = 72 years (savings account)
• You need to take some risk and give time to work
Time is Your Biggest Risk Reducer
McDonald’s – 6 Month Chart
McDonald’s – 5 Year Chart
What Does This Mean For You?
Retire on Your Terms• Someone 15 years from retirement
who expects 10% return per year on his investments has to contribute $2400 per month to reach 1 million
• A college graduate with 45 years to save at the same interest rate only has to save $95 per month (at 10% return per year) to reach 1 million
What Would You
Rather Do?
Moral of the Story• You need to be invested
• You are responsible for your financial future
• Time is Money
• Time helps you deal with risk
• Don’t invest in things you know nothing about
Action Item• Start with what you know
• Review the top 20 places where you spend your money
• Create a list of 10 public companies that you do business with.
• We’ll use this list in the lessons that follow.
Join March Money Madness Insider• robwilson.tv/joininsider
@robwilsontv