Do you have money laying around, but don’t
know where to invest? Or do you want to start investing with just
a couple dollars? By the end of this video you will know how
you can start investing your money to get the 8% return on investment! Stay tuned Welcome to the last episode of investing in
the stock market for beginners series. You can find a playlist for other episodes
in the description, if you have missed them. They have a lot of useful information that
can help you make your first investment! If this is your first time here, take care
of your finances by clicking the subscribe button! Disclaimer: This video is just for educational
purposes, not for financial advice. Let’s get started! The most important thing about investing is
to start now! You don’t need a lot of money to start investing,
so if you have any money laying around invest that now.



Here's the Video Transcript:

It is important to start as soon as possible,
because compounding is a huge factor in your long-term profits, and because starting is
the only way to get experience, which helps you become better at investing. The first stock you buy won’t most likely
be the best purchase of your life, but with experience you will learn over time. Of course it could also be your best purchase
if you are lucky. When I bought my first stocks I invested $200
to two different stocks. I really had no idea what I was doing back
then, but I got both lucky and unlucky. One of the companies has a return on investment
of 31.78% at the time of making this video. But the other one has -25.90%. Today I most likely wouldn’t buy either
of those two companies, but getting started really made me more interested to start educating
myself.

While this video will be mainly about investing
in the stock market, I really encourage you to invest some money to a savings account. Find a savings account that offers good interest,
you can find some companies that offer around 2%, like ally bank offers 2.1% annual interest. I don’t really consider this investing,
but I think it’s very important to have an emergency fund for a couple months, and
you could also put the money that you are going to invest in the future there. But let’s now get started with investing
in the stock market. The first thing you want to do is create an
investment plan. This plan could include things like how much
money are you going to invest and how often, for example $100 every month.

Where are you going to invest: index funds,
stocks, real estate and so on. How much risk can you tolerate? How long are you going to invest? What are your goals? With a plan, investing is, as Robert Kiyosaki
says, boring like baking a cake, you follow your plan like a recipe. So make your plan! The second thing you want to do when starting
investing is creating a brokerage account. There are dozen options you can choose from,
like fidelity investments, ally invest and robinhood for example. What you should look for is the costs of the
brokerage. You don’t want to spend any extra money
on commissions.

Different brokerages offer different services,
which also leads to different costs. So make sure you are not paying for something
you don’t even use, if some other brokerage offers everything you need for cheaper cost. One rule I use is to never pay more than 1%
of the investment in fees, which is an easy rule to follow if you use the right brokerage
for you. Most of you probably want to know where to
invest to get that 8% return on investment. If you don’t have much time to study different
companies, or you don’t have much knowledge about investing yet, index funds are a great
way to start investing.

Index funds require less time, have less risk
for those that are just starting and require less work. With index funds your return on investment
will be the same as the average market return. With S&P500 this is usually around 8% long-term,
sometimes more and sometimes less, but if we look at a S&P500 for the past 40 years
it’s about 8% with dividends reinvested and adjusted for inflation.

I explained index funds better in episode
one of the series, but basically index funds invest in many different companies, S&P 500
invests in 500 different companies for example. Most investors don’t get better return on
investment than index funds, so it is a great way to invest your money. Warren Buffett recommends investing in index
funds too. The best thing is that they have very low
costs, if any. And you can start with just a couple dollars. If you want to pick the stocks by yourself,
you have to know what type of investor you are. Do you want to invest short-term or long-term? Do you want to be a day trader, or do you
want to invest in stocks that generate you annual cash flow through dividends? Remember that when you start to invest you
won’t pick the best stock, and you could lose everything you invested. So don’t invest what you are not willing
to lose. Here is another important rule for investing:
Never invest in what you don’t understand. As Warren Buffett says, the best investment
is in yourself. So when you are starting to invest and want
to pick your own stocks, read books, go to seminars and watch courses that improve your
mindset.

How to Make Your First Stock Investment (STEP-BY-STEP)

This way you will understand more, know how
to react in different situations and find more opportunities. You have to learn more, to earn more. When you start to pick your own stocks you
have to analyse the company before buying it. With fundamental analysis you are looking
for different financial ratios to know how a business is doing. This analysis will tell you if the price of
the stock is correctly valued. You should aim to buy those stocks that are
undervalued. There are different financial ratios that
you can use to analyse the companies, like price-to-earnings ratio, net margin profit,
quick ratio and so on.

You can watch the episode four to learn more
about financial ratios. All the publicly traded companies that you
can trade in the stock market have to release financial statements, so you can analyse those
by yourself, or you can use websites that calculate ratios for you. One good website is investing.com for example. The financial statements can be found in companies
websites, like Coca-Cola has a category for investors, where you can find financial reports
for many different years. Summaries of those statements can be found
in many different investing websites. If you are looking to invest short-term, you
want to make technical analysis. With technical analysis you are analyzing
statistical trends from past trading activity. This means things like how the price has changed
and how actively people are trading the stock, aka the volume of trading. The point of technical analysis is to forecast
the price movement, so you know if you should buy it or short sell it. Personally I started with fundamental analysis,
and I think it’s easier for beginners to start with that. When you have more experience about investing
and how the stock market works, you should try to start combining fundamental and technical
analysis.

Of course if you want to become a day trader
you can start to study technical analysis immediately. But how can you find a stock that you want
to invest in? Well one way is to think about something that
you know about a lot, or that you are familiar with. Everybody knows what Coca-Cola is, so you
could just go and read Coca-Cola's financial ratios and think, is it correctly valued or
is it overpriced? Another great way to find stocks is different
sectors. Let’s say you know everything about technology. You can go to the technology sector and you
will see all technology companies there. Now you can just find companies that you are
interested in, and then go look at their financial situation. The website shown on the video is stockmonitor.com,
a link can be found in the description. After you have found your stock, or the right
index fund for you, just go to the brokerage website and log in to your account.

Then just search for the company that you
want to buy, and how much you want to buy it. If you need help buying the stocks, don’t
be afraid to ask the brokerages for help, they usually have a chat or a phone number
to call for help. And there you go! You have now became a stock investor! Let me know in the comments did you think
it was this easy? Also feel free to ask any questions, I will
reply to all of them! Let’s briefly summarize the main points
of this video. Start investing now! That is the only way to become better at investing,
and compounding is a huge factor in your long-term profits. Invest some money in a savings account with
a good annual interest rate. This will be your emergency fund for a couple
months.

Create an investment plan. Ask yourself questions like what are your
goals, how much money are you going to invest, and what type of investor are you? Create a brokerage account. Compare different brokerages to find the best
deal for you. Don’t pay commission on things that you
are not even using. Index funds are a great way to invest for
the average market return on investment. It also saves you time, is less risky when
you are a starter, and require less work. If you want to pick up stocks by yourself,
understand what you are investing in, and study the companies with a fundamental or
a technical analysis. Use different financial ratios for fundamental
investing. And lastly find a stock that you are familiar
with, either think about some company you use on your daily basis, or search for them
with different sectors. When you have found the right stock for you,
go to the brokerage website, and buy the amount you want to buy. Congratulations! You are now an investor! As mentioned If you have any questions feel
free to ask them in the comments, I will reply to every comment! If you want to know how to become an Ultimate
Investor, you can check my book summary for Robert Kiyosaki’s book Rich Dad’s Guide
to Investing.

Like and share the video if you find it helpful
and subscribe if you are interested in more financial education! Have a great day and I’ll see you later..