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#1 Investing Tip For People Who Don't Invest In Stocks

Published on: December 2 2022 by Tatiana James

#1 Investing Tip For People Who Don't Invest In Stocks

#1 Investing Tip For People Who Don't Invest In Stocks

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00:00:00 00:00:03 hey everyone it's tatiana and today i
00:00:02 00:00:06 want to chat with you
00:00:03 00:00:08 about investing so maybe you have a
00:00:06 00:00:09 little bit of money that you've saved up
00:00:08 00:00:12 and you would like to invest it
00:00:09 00:00:14 but you haven't taken any action because
00:00:12 00:00:16 you don't feel confident in your ability
00:00:14 00:00:18 to pick individual stoks
00:00:16 00:00:21 or you're totally ignorant to the world
00:00:18 00:00:23 of investing and maybe frankly it's just
00:00:21 00:00:25 better safer to leave that money in a
00:00:23 00:00:28 savings account so at least you don't
00:00:25 00:00:30 lose it if that sounds like you then
00:00:28 00:00:31 don't worry that's a reasonable way to
00:00:30 00:00:33 feel
00:00:31 00:00:34 and i can relate to that because we're
00:00:33 00:00:36 not all
00:00:34 00:00:38 reading the investing books and spending
00:00:36 00:00:40 half our day learning about investing we
00:00:38 00:00:43 got full-time jobs families
00:00:40 00:00:44 other things on our mind and you might
00:00:43 00:00:46 feel like well
00:00:44 00:00:47 i don't know enough about investing so i
00:00:46 00:00:50 can't invest my money and that's
00:00:47 00:00:51 precisely why i'm making this video
00:00:50 00:00:52 today because i want you to know that
00:00:51 00:00:54 you don't have to know
00:00:52 00:00:56 everything there is to know about
00:00:54 00:00:57 investing in order to get started and to
00:00:56 00:01:00 start
00:00:57 00:01:01 benefiting from your investments and the
00:01:00 00:01:04 sooner that you can get started
00:01:01 00:01:06 always the better so if you're making a
00:01:04 00:01:08 five or six figure salary
00:01:06 00:01:09 that's wonderful and you can live a very
00:01:08 00:01:11 comfortable life
00:01:09 00:01:12 off of that but chances are you're not
00:01:11 00:01:15 going to get
00:01:12 00:01:17 wealthy from your salary but if you can
00:01:15 00:01:19 take a portion of your earnings every
00:01:17 00:01:21 month and invest those earnings
00:01:19 00:01:23 then your investments are what can
00:01:21 00:01:24 actually make you wealthy your
00:01:23 00:01:27 investments are what can
00:01:24 00:01:29 help you become a millionaire and so i
00:01:27 00:01:31 want you guys to understand this because
00:01:29 00:01:33 again you don't have to know everything
00:01:31 00:01:34 there is to know and oftentimes people
00:01:33 00:01:36 do have some money put aside
00:01:34 00:01:37 they just don't know what to do with it
00:01:36 00:01:39 and don't feel confident in their
00:01:37 00:01:40 abilities
00:01:39 00:01:43 so i want to share with you today
00:01:40 00:01:44 something called index funds
00:01:43 00:01:46 so index funds if there's anything you
00:01:44 00:01:49 take away from this video is just
00:01:46 00:01:51 understanding this word and you can
00:01:49 00:01:52 google it later and can learn more about
00:01:51 00:01:54 index funds
00:01:52 00:01:56 i will say that i'm not a financial
00:01:54 00:01:58 advisor i'm just an entrepreneur who
00:01:56 00:01:59 likes to make my money grow
00:01:58 00:02:01 and i'm just sharing with you some
00:01:59 00:02:02 things that i've learned and you can do
00:02:01 00:02:04 with it
00:02:02 00:02:06 what you wish so an index fund there are
00:02:04 00:02:09 many different kinds of index funds
00:02:06 00:02:10 one of the most popular is called the s
00:02:09 00:02:13 and p
00:02:10 00:02:17 500 and so it's a fund of the top
00:02:13 00:02:18 500 largest companies in the united
00:02:17 00:02:21 states
00:02:18 00:02:23 so this includes amazon apple google
00:02:21 00:02:25 all of these companies you name it
00:02:23 00:02:27 they're all in this fund the top
00:02:25 00:02:30 500 companies and so what are the
00:02:27 00:02:33 benefits of investing in an index fund
00:02:30 00:02:33 well you don't have to pick individual
00:02:33 00:02:35 stoks
00:02:33 00:02:37 and this is where you know it can become
00:02:35 00:02:38 complicating if you don't know what
00:02:37 00:02:41 you're doing how do you know
00:02:38 00:02:42 whether or not you should invest in
00:02:41 00:02:44 company a
00:02:42 00:02:45 or company b are you confident in your
00:02:44 00:02:47 ability to read
00:02:45 00:02:49 the spreadsheets are you confident in
00:02:47 00:02:50 your ability to determine whether or not
00:02:49 00:02:53 this is
00:02:50 00:02:54 a worthy company of your investment if
00:02:53 00:02:55 you can make a good return on your
00:02:54 00:02:58 investment
00:02:55 00:03:00 yeah maybe not right but that's okay you
00:02:58 00:03:02 don't have to do that so in lia
00:03:00 00:03:03 instead of picking individual stoks you
00:03:02 00:03:06 can invest
00:03:03 00:03:10 in a fund such as the snp
00:03:06 00:03:12 500 so you invest in one fund
00:03:10 00:03:15 and through the one fund you'll be
00:03:12 00:03:18 investing in all these 500 companies
00:03:15 00:03:18 simultaneously so you'll own a portion
00:03:18 00:03:21 of
00:03:18 00:03:24 amazon of apple of google
00:03:21 00:03:25 of tesla of all of these major companies
00:03:24 00:03:27 and
00:03:25 00:03:28 the benefit of this is that if one
00:03:27 00:03:31 company
00:03:28 00:03:33 or a few companies are underperforming
00:03:31 00:03:35 or they're not doing well then it
00:03:33 00:03:37 balances itself out with the other
00:03:35 00:03:40 companies that are doing really well
00:03:37 00:03:42 because there are so many companies so
00:03:40 00:03:43 as you know the term you don't have all
00:03:42 00:03:45 your eggs in one basket
00:03:43 00:03:48 if you have ten thousand dollars and you
00:03:45 00:03:51 put ten thousand dollars into say
00:03:48 00:03:52 um let's say google okay well what if
00:03:51 00:03:54 something happens to google and you know
00:03:52 00:03:56 google goes bankrupt
00:03:54 00:03:57 very unlikely but let's just use an
00:03:56 00:03:58 example well you've lost your ten
00:03:57 00:04:02 thousand dollars
00:03:58 00:04:06 but if you invested into the s p 500
00:04:02 00:04:07 google is just one of the 500 companies
00:04:06 00:04:10 in that fund
00:04:07 00:04:12 so your 10 000 would be invested into
00:04:10 00:04:13 all 500 companies so if google went
00:04:12 00:04:16 bankrupt
00:04:13 00:04:17 that's okay it makes up for it with the
00:04:16 00:04:19 other companies
00:04:17 00:04:20 and any company in the s p 500 that's
00:04:19 00:04:23 underperforming
00:04:20 00:04:25 will get booted out so you're guaranteed
00:04:23 00:04:27 to be investing in the top
00:04:25 00:04:28 performing the largest companies in the
00:04:27 00:04:31 us and the u.s
00:04:28 00:04:33 is the largest marketplace and where
00:04:31 00:04:35 most people invest a lot of their money
00:04:33 00:04:37 you can invest internationally too there
00:04:35 00:04:39 are many types of index funds
00:04:37 00:04:40 but i think most people do choose to
00:04:39 00:04:42 invest in the us
00:04:40 00:04:45 with so many great companies there so
00:04:42 00:04:47 why invest into the s p 500 well again
00:04:45 00:04:50 number one is that you don't have to
00:04:47 00:04:51 pick individual stoks so you don't have
00:04:50 00:04:54 to do the work here
00:04:51 00:04:56 you can just invest into one stok that
00:04:54 00:04:58 is composed of 500 of the top companies
00:04:56 00:05:03 so the average return for the s p
00:04:58 00:05:06 500 over the last 10 years has been 13.5
00:05:03 00:05:08 annually and no one has ever lost money
00:05:06 00:05:09 on the s p 500 if they bought and held
00:05:08 00:05:12 it
00:05:09 00:05:14 for 20 years so the key is long term
00:05:12 00:05:16 so that's another reason why you would
00:05:14 00:05:16 be interested in investing in the s p
00:05:16 00:05:19 500
00:05:16 00:05:20 is because it's very passive you invest
00:05:19 00:05:22 in it and you just keep your money there
00:05:20 00:05:22 you're not day trading you're not
00:05:22 00:05:24 trading
00:05:22 00:05:26 you just leave your money in the fund
00:05:24 00:05:28 and it continues to grow and over the
00:05:26 00:05:30 last 20 years it has continued to grow
00:05:28 00:05:32 significantly well maybe you're
00:05:30 00:05:34 investing your money with your bank
00:05:32 00:05:35 well take note of this the average
00:05:34 00:05:38 actively managed fund
00:05:35 00:05:39 returns two percent less per year than
00:05:38 00:05:41 the market
00:05:39 00:05:43 so that means that most professionals on
00:05:41 00:05:44 average are doing worse than the index
00:05:43 00:05:46 fund
00:05:44 00:05:48 and they're charging you fees so by
00:05:46 00:05:49 investing in the index fund it's a
00:05:48 00:05:51 passive investment there's no
00:05:49 00:05:52 active management you're not paying all
00:05:51 00:05:55 these fees
00:05:52 00:05:56 and it's making you a higher return on
00:05:55 00:05:58 average
00:05:56 00:05:59 than most actively managed funds you
00:05:58 00:06:01 don't have to
00:05:59 00:06:02 entrust your money with one individual
00:06:01 00:06:04 person trusting that they can
00:06:02 00:06:06 individually pick these stoks for you
00:06:04 00:06:07 you're just trusting the market now
00:06:06 00:06:10 don't get me wrong
00:06:07 00:06:12 i invest in individual stoks as well
00:06:10 00:06:14 most of my returns have come from my
00:06:12 00:06:17 individual stoks
00:06:14 00:06:19 my shopify my amazon my tesla
00:06:17 00:06:21 these stoks have performed so well in
00:06:19 00:06:23 my portfolio
00:06:21 00:06:24 however they're far riskier than
00:06:23 00:06:28 investing in
00:06:24 00:06:30 an index fund such as the s p 500
00:06:28 00:06:32 so if you're someone who doesn't trust
00:06:30 00:06:34 your ability to make a decision
00:06:32 00:06:36 to choose individual stoks then this
00:06:34 00:06:38 could be a great option for you
00:06:36 00:06:39 maybe you won't have as high return as
00:06:38 00:06:42 you would by
00:06:39 00:06:42 investing in a shopify but it's more
00:06:42 00:06:45 secure
00:06:42 00:06:45 there's less risk but you could also do
00:06:45 00:06:48 both
00:06:45 00:06:50 now the younger you start investing the
00:06:48 00:06:52 better because there's something called
00:06:50 00:06:54 compounding and compound interest it's a
00:06:52 00:06:56 snowball effect
00:06:54 00:06:57 so it's always the younger that you can
00:06:56 00:06:59 start the better
00:06:57 00:07:00 and i want to give you an idea of how
00:06:59 00:07:02 compounding works
00:07:00 00:07:05 so you can google this you can just look
00:07:02 00:07:07 at a compound interest calculator
00:07:05 00:07:08 and to give you an idea if you were to
00:07:07 00:07:10 invest two hundred and fifty dollars a
00:07:08 00:07:12 month with an eight percent
00:07:10 00:07:13 annual return then in ten years you
00:07:12 00:07:15 would have forty four
00:07:13 00:07:17 thousand dollars with your initial
00:07:15 00:07:18 investment of
00:07:17 00:07:20 thirty thousand dollars over the last
00:07:18 00:07:21 ten years which is twenty
00:07:20 00:07:23 two hundred fifty dollars a month for
00:07:21 00:07:24 ten years would be thirty thousand
00:07:23 00:07:25 dollars
00:07:24 00:07:28 so that thirty thousand dollars would
00:07:25 00:07:32 grow to forty four thousand dollars
00:07:28 00:07:34 now in thirty years you'd have 342 000
00:07:32 00:07:35 with investment of your own money of
00:07:34 00:07:37 only 90 000
00:07:35 00:07:39 and in 50 years if you left that money
00:07:37 00:07:42 there for 50 years
00:07:39 00:07:43 you would have invested 150 000 of your
00:07:42 00:07:47 own money
00:07:43 00:07:50 at 250 a month and it would make you
00:07:47 00:07:52 1.7 million dollars
00:07:50 00:07:53 so that is the power of compounding and
00:07:52 00:07:55 that's why i say
00:07:53 00:07:56 you don't have to be wealthy to get
00:07:55 00:07:58 started you don't have to be rich to
00:07:56 00:08:00 invest just
00:07:58 00:08:01 invest a small portion whatever you can
00:08:00 00:08:04 if 250 is too much
00:08:01 00:08:05 then start lower if 250 if you have more
00:08:04 00:08:08 wiggle room you can invest
00:08:05 00:08:09 300 400 then do it because it's gonna
00:08:08 00:08:12 grow
00:08:09 00:08:13 and that is what's going to help you to
00:08:12 00:08:15 become financially free
00:08:13 00:08:17 and to become a millionaire and the
00:08:15 00:08:20 longer you can keep your money
00:08:17 00:08:21 compounding and invested the better
00:08:20 00:08:23 because it continues to grow
00:08:21 00:08:25 but at any point in time you can take
00:08:23 00:08:26 that money out if you need it so i just
00:08:25 00:08:28 want to share
00:08:26 00:08:29 this with you guys because ultimately
00:08:28 00:08:32 like i want you guys to
00:08:29 00:08:33 benefit uh from investing uh but it can
00:08:32 00:08:35 hold a lot of people back
00:08:33 00:08:37 feeling intimidated by the investing
00:08:35 00:08:40 world and i agree there is so much to
00:08:37 00:08:42 learn and honestly the more i learn
00:08:40 00:08:43 the more i feel like oh my gosh there's
00:08:42 00:08:47 so much more to learn
00:08:43 00:08:48 and it can feel like uh this this black
00:08:47 00:08:50 hole where it's just
00:08:48 00:08:52 there's never you never learned enough
00:08:50 00:08:54 and that's a good thing i think that's a
00:08:52 00:08:56 good thing there's always room to grow
00:08:54 00:08:57 but you don't have to know everything to
00:08:56 00:09:00 get started
00:08:57 00:09:02 so the s p 500 is a wonderful index fund
00:09:00 00:09:04 there are many different types of index
00:09:02 00:09:06 funds that you can explore
00:09:04 00:09:07 there are also etfs exchange traded
00:09:06 00:09:09 funds
00:09:07 00:09:11 which are similar to index funds but
00:09:09 00:09:12 different i'll let you do your research
00:09:11 00:09:14 on that
00:09:12 00:09:16 but this would be a great way i think to
00:09:14 00:09:18 get started with investing
00:09:16 00:09:19 and ultimately guys you don't want to
00:09:18 00:09:22 you know any money that you do
00:09:19 00:09:24 invest into the stok market you have to
00:09:22 00:09:24 be you have to be comfortable with
00:09:24 00:09:27 losing
00:09:24 00:09:29 because investing is is a risky game you
00:09:27 00:09:32 know it's there's no 100
00:09:29 00:09:33 guarantees in the world of investing you
00:09:32 00:09:35 can mitigate your risk by doing
00:09:33 00:09:37 investments such as these
00:09:35 00:09:39 investing in bonds etc there are
00:09:37 00:09:40 investments that are less risky there
00:09:39 00:09:43 are investments that are
00:09:40 00:09:45 more risky so i would make sure first
00:09:43 00:09:45 that you have enough money in your
00:09:45 00:09:48 savings
00:09:45 00:09:51 for emergencies your rainy day savings
00:09:48 00:09:52 and then any additional money that you
00:09:51 00:09:54 want to invest so this would be in
00:09:52 00:09:55 addition to what you have in your
00:09:54 00:09:56 savings
00:09:55 00:09:58 don't just take everything that you have
00:09:56 00:10:00 in your savings for emergencies and
00:09:58 00:10:02 invest it into the stok market
00:10:00 00:10:04 i don't think that's the best thing to
00:10:02 00:10:06 do but again i am not
00:10:04 00:10:07 a financial advisor and i'm not giving
00:10:06 00:10:09 you guys advice
00:10:07 00:10:10 i'm just an entrepreneur wanting my
00:10:09 00:10:12 money to grow and make more money
00:10:10 00:10:14 and i want to share that with you guys
00:10:12 00:10:15 so i hope you enjoyed this video
00:10:14 00:10:17 check out other people's videos on
00:10:15 00:10:18 youtube they tok way better about
00:10:17 00:10:20 investing stefan
00:10:18 00:10:22 my partner he has so many amazing videos
00:10:20 00:10:23 on investing i recommend you watch them
00:10:22 00:10:24 i'll link them in the description box
00:10:23 00:10:26 below
00:10:24 00:10:28 he's got a video about index funds where
00:10:26 00:10:30 he goes in more depth about what they
00:10:28 00:10:31 are and how to get started
00:10:30 00:10:33 and i'll recommend that you watch that
00:10:31 00:10:34 next if you'd like to dive deeper on
00:10:33 00:10:36 this topic
00:10:34 00:10:39 so hope you enjoyed it and i'll see you
00:10:36 00:10:39 next time