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How’s it going everybody this is beat the bush for those of you young people out there that just started a job you’re likely starting to look at how you should invest your money a lot of young people have the wrong question in mind it’s not what you should exactly buy in your portfolio but the mentality behind it yes of course there are certain ticker symbols
That you should pay attention to but what matters most is your long term behavior if you’re going to buy or sell at the exact wrong times so today i’m gonna go over some scenarios sort of train you to be more well prepared whenever something bad happens in the market so that you don’t make the wrong move now right off top if you look long enough in these financial
Independence type of articles most of the time they would point you to low-cost index fund you should buy into low-cost index funds so if you just go online look up smp 500 low-cost index funds you’re likely gonna find a handful of very low-cost index funds what is low-cost something around point oh four percent or below sometimes people who work at a bank has a
Lower low cost when they buy into a certain index for example if they work for that particular bank for fidelity or something you can get as low as point zero three percent so don’t be surprised that if they can get a little bit lower than point zero four but for anyone that’s not working for a bank if you’re just working for some company then you can indeed just
Go out there and buy this very very low-cost fun why do you want a low-cost index fund because just 0.01% in fees can add up to be something very very big so you want this fee to be as low as possible and you don’t look at it in terms of 1% or 2% point o 1% is a big deal now because of various investing rules i cannot point you to a specific ticker symbol because
This is just against the law i can get in trouble for recommending a very particular type of stock i can say what i personally buy but i can’t tell you guys hey you know if you’re a young person you should invest in this particular ticker symbol so that’s why in this video i am not saying exactly what it is but it’s very easy to find so just go look for it and
Then you’ll know what to buy so what is the most important thing with investing it’s not me telling you it’s fun to buy it let’s say you have $10,000 and you go open up a brokerage fund and then you go and pour all your money into you know these index funds okay great and all but the more important thing with this whole thing is that you do not waiver when the
Market goes down this as i was telling a young guy at my gathering in fremont because he was asking oh how am i supposed to invest you know i just started work for two years you know you have some sum of money how can he invest so that he would get reasonable gains over a long period the most important thing to realize is what kind of investor you are if you’re
Just starting out you don’t know yourself how you are going to react when the market goes down let’s say you have $10,000 and that’s like your life savings and then you poured it all into a low-cost index fund and then you watched it drop ten percent another ten percent you know another month another month another month and like maybe eight months in you saw your
Whole portfolio of $10,000 drop all the way to $5,000 you gotta imagine how are you gonna react most people will not know how they’re gonna react and most of time when you are surrounded by gloomy people they’re like oh you know the sky is falling and not just a particular day okay this is a sustained long period of gloomy period where you know you see on the news
Every single day all that says some p500 dropped another 5% and you just keep on seeing this people that you know they’re saying oh yeah you know what i’m just had it i finally sold everything i’m not dealing with just watching my portfolio go down you have to realize at this instance after such a long period of doom and gloom are you personally gonna sell out and
History says that most people actually do sell people tend to sell at the wrong time and by the time the market recovers enough you’re already too late to buy back in i personally have seen it myself you really actually have to live through for example the dot-com bust in 2001 as well as the housing bubble popping you have to really live through it to see the craze
That leads up to it and then the doom and gloom that comes after that the duration is real because once you’re surrounded by so many people that’s so enthusiastic for a long period of time you actually tend to buy into it you are living in it versus what you think you’re gonna react is a lot different so as a new investor where you’ve never lived through a downturn
It’s really hard to say how you’re gonna react so i can tell you how you’re supposed to react in all what you’re supposed to do is just keep on dollar-cost averaging into it if you have $10,000 and then you’re only bringing in let’s say $1,000 more into the investment account you might want to spread it out over i don’t know 10 months or one year so the first buy
Is only $1,000 or something and so you keep on buying until maybe one year later then you finally are fully invested into it this is dollar cost averaging then even during a downturn you keep on buying into it this is what you’re supposed to do this is what many people sort of know that you’re supposed to do but then a lot of people actually do not follow this
So your biggest concern as a young investor is to know what you’re supposed to do and actually do it now for you young investors out there one of the more important things to avoid is the trading fee a lot of times if you just go get some random brokerage account you might charge you something like $9.99 $7.99 for each single trade or so it does matter where you
Open up your account so that you can actually do your monthly buy-in for free this is especially important for dollar cost averaging because you don’t want to go all every single time you buy let’s say $100 you have to pay 10 dollars worth of trading fees so the important thing is to get one of the free brokerage accounts which is robin hood or m1 finance or if
You have more than 50 thousand dollars of investable assets you can open up a bank of america merrill edge brokerage account and in that case you can also get some free trades that way now if you guys are interested in supporting this channel you can open up a free robin hood account and you can get free trades that way and if you open up through my referral link
You can get a free stock they say you can get something like an apple stock or a facebook stock but those things are like a hundred some dollar so you definitely have a very low chance of get in my experience i got something like four or five dollar value some you know stock like that so most likely the free stock that you’re gonna get it’s gonna be or somewhere
Between three and five dollars alternatively there’s more and more companies that offer free traits including an app called m1 finance this app which is pretty new it also offers free trade so if you want to support this channel check out my referral link down in the video description below for m1 finance recently we saw the snp drop a lot and the sound investor
What you’re supposed to do in this situation is not really care even if you have a lot of investable assets in there maybe 100 percent of your invisible portfolio is totally into stocks you should just go yeah whatever which is basically what i’m doing i don’t really care if it goes down five percent ten percent the way i look at it is that oh great you know five
Percent ten percent down okay let me just buy some more if it happens to be that time of the month where you’re buying into it again so in fact if it drops by another 10 percent 20 percent 30 percent then i’ll be like oh my gosh this is like a steal of a lifetime then i’m totally gonna you know put more and more cash in it it’s gonna be like a fire sale so once
You buy into it then you’re like oh yeah you know wait a year or something and then you’re essentially gonna make double because you know after a few years it kind of bounces back so why should you believe that it will actually bounce back even because you know maybe there is some doom and gloom situation where the price of the stock is gonna go down to zero the
Idea here is that the companies that’s behind the smp 500 it’s worth something right they’re always going to be generating some amount of profit and basically what they generate is how they are gonna be valued in some way depending on each company’s p/e ratio of course if you think it’s gonna go to zero it’s basically a doom and gloom situation so how many percent
Chance is america gonna fall down to zero it’s gonna be like an armageddon where you know the financial network just completely melts down well there is a small chance of that happening how big a chance do you attribute to it is basically when you think that economy it’s gonna collapse then yeah well maybe you should sell it and buy gold then but the chances of
That happening we have to measure for yourself how big a chance will that be some people say when you use a fiat currency it never lasted for more than a few hundred years for most intensive purposes if the economy goes down you probably have a lot more to worry about than just your assets going to zero people are gonna be out on the streets it’s gonna be you know
No laws or something you likely need more guns then actually cash in your bank in that type of situation so thanks for watching this video i hope you young investors out there kind of get like a brief overview of what you’re supposed to do if you’re interested in supporting this channel check out those referral links for those apps that i refer to in this video
Don’t forget to push that subscribe button and ring that bell icon thanks for watching
Transcribed from video
How to Start Investing $1000 By BeatTheBush
