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In this video, I will teach you how to invest as a beginner starting with $0.
If you’re new to personal finance, investing, or would just like to know a better way to manage your money you are definitely watching The Right video.
In this video, I’m going to give you a 5 step framework to follow on how you should invest your money, and even more broadly manage your money properly for the long-term.
Let’s get into it!
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⏰ Timestamps ⏰:
0:00 – Intro
0:26 – How to Invest Step 1
2:19 – How to Invest Step 2
4:11 – How to Invest Step 3
8:09 – Policygenius Spot
9:25 – How to Invest Step 4
11:17 – How to Invest Step 5
16:07 – LOL
Instrumental Produced By ”iAmHaywood” on IG
ABOUT ME 👇
My mission is to provide my viewers with actionable content that enables them to create financial wealth. My videos are a reflection of my real-world experience as a real estate investor, stock market investor, student of finance, and entrepreneur.
This channel allows me to share my passion for personal finance, stock market investing, real estate investing, and entrepreneurship. I produce content that I would want to watch, and because of that, I give 100% effort in every video that I make. I also believe in complete transparency and open communication with my audience.
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DISCLAIMER: I am not a financial adviser. These videos are for educational purposes only. Investing of any kind involves risk. While it is possible to minimize risk, your investments are solely your responsibility. It is imperative that you conduct your own research. I am merely sharing my opinion with no guarantee of gains or losses on investments.
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Hey everybody welcome back to whiteboard Finance my name is marco and i’m here to Help you master your money and build Your wealth thanks to policy genius for Sponsoring this video but more on that Later if you’re new to personal finance Investing or would just like to know a Better way to manage your money you are Definitely watching the right video in This video i’m going to give you a five Step framework to follow on how you Should invest your money and even more Broadly manage your money properly for The long term let’s get into it okay Number one is that your money needs a Purpose you need to have goals for your Money by now you probably know that you Need to invest but how are you going to Do that properly if you have no idea What you’re even investing for giving Your money short-term and long-term Goals allows you to stay disciplined and Focused on why you’re even investing or Managing money in the first place let’s Start with long-term goals long-term Goals in my opinion are things that you Can save for that are at least five Years away but in most cases these Examples may even be 10 years and longer So most people’s long-term goal is to Have a healthy and financially Comfortable retirement for example But there are other long-term goals as Well do you want a dream home in the
Future well you can start saving and Investing for the down payment on that Home Do you want to take an extended vacation Overseas what about a potential vacation Home to invest in time with your family Figure out what you really want later in Life and set it up as a goal for your Money to work towards let’s take a look At some short-term goals these are Typically less than five years Every year my wife and i make a list of Business and personal goals that we Would like to achieve my goals for the Year are broken down into three Categories they’re usually travel Finance and fitness these these are Things that are important to me and they Are just examples if you have things That are more important to you you can Break down your short-term goals into Different categories as well so within My travel goals i usually have a beach Destination a european destination and One new destination that my wife and i Have never been to so a new place Within my finance goals i typically look To add more to my savings and emergency Fund add some money into our house fund For different projects that may come up Uh funding my daughter’s 529 plan buying More bitcoin obviously and then adding To my taxable stock accounts so you can Use these examples as a framework to
Create your own long-term and short-term Goals um therefore giving your money a Purpose and something to stay focused on Step number two is understanding if you Need to hire a professional do you need Someone should you work with someone Number two is deciding if you would like To work with a financial professional or Not once you’ve established your Short-term and long-term goals you can Dive into the specifics of how you Actually want to save and invest your Money this is where a lot of people Think that investing is complicated it’s Not complicated It could be intimidating could be Complicated which you know it all Depends on the type of investing you Want to do for the everyday person i Always recommend investing in index Funds and etfs for the long run while Diversifying the rest of your portfolio Into other assets such as real estate Bonds cash precious metals and some Cryptocurrencies specifically bitcoin if You are still intimidated by all this There are a few different routes you can Go for choosing help you can work with a Financial advisor who is a human or you Can even go the robo advisor route robo Advisors are typically online advisors That use algorithms and software to Understand how much risk you’re willing To take and then automatically invest in
Assets to achieve that risk profile Both of these are viable options but Keep in mind that this will be more Expensive than you managing your own Investments if you’re looking for Examples of portfolios i have videos on The lazy portfolio the all-weather Portfolio and many others just take a Look at my channel history this will Cover a lot of your bases and keep you Well diversified should you choose to go Your own route but keep in mind that Investing is all about being compensated For the amount of risk you are taking Someone who’s 21 years old and single Will have a much different risk profile Or risk tolerance compared to someone Who’s getting ready for retirement if You’re looking for a simple three fund Portfolio a quick example would be Creating a pie of 60 u.s stocks 20 International stocks and 20 u.s bonds I’m not personally investing heavily Into bonds at this point in time but That’s outside the scope of this video Number three is picking your investment Account type aka your investment vehicle Uh so choose your vehicle that’s a car And notice how we actually have an Internal combustion engine car okay We’re not giving into the ev trend just Yet on this channel okay So This is not a car this is just a type of
Account that your investments will live Inside of uh so in order to buy most Stocks and bonds you’re going to need a Brokerage account somewhere this is the Same as if you wanted to keep your money At a bank you can you can open up a Checking account a savings account a Money market account a cd Any any different type of account this Is no different okay however this is Just choosing the type of account that Your investing funds will live in so Here are a few examples of investment Accounts most of you watching this video Have heard of a 401k this is offered by Tons of employers that take money out From your paycheck and automatically Invest that into the 401k plan that you Have set up with them the beauty of the 401k is that most employers will Actually match your contributions up to A certain percentage so for example Someone’s company may match one hundred Percent of their contribution up to six Percent of their salary for example Sometimes it’s three percent and fifty Percent it just depends if your company Offers this i would recommend that you Contribute up to the guaranteed match This is effectively free money in simple Terms 401ks also reduce your taxable Liability for the year but what you will Be taxable on is when you actually go to Take that money out upon retirement age
So keep that in mind The next example is a traditional or a Roth ira ira stands for individual Retirement account i prefer to discuss The roth ira specifically if you’re Going to contribute to a 401k as well a Roth ira is different than a 401k Because with the 401k you’re Contributing pre-tax dollars okay that’s Getting a tax advantage for that year a Roth ira is the exact opposite you’re Contributing to a roth using after tax Dollars or net income that you’ve Already paid taxes on the beauty of the Roth is that this money will grow Tax-free and will no longer be taxed Because you’ve already contributed with After tax money makes sense the next Example is a taxable brokerage So i have examples of this using m1 Finance if you want to get my free m1 Finance training link to show you how to Use that platform and show you how i Invest hundreds of thousands of dollars You can do so in the description below a Taxable account is simply an account That isn’t related to retirement and not Tax advantaged there are no rules Regarding contribution amounts so how The money in these accounts is managed Is completely at your discretion most Taxable accounts these days allow you to Borrow against them at a low interest Rate adding another weapon to your
Investing arsenal down the road However these are subject to short-term And long-term capital gains tax Depending if you make money or lose Money using this taxable account for Your own trades so i would advise that You first take advantage of all the tax Advantaged accounts such as a 401k and a Roth ira before starting to beef up your Taxable account And finally we have college savings Accounts this is another way tax Advantage accounts uh work for your Child these are typically known as a 529 Plan or a 529 account there’s also a Covered else education savings account Which i’m not going to talk about in This video i personally have a 529 plan For my daughter depending on the state That you’re in you’re able to reduce Your taxable liability by a few thousand Dollars per year based on the Contributions that you make to this Account also if used for educational Purposes the money that grows in this Account is tax-free this means that all Of the earned income is yours to use and You can as long as you use it for a Qualified college cost okay so over the Course of 18 years or so when your child Will most likely use this account that Could be a huge amount because of Compounding interest so speaking of Planning college and children let’s get
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Ready to apply the policy genius team Will handle the paperwork and scheduling For free head to policygenius.com Whiteboard finance to get your free life Insurance quotes and see how much you Could save step number four to managing Your money and how to invest is number Four opening the account now that you’ve Researched the types of accounts that Are available and the benefits that each One of them provides it’s now time to Open one of these accounts or a few of Them if you’re going to open up a 401k a Roth and a taxable account so when Choosing a brokerage or account provider That i like to go with i look for a Long-term track record when i was in my Early 20s i opened up a vanguard account For my roth ira when i was 18 years old I opened up a taxable account with Tradeking because the trades are only 4.95 a trade which isn’t the best reason To go with a company okay The reason i bring this up is because There are a lot of fintech companies out There that will give you free trades uh Which most brokerages do now however These companies a lot of them are Literally less than five years old if I’m going to be saving for many many Many years or if not decades i want to Go with a company that has been around For a long time most brokerages are Online and they will allow you to
Self-manage your account where you can Buy and sell a bunch of different Investments such as stocks bonds and Other things i would go the online Broker out if you’re someone who wants To make your own investments on your own Time this is personally what i’ve done Since i was 18 years old and now i’m 34 At the time of this recording My taxable account my sep ira and my Income portfolio are all on m1 finance Again you can get my free m1 finance Training down in the description below My roth ira is still with vanguard to This day and i use other platforms to Invest in crowdfunded real estate but That’s outside the scope of this video If you are still intimidated by managing Your own investments we can go with the Robo excuse me robo advisor route which I mentioned earlier in this video there Are many robo advisors out there to Choose from such as wealthfront Betterment personal capital they’re not Sponsors of this video but those are Some of the original players in the robo Advisor space all right number five is Invest to swan so that’s supposed to be A swan I wasn’t gonna leave this in but it’s Funny um i don’t know what i mean i know What a swan looks like in my mind but This is what it comes out when i draw This looks like a radioactive swan
Uh anyway so invest the swan so what Does that mean swan stands for sleep Well at night okay sleep well at night Uh so here’s a perfect example if you Are 21 years old you have years to allow For your investments to compound and Earn you money this allows you to be More risky earlier on in life when you Have fewer responsibilities and Dependence with higher risk typically Comes higher reward this is why your Savings account pays you so little in Interest because it’s an almost Guaranteed rate of return the reason Venture capitalists are compensated Exponentially more than people who are Risk averse is because they’re failing 99 times to hit that one home run out of 100. the way i break down my investments Is like thinking of a pie with slices So here if you picture just the big Pizza pie Here’s a bunch of slices okay So i’m okay with 30 of my net worth Being in stocks i’m okay with 40 of my Net worth being in real estate i’m okay With 15 of my net worth being in crypto Currencies the reason for this is Because if any of these slices these Slices of this pie were to go to zero That is the risk tolerance that i’m Willing to take on that So let’s go over some options or slices To speak on that you can invest in so
The first options are stocks these are Individual shares of companies that you Believe will increase in value over time This is like someone saying that they Invested in microsoft google tesla et Cetera individual stocks are okay but i Personally wouldn’t have them make up a Significant portion of my portfolio or Net worth you don’t want all of your Eggs in one basket the second option are Index funds and etfs these are simply Baskets full of stocks that are designed To mimic or track a certain index or Investment type this allows you to buy One share but have hundreds if not Thousands of companies make up that one Share so think of an easter basket i’m Not even going to draw an easter basket Right now Full of different eggs that are a bunch Of different colors these represent Individual companies but the easter Basket is one share of that index fund Or etf makes sense so a good example is A good index fund such as vti This is a great one for beginners you’re Just betting that the stock market will Go up over time This is vanguard’s total stock market Index fund One share of vti contains over 4 000 Publicly traded companies in it The third option are bonds bonds allow a Government or company to borrow your
Money to fund a project or to refinance Other debt these are typically Considered fixed income investments Which make regular payments to the People that invest in them your original Investment amount aka your principal is Then returned on a set maturity date Bonds have historically been less risky Than stocks so this has typically been Used to balance out a portfolio as Mentioned earlier such as the 60 40 Portfolio 60 percent stocks 40 bonds we talked About this earlier And your fourth option is obviously real Estate real estate is a great way to Diversify your portfolio as an Alternative investment so you’re asking Yourself hey marco how can i invest in Real estate don’t i have to physically Buy a rental property or an apartment Building for example Well you can do this but through the Stock market aka the equity market By investing through what we call reits Which stand for real estate and Investment trusts i’ll write this down Cause i know it’s kind of hard to hear Reit reit real estate investment trust They essentially act like stocks but for Commercial real estate so typically Commercial real estate so reits Typically pay high dividends and they’re A great way to diversify a portfolio i
Personally hold reit etfs in my dividend Portfolio If you are the 21 year old with no Dependents and have a high risk Tolerance you’re going to want to invest A majority of your portfolio in stocks If you have a low risk tolerance or Nearing retirement or getting older You’ll want a portfolio that is more Bond heavy and less volatile there are a Lot of factors that are making bonds Unattractive right now at the time it’s Recording but that’s outside the scope Of this video Whichever route you choose let’s go back To step one and remember why you’re Investing in the first place think about Your long-term goals and not trying to 100x your money uh through some you know Crypto scam you know think long term uh The last thing i’ll leave you with is What i just mentioned a minute ago think Of your net worth as a pie each slice Should be a different asset class and Each slice should have a certain Weighting in your portfolio so i hope This video was helpful to everyone who Watched be sure to check out the links In the description below and as always Have a prosperous day Oh my god this drawing is so bad All right so Think of each one of these slices i’m Gonna get rid of this so i can actually
Make this bigger I should have elaborated this More in the video If your pie looks like this Okay Here’s your cash Remember this is just the percentage of Your net worth And this Is Butt Floss Coin Making up Uh 98 of your portfolio Uh this this isn’t good okay Make sure butt floss coin is not 98 of Your portfolio uh if i’m using this as a Joke but i’m serious if you’re gonna Invest in speculative stuff keep it to Like five percent of your net worth That’s the stuff you should really Gamble on everything else should be Solid investments hope this makes sense Thank you guys Little do they know i made 40 gs i’m Butt floss coin baby let’s go
