The Only Investing Video You’ll Ever Need (Start With $0)

Okay, so let's say you want to get started with this investing thing. You might have a bit of money saved, it's probably not enough for a house, but you decide you should probably invest in something. You could invest in stocks and shares, government bonds, corporate bonds, real estate, foreign exchange, crypto, NFTs, futures, fine art, watches. Or maybe you've got that one friend who bought Bitcoin in 2013 or Nvidia in like 2015, and then that person got super rich and you're like, whoa, like man, if only I'd done that, I'd have been like mega rich without having to do any work. So there's all these dreams, there's all this confusion, and then on top of all of this, there is the very real fear that you might actually lose all of this money that you've worked so hard to save. So in light of all of this, this is my updated ultimate guide to investing for beginners. And so we're going to split this video up into four parts, which are timestamped so you can skip around if you feel like it. In part one, we're going to talk about the basics and the philosophy behind investing. Then we're going to talk about why and how to invest your money and some nuances around that. Thirdly, we're going to talk about common fears and questions and concerns, like what if I lose all my money? And then in part four, we're going to talk about fast lane investing, which is an alternative approach to building wealth. With that said, let's dive in. Part one, the philosophy and the basics of investing. Okay, so let's start with the basics and let's start by asking the question, what's actually the point of investing in the first place? Now, a lot of people I speak to have the experience where they've managed to save up some amount of money, maybe it's a few thousand pounds, a few thousand dollars, and they're feeling pretty good about it because now they have a safety net and they're being financially responsible. But if you're interested in investing, then you probably know that if that money is just sitting there in your bank account, it's actually losing value every single day. And that is thanks to a wonderful thing called inflation, where essentially over time your money loses its purchasing power. And so obviously $1,000 today buys you less stuff than $1,000 did 10 years ago or $1,000 did 20 years ago. The $1,000 is theoretically the same. It's just that everything else has gone more expensive and therefore you can buy less stuff with the same amount of money. Now the whole point of investing is to be able to put our money somewhere where it makes more money. Firstly, to counteract the effects of inflation. And secondly, if we can beat inflation, then it means like the more you invest, the more money you make, the more it compounds over time. And then that is one of the strategies for building wealth. So if the point of investing is to magically grow your money, you might be thinking, okay, but like, how does investing actually make you money? And here we're going to introduce the term asset. An asset is a thing that puts money in your pocket. So for example, if you think about buying a house and then putting it on rent, you kind of make money in two separate ways from that particular equation. Firstly, you buy the house and then you put it on rent. Therefore, you get rental income coming in from your tenants every month and that puts money in your pocket. And secondly, hopefully the value of the house also goes up over time. This is called capital appreciation. So let's say you win a million dollars in the lottery and you put all of it in to buy a house in cash and you're able to rent out that house for, I don't know, $2,000 a month. Every year, you're making $24,000 in rental income from the house. And maybe if you sell the house 10 years later, maybe it'll be worth 1.5 million. And so you've theoretically made an extra 500,000 from the capital appreciation of the property. In reality, of course, you probably use a mortgage. In reality, there's property taxes, there's like inflation itself and all sorts of more complicated factors. But essentially in this context, you are earning money through rental income and through appreciation of the asset itself. Now houses are an interesting example because they're quite easy to visualize. Like you can imagine theoretically owning house and then theoretically becoming a landlord and having someone pay you rent because you probably pay rent to someone else and so most people when they think of investing they think i should get on the property ladder in some degree especially if your parents were into that sort of stuff many decades ago but for the most part for most people owning a house is actually a relatively inaccessible thing if you are just getting started with investing and so we want to be looking to alternative asset classes now there is a long list of assets that you could potentially choose to invest in there's stocks shares and equities which is sort of the same thing there are hedge funds there are index funds there are government bonds, there are corporate bonds, there are fancy watches, there's fine art, there is crypto, of course, and a lot of this stuff can get very complicated very quickly. So we are going to simplify things and we're going to be focusing on stocks and shares. The reason we're going to be talking about stocks and shares, and this is most sensible people's recommendation when it comes to investing your money. Firstly, because it is very accessible to normal people like you and me. Secondly, you don't need a huge amount of money to get started, unlike buying a property. Thirdly, you don't need to take on huge amounts of risk, unlike something like crypto. And fourthly, you don't need to be an accredited investor of any kind, like for the most part, normal people can just buy stocks and shares. Part two, why and how to invest in stocks and shares. So what does it actually mean to buy a stock or a share? Well, when you're investing in stocks and shares, you're basically buying a small percentage ownership in the company that you're investing in. So let's say I wanted to buy shares in Apple, but first let's answer the question of what even is the point of owning, for example, Apple stock. And the point is that there are two ways to make money from stock. The first way you make money from investing in stocks is that the value of the company increases over time, and therefore the value of your stocks or shares increases over time. Secondly, certain companies... pay what they call dividends. For example, in the UK, there is a company called BT, British Telecom, that pays dividends. And so if you own a piece of BT, even if it's just like a tiny percentage, you're not just hoping that the price increases over time. They're also literally paying out some of their profits to their shareholders. So we've established that there are two ways to make money from stocks and shares. The next question we have to get to is how do you choose which companies you want to invest in? Maybe you have an iPhone and you're like, man, Apple seems pretty good. Maybe you're like, AI stuff seems interesting. I should invest in NVIDIA. Maybe you're an Elon fanboy and you're like, man, I should invest in. Tesla. Maybe you watch loads of Netflix and you're like, man, I should invest in Netflix. Now here are the advice from most sensible people who give advice about this stuff. Not me, I'm not a financial advisor, but sensible people who are basically say, you should not try and pick stocks. This is a wonderful book by a chap called JL Collins. This was like how I got started with investing like 10 plus years ago. He says, you should not try and stock pick. Warren Buffett himself says, you should not try and actively pick stocks. In general, there is a better and safer approach to investing, and that is to buy an index fund. So what is an index fund? Well, index fund can be divided into two words, index and fund. So a fund is basically just like a group of stocks and shares. And then the index component means that the fund tracks a particular stock market index. So for example, in the US, there is a very famous stock market index called the S&P 500, which is basically the top 500 biggest companies in the US. For example, at the time that I'm recording this video, Nvidia, makes up 7.18% of the S&P 500. Apple makes up six and a bit percent. Microsoft makes up four and a bit percent. Other companies that you have heard of are Amazon, Alphabet, which is the parent company of Google, Meta, which is the parent company of Facebook and Instagram. And interestingly, company number 498 out of 500 is Match Group, which is the company that owns the dating apps Tinder and Hinge, which also makes up around 0.01% of the index. Now, the point of the S&P 500 index is that it gives you a single number that you can track over time to see how valuable as a whole the US stock market is. And the vast majority of the value in the US stock market is in these 500 companies. Now, if you look at a graph of the S&P 500 over time, you will see that for the most part, it goes up and to the right, which is what we like to see, but you'll see these moments of decline. And this is where you are in a recession, or you've got like the 2008 financial crisis, or you've got COVID that's just hitting, or you've got like tariffs. So the market as a whole, i.e. the sum of the value of all the different companies goes up over time, but sometimes goes down and then generally kind of continues going back up slowly. So that is what the S&P 500 index is. Now, if you invest in an... index fund, what basically happens is that the money you put into the fund gets distributed amongst the companies in the index. And crucially, this is split based on their weighting in the index. So for example, if I invested $1,000 into the S&P 500 today, in reality, what's happening behind the scenes is I've got $71.80 of NVIDIA. I've invested $65 in Apple. I've invested about $47 in Microsoft and so on across these 500 companies. And this is exactly what people like Warren Buffett recommend in terms of how to get started with investing. most sense practically all of the time and and that is to consistently buy An S&P 500 low-cost index fund. Keep buying it through thick and thin, and especially through thin. Now, the great thing here is that over time, your money is going to track the market. So the money you invest grows at the same rate as the stock market as a whole, if you invest in the S&P 500, which is the US stock market as a whole. You're not trying to come up with some crucial, game-changing insight. You aren't trying to predict 10 years ago that NVIDIA was something going to do well or anything like that. You're not trying to do all of this research into all these companies to figure out which companies are mispriced. of their price to earnings ratio is, and you know, this sort of stuff. You're just saying, you know what? I'm gonna make a bet that as a whole, the US stock market in this case is gonna go up over time. And so I'm just gonna distribute my money. across the top 500 companies. I'm not going to think about it too hard. I'm just going to set it and forget it. And I'm going to do better things with my time rather than comb through spreadsheets and try and research companies. And if we take a historical average over the last, like, I don't know, a hundred years or something, the S&P 500 grows roughly by somewhere between seven and 9% on average every year. Now at this point, whenever someone hears the advice of index funds for the first time, and what I was thinking when I first read this, I was like, Okay. But like, why would I invest in like fricking Campbell's soup company? Why would I invest in like Ralph Lauren? Like these companies clearly aren't going to be big. Obviously I should just invest in tech companies or obviously I should invest in NVIDIA or I should invest in Apple or I should invest in Tesla or obviously I should invest in products that I actually use. Like surely I have, I have enough insight that I can. pick winning stocks that like outperform the market. Now this makes a lot of sense because you might be thinking that seven to 9%, like that's nothing, like that's not that interesting. I want to double my money. I want to triple my money. And in general, when it comes to the world of investing, you should not expect to double or triple your money because that tends not to happen unless, except in very few circumstances, which we're going to talk about at the end of this video. Having a seven to 9% return rate is actually considered really solid. The best private equity firms in the world, I think aim for like 20% returns, but normal people like you and me generally can't access private equity anyway. And so most of us normal people are content with seven to 9% annual compounding returns. Now I want to talk a little bit more about why you should generally not try and pick individual stocks. And the whole idea here is that unless you get really lucky, chances are you are not actually going to beat the market. There have been a bunch of studies and surveys where people have tried this over time. Warren Buffett even did a challenge where he challenged like fund pickers who were like, like literally specialists at picking stocks and basically compared the performance of these like professionals who's in entire job it is to pick stocks against the S&P 500 and basically found that the S&P 500 actually outperforms most funds. most years if you take a long enough time horizon there is also a hidden cost of stock picking because even if you could theoretically beat the market the way you do that is by investing loads and loads and loads and loads of time in actually doing the research to be able to know what you're talking about so like spending hours every week reading financial reports and tracking the news and analyzing charts and worrying about whether you should be buying or selling at each individual moment now that is time that you probably have better things to do with you could probably spend it with your family or your hobbies or building a business if you invest in an index fund it basically takes like 30 minutes or less to get started and then you don't have to put any time into it thinking about it or worrying about it, whereas stock picking is quite different. For me personally, I have a bunch of friends who have invested in individual stocks over time rather than an index fund. Basically, all of them have made less money than they would have done if they'd just invested in the index fund in the first place. And some of them have even lost money overall because they were so convinced that company X was going to do really well and then company X didn't do well and they put too much money in company X. So that's like a scenario in which you can actually lose money, but you're very unlikely to lose money if you just spread it out amongst the top 500 companies in the US or amongst the top... companies in the world. Now I do want to hammer home this point because at this point if you're still with us in the video you might be thinking but like surely stock picking is easy I mean man five years ago I knew that Apple would do well and if I just invested in Apple five years ago I'd be rich right now. Or like, man, you know, 10 years ago, I had a good inkling that Nvidia was gonna get big. You know, I just didn't get around to putting money in it, but had, man, had I put money into Nvidia, it would have gone to the moon. And so what people do is that they get this sort of false sense of like thinking of themselves as being very good investors because at one point, maybe in 2013, you considered buying Bitcoin just like I did and never actually did it. Or like, I don't know, when Disney Plus was announced in, I don't know, five years ago, I was like, huh. maybe i should invest in disney stock and i never did and i'm like oh man disney stock is so up man if only i'd invested in disney stock i'd have been i'd make so much money etc etc the thing to keep in mind is that unless you actually invested in bitcoin in 2013 you can't say that like man i'm such a good investor i i knew bitcoin was going to do well because like everyone's like i knew it was going to do well and unless you put your money where your mouth is it really doesn't count secondly if you did invest in bitcoin in 2013 or in video in 2013 when would you have sold would you have sold when the price 5x is or 10Xs or 100Xs, like how would you have known to hold on for the next like 15 years because like stuff was gonna go up and down and ultimately up. Let's say you own Nvidia stock right now. Nvidia is at an all time high in its stock price. Do you keep on holding or do you sell? Do you think, man, this AI boom is a bubble. So do you sell Nvidia because you're like, there's OpenAI and all these Microsoft and all these companies, it's all just like a bubble and it's gonna pop. Why didn't you sell six months ago when everyone was like, oh my God, Nvidia's dying, stock price is going down. Like loads of people sold at that point. Like what is it about you that would have kept you holding onto the stock? It is so easy. easy to delude ourselves into thinking that we are good investors just because we had a thought a few years ago that like I should probably buy Nvidia and then didn't actually do it. Or even if you did buy Nvidia a few years ago, you maybe just got lucky. And it has nothing to do with like your quality as an investor because there are literally full-time professionals whose job it is to pick stocks. They do it for 60 to 80 hours a week. And in general, over time, index funds outperform even those people who are putting their entire life's work into trying to pick stocks. Generally, the younger you are, the more prone you are to wanting to do individual stock picking because your memory is just not long enough. For example, if you happen to be one of the 20% of people who watch this channel who are over the age of 40, you probably remember Kodak in the 1990s. They were absolutely huge. could have imagined a world without Kodak because they were absolutely massive. Like they actually invented digital cameras back in 1975, but they didn't want to market the digital camera because it would cannibalize their like film camera business. And now no one uses a Kodak anymore. It's kind of like retro nostalgic tech because they filed for bankruptcy in like 2012. Or if you have the memory of like 20 years ago, Blockbuster was like absolutely massive. People would go to a Blockbuster store on a Friday night and like rent a movie. Netflix literally went to Blockbuster and said, hey, do you want to buy us for $50 million? And Blockbuster CEO laughed in their face. And now there is one Blockbuster left on the planet and Netflix is worth hundreds of billions of dollars. If you speak to your parents or your grandparents, there is no way they would have ever imagined that Lehman Brothers, 158 year old investment bank would never not be around because it was just too big to fail. It survived the civil war, it survived two world wars, it survived the great depression in the US. But then in September 2008, it just collapses in a single weekend. And people who have worked there for decades, who have their entire retirement savings in the bank, who have their entire like stock portfolio in like the Lehman stock, those people lost everything overnight. Now the point is the more life experience you have, the more you know that these are things, right? Like every single generation has examples of companies that were too big to fail. Right now, I cannot imagine a world without Apple, or without Tesla, or without Netflix. But neither could the chaps in 2008. They could not imagine a world without Lehman Brothers. The point isn't that you don't want to invest in Netflix and Apple and Nvidia. The point is you don't want to only invest in Netflix and Apple and Nvidia. You want to try and diversify your holdings across multiple different companies, rather than betting your entire financial future on a single company. Okay, so at this point, if you are sold on index funds, then you might be asking the practical question of like, how do I actually buy them? Unfortunately, you cannot just go to s&p500indexfund.com slash buy. You have to go through a middleman and that middleman is generally referred to as a stock broker. Back in the day, it was a real life person that you would phone up to buy and sell stocks on your behalf on the New York Stock Exchange or the London Stock Exchange or whatever. Nowadays, it's not a real person. It's just online platforms. There are loads of them depending on which country you're in. So you just Google like stock platform and then insert your country name. Like Vanguard is one of the big global ones that's available in lots of different countries. They're also available in the UK. So I have a lot of my holdings in Vanguard. Trading212 is another app that me and my wife and you have been using for years. So I mostly have my holdings split across Vanguard and Trading212. Speaking of, we should reach out to Trading212 to sponsor this video. So if that deal goes through, you will hear a sponsored message now. All right, so I'm going to tell you about Trading212 who are very kindly sponsoring this video. Trading212 is a fantastic online investment platform. Me and my wife Izzy were both using it independently and have been for years, even way before they started sponsoring the channel. The platform makes investing super easy, super straightforward. There are no commissions. You can sign up with as little as like 10 pounds. You can sign up to fractional shares and there's none of that. unnecessary friction that stops people from ever getting started if you're really scared of investing they even let you get started trading with practice money so it's not real money but you're using practice money on the real market so you can see if you had invested 100 pounds or a thousand pounds or whatever the thing is what would you have made or what would you have lost if you're super super scared about it and so it's a really nice like entrance point for people who are new to investing the fractional shares bit is really useful it means you can invest in expensive stock like apple and google and stuff without needing to buy a whole share you can buy a fraction of a share and they're pies and all auto invest features are also really good. So the PIES feature is essentially, you can basically just like browse other people's like asset allocation portfolios, and you can copy and paste their asset allocation into your own portfolio if you want. And the auto invest feature is also really good because then you can put your investing on autopilot, like every month it can deposit a certain amount into whatever stocks or funds or whatever you want. And they handle everything else, including dividend of reinvesting and asset rebalancing. And these are the sorts of services that used to in the past be only available to high net worth individuals. As a bonus, if you sign up to TradingTuber12 using my link, you will get a totally free fractional share worth up to 100 pounds. So it's free money, you might as well. There'll be a link down below, or you can go to trading212.com slash join slash Ali to get your free fractional share. So thank you Trading212 for sponsoring this video and let's get back to it. Oh, that worked well. It's pretty good. Seamless integration. Fingers crossed. But anyway, even with all this information, there are probably some fears and concerns in the back of your mind. So let's talk about those. Part three, common fears and concerns and questions. Fear number one, what if I lose all my money by investing? This is the big one. This is the thing that stops most people from ever getting started with investing because... Like, oh my God, what if I lose all my money? What if something like 2008 happens and like you had all your money in Lehman Brothers and then it collapses and then suddenly you're bankrupt? Oh my God, that would be terrible. Now, this actually is a totally legitimate concern. I was worried about this until 2015 when I read The Simple Path to Wealth by JL Collins for the first time and realized that I didn't need to worry about it too much. So let's put some numbers on this. The biggest crash in recent memory was the crash of March 2020 when COVID was happening. You're probably old enough to remember that. Now, let's say you'd invested $1,000 into the S&P 500 at... exactly the wrong time, just before the crash, so like early 2020. And then COVID hits, and then in a single month, in March 2020, the market, the S&P 500, drops by 34%. So your $1,000 is now worth $660. You have lost $340. Oh my goodness. At this point, you're thinking, oh my God, I knew I shouldn't have done this investing thing. I'm losing so much money. My money, oh my God, I've lost this $300. The world is literally shutting down. Oh my God. Now, if at that point, you decide, screw it, I'm just gonna sell. I don't wanna lose any more money. Then you have realized the loss because you bought the index at $1,000, you sold it at 660. So you have literally bought high and sold low, which is the opposite of what you should do. And so you've lost $340. But if you had just held on, if you'd been like, you know what, I'm just gonna hold on. You know, I knew that investing in stocks and shares was like a little bit risky, but it gets a lot less risky if you just like hang on and just leave your money in there for a long time. The market literally recovered to its pre-crash levels by August. So it took five months to recover. back to where it was before. So within five months, you'd have been back up to $1,000. And then it just kept going up and up. And by the end of 2021, your $1,000 would have been worth $1,400. And by the end of 2025, that same $1,000, if you just held on through the crash would have been worth over $2,100. So in that five year period where we all lived through a pandemic, you would have more than doubled your money if you had just held on. assuming you had invested in the worst possible time. Now, yes, back in 2008, it took like a few years for the market to recover, but recover it did. And even if you'd invested in the stock market at the absolute worst possible time, just before the 2008 financial crisis, you would have still made way more money in the long run if you just held on. And the key insight here that I learned from this book and a bunch of research since is that for the most part, the stock market goes up over time, as long as you have a long enough time horizon. It's sort of the same with house prices like for the most part in most countries, in most cities where people actually want to live, if you buy a house today and try and sell it next week, maybe the price has gone down. If you try and sell it next month, maybe the price has gone down. But if you try and sell it 20 years from now, chances are the price will have gone up quite significantly. So basically the longer you can leave your money in the index funds without touching it, the more it compounds over time. And apparently Albert Einstein had that quote of like, compound interest is the eighth wonder of the world. Okay, but like seriously, you know, this is my hard-earned cash I'm investing here. Like what would have to be true for me to lose all my money? So if you're investing in the S&P 500, in order for you to lose all of your money, the value of top 500 companies in the US suddenly has to drop to zero overnight. What are the chances of that? Like if all of the top 500 companies in the US suddenly had their entire value disappear overnight, we would probably be living through an apocalypse. We'd probably have way worse problems than the value of your stock market portfolio. And the money that you invested in those stocks probably wouldn't even be worth the paper it's printed on because like, civilization has collapsed or something like that. Now, I think it's a very reasonable bet, personally, that the stock market is gonna go up over time, over a long enough time horizon. And there's a few different reasons for that. So firstly, human productivity is a thing and human productivity compounds. So if we imagine a company like Nvidia, Apple, Amazon, Meta, like these companies that make up, you know, the top few companies of the S&P 500. Every day, there are thousands and thousands of people that go to work where their job is to literally add value to the company, right? Like they make stuff, they invent things, they create a new iPhone, they make a new chip. All of that stuff creates real value. Like one thing that I didn't quite appreciate. before I started getting into investing is that the value of a company is not just people gambling on like, I reckon Elon's gonna be great, therefore Tesla price should go up. I mean, in that context, it kind of is but like the value of a company is a real thing and in general the more revenue the company has the more profit the company has the more product the company has the greater that value is and so because people are continually doing work you would expect the value of companies where people are continually doing work to go up over time because value is literally being created every day the second reason is that the world keeps on getting bigger so like 20 years ago we had like 6 billion people in the world now we have like 8 billion people in the world more people means more customers and more transactions and more economic activity there's hundreds of millions of people in asia and africa and south america who are like buying stuff like entering the consumer economy for the first time, more and more people are getting access to the internet every single day. These people are buying iPhones, they're opening bank accounts, they're like subscribing to online software. So the fact that like in general the world's population is increasing is another reason as to why you would expect the value of companies to go up because there are more consumers who want the stuff that the companies make. Thirdly, I think it is a reasonably strong bet that the value of something like the S&P 500 index fund will go up over time is because it is a self-healing index. So it's not like a list of 500 companies that never changes. It's a curated list of 500 companies. So if a company starts failing, it gets kicked out of the index and it gets replaced with a new company. Something like Blockbuster disappears and something like Netflix takes its spot. So you can kind of think of the index as the sort of like best of Spotify playlist that's like constantly being updated with whatever is most valuable. at that given moment. And so you're not betting that any single company will survive forever. You're not even betting that like these top 500 companies will survive forever. You're just betting that the top 500 companies in the US, in this example, at any given time will collectively grow because people are going to work and creating value within these companies. At this point, you might be thinking, but like the S&P 500 is just American companies. And you know, America is going to collapse because of Trump or because of Elon or because of the woke people or because of the immigrants or because of insert whatever flavor. you would want in that. It's like, you know, and to that I would say, yeah, that's actually a fair point. That is why you don't have to invest in the S&P 500 index fund. There are things called global index funds. So there's the Vanguard FTSE All World Index Fund, which is sort of like the S&P 500 in that it is an index fund. But instead of investing in just the top 500 companies in the US, instead this fund splits your money across the top... 3,700 companies across 49 different countries. So if you put $1,000 in that, you're getting a little bit of Apple, you're getting a little bit of Microsoft, but you're also getting some Samsung from South Korea. You're getting some TSMC in Taiwan. You're getting a little bit of Toyota in Japan. You're getting a little bit of LVMH in France. So even if, for whatever reason, you believe that the US economy is heading for decline, the global economy probably isn't. And so you can just spread your money when you're investing across like global companies rather than just US companies. And the nice thing about the Vanguard All World Index is that it automatically adjust its weightings based on where the value is. So if the US suddenly shrinks and let's say India's economy suddenly booms, then your distribution of investments will naturally shift to wherever the growth is happening. So again, you're not gambling that like a particular company or a particular country is going to win. What you're basically saying is I reckon humans across the world who are working in companies will be creating more value over time and there will be continued demand for that value. Therefore, the price of everything is going to go up over time. So with all that said, you might be asking the question of like, okay, cool, I'm sold. How do I get started? How much money do I need to get started? The answer to this question depends on the platform. Most sensible platforms in most countries, you can get started with like a dollar or like $10 or like $100, like generally a small amount of money. Again, I would do some Googling or ask Chajibiti or Claude to figure out like what the best... free platform is depending on what country you're in. You should be able to find a platform that is completely free. You shouldn't have to pay for it unless you're in a country that has weird regulations and stuff. But for the most part, you can do this for free with very little money to get started. Oh, by the way, if you're enjoying this video so far, I would love to hear from you in the comments. What has been your biggest concern about getting started with investing? And if you haven't yet, like what's the thing that's holding you back? Okay, so at this point, we've covered the traditional approach to investing, but there is a final thing we need to talk about because yes, of course, we all want to be rich in 30 to 40 years. But it would be nice if we could get rich in 5 to 10 years, 15 years, rather than having to wait 30 to 40 years to build true wealth. And that is where we come to part four of the video, which is fast lane investing, the alternative approach to building wealth. Now, what we've talked about so far is what MJ DeMarco, author of The Millionaire Fast Lane, calls the slow lane approach to building wealth. He's a bit disparaging about it, but basically it's like, I've got some money, I've got a day job, I'm gonna save 10% of my income from my day job. I'm gonna put it into investments like stock market index funds or like real estate or whatever. And then 50 years from now, that money is gonna compound and then I'll be a millionaire and stuff. Now, this is a very slow form of investing. It's totally fine. And I think it's very important to do as part of a diversified balanced portfolio and balanced life and stuff. But there is another approach. And that approach involves reframing what investing actually means. Now, when we hear investing, a lot of us default to thinking that investing means taking our money and buying an asset with it like stocks and shares or like buying a rental property but if we really think about it from first principles what is the point of investing money the point of investing money is for your existing money to make more money further down the line the point isn't explicitly to invest in stocks and shares or like watches or like i don't know fine art the point is to grow your money and the stocks and shares or the rental property or the watch That's just a vehicle by which you turn your money into more money. So if we imagine something like, you know, 7% returns in the S&P 500, let's say you've got a spare $10,000. If you put the $10,000 in the S&P 500 today, on average, it'll be worth $10,700 next year. So then the question becomes, can I find a way to invest that $10,000 or whatever the thing might be so that it can make more than $700 in the next 12 months? And generally to that, the answer is usually a hell yes. So there's a couple of different options here. Option number one is if you invest in your own ability, to make money. So let's say I have a job, like I'm a healthcare assistant in a hospital, and I could spend a thousand pounds to take a new course that gives me a new certification, and that certification, like being a phlebotomist, allows me to increase my hourly rate. So if I'm making, let's say, $15 an hour as a healthcare assistant, and this new thing lets me suddenly make $30 an hour as a phlebotomist. I've invested in my own skills and my own credentials, and as a result, I've literally doubled my earning capacity. And so with an additional four hours of work, what's that? An extra $60? With 40 hours of work, so 40 hour work week, it's $600. So within week two of making this trade, I've already like made back my investment and now it's just like pure profit from there based on like that investment. And so my return on this thousand dollars that I've invested in this course or whatever is way higher than 7% because I've invested in my own ability to make money. And this is generally why investing in your own skills or your own education is very reasonable, provided you can see a path from like, okay, getting that credential or getting that qualification or learning those skills, provided you can see a path to like a sensible return on that investment. I'm not saying you have to buy courses and stuff, but you can find stuff for free on YouTube. I'm just saying that there's often more value in investing in your own ability to make money. than there is in investing in like 500 random companies in the US, if you had to choose. And then we have option number two, which is to actually invest in your own business. And that is another form of fast lane investing. Now, obviously this only applies if you have a business or if you want to start your own business. If I use my own business as an example, when I was 18, I started a business helping kids get into med school. In year one, it made about 8,000 pounds, like $10,000. In year two, it made about 80,000. In year three, it made about 150,000. So we eight X revenue in year one. and we 2X'd revenue in year two. And then I sort of stayed at 150,000 for a few years. And then a few years later, in like 2020, boom, went up from 150K to like 1.2 million. So we did 10X in revenue again. And then the next year we 4X'd in revenue from 1.2 million to $4.6 million. I can't remember the exact currency. If we consider the 12-year period of this, that's way more than 7% per year. Now, if you were to put money at Apple, it is very unlikely that Apple will 10X its value in the next 12 months because they're already absolutely huge. And the bigger you are, the harder it is to grow, at least in terms of percentages, because you're already so huge, right? But if, for example, you took $1,000 and you used it to start your own business, it is totally reasonable for you to have made 10 grand by next year, or even 100 grand. You know, I've got this thing called the Lifestyle Business Academy, which is like an online business mentorship. thing for beginners starting businesses. We have some people who've started a business for the first time. And within like three months, they made 10 grand and they're on track to make 100 grand within the first five months. And so if you think of the investment in starting their business, for example, and maybe investing in an educational program or mentorship program or whatever, like they're getting a way better return on that particular investment compared to just investing in the S&P 500. And if you're interested in this sort of approach to building your own business, where you could take some amount of money, it doesn't have to be a huge amount, you could invest it, a small amount of it, like maybe even a few hundred dollars, maybe even less in starting your own business. That business could be something like a lifestyle business. that could quite conceivably get you to 100K in revenue within about 12 months. If you're interested in more details about that, I have a video over here somewhere that breaks down that concept in more detail. In general, I think it is good to invest a good chunk of your time, energy, and money into starting your own thing and improving your own ability to make money, and then investing the rest into something like the S&P 500, which is what I've been doing for the last 10 plus years. So yeah, you should totally check out this video over here if you are interested in potentially starting your own business to drastically increase your rate of return. Thank you for watching, and I will hopefully see you there. Bye-bye.

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Hey friends, this is the investing video I wish I had when I started back in 2015. I'm walking through the complete beginner's guide to investing in stocks and shares, addressing common fears like "what if I lose all my money," and sharing the alternative approach to building wealth that goes beyond just putting money in the market. Hope you enjoy xx

🔗 LINKS MENTIONED IN THIS VIDEO 

📗 The Simple Path to Wealth by JL Collins: https://geni.us/LEU0wG

📘 The Millionaire Fastlane by MJ De Marco: https://geni.us/o1uBB

⌚️ TIMESTAMPS 
00:00 - Introduction
01:00 - Part 1: The Basics and Philosophy of Investing
02:04 - What is an asset?
04:02 - Part 2: Why and How to Invest in stocks and shares
04:50 - How to choose which company to invest in
09:21 - Why you shouldn't pick individual stocks
14:22 - How to buy index funds
16:37 - Part 3: Common Fears, Questions and Concerns
17:15 - What if I lose all my money?
18:57 - Why the stock market goes up over time
22:18 - Global index funds
24:25 - Part 4: Fastlane Investing
26:06 - Option 1: Invest in yourself
27:24 - Option 2: Invest in your own business


PS: I donate 10% of my income to charity every year. Would you like to join me? Learn more about the 10% Pledge: https://aliabdaal.com/giving-what-we-can/