Hello and welcome to another video We all perfectly know that the path to financial
freedom is to start investing as early as possible.
We have talked already about why should you invest and how in the previews video ,but
the question that a lot of people have been wondering about is where should you invest?
name me a company or business where I can throw my money in and get rich, unfortunately
i have to disappoint you because i wont be answering that question, because if you watch
this video till the end, you will able to answer that question yourself.
In order to find out where is the best place to invest your money, it would smart to look
at how some of the most richest man do that and follow a similar strategies and this video
is based on ideas of the second richest man in the world - warren buffet
So hit that subscribe button and the bell besides and lets jump in.
There are plenty of places to invest your money, stock market, bonds, real estate and
so on but here on this video we will focus only on the stock market.
Stock market is basically the place where all companies come together to trade their
stocks.
and what is a stock?
its the company itself.
Because companies worth billion of dollars, so they are broken down into little small
pieces that are called stocks.
Lets say for example, facebook worth a 100$, in other words, you can buy the entire company
for a 100$, if its broken into 50 stocks for example, each stock is going to cost 2$.
But unfortunately, prices are way different in the real world, Facebook worth around 400
billion dollars at the time this video is published, so its divided into millions of
stocks.
So, your job is to buy the stocks that will rise up in the future so that you can sell
them for a higher price.
simple?
right?
not really the question is which stocks will rise up?
let me start with the good news.
As warren buffet himself says, you don’t have to be very smart or have a high IQ to
find that out, you just have to be patient.
Stock market is not as complicated as lot of people portrait it.
Its a bit simpler than what you might think.
Behind every stock there is a functioning business, it could be the company thats building
the phone that you are holding or the chair that you are sitting on.
And in order to predict its future stock price, you have to understand the business itself.
If its a solid strong business that has a future, its stock price will keep increasing,
and if its not then the opposite probably will happen.
And the idea is to buy businesses that undervalued, in other words, they are sold for a cheaper
price than they actually worth.
And if why you are wondering how is that possible?
its simple, lots of companies are starting out everyday all around the world, some of
them fail and some succeed and most people don’t know about them when they are still
small.
Of course its not possible to study all the companies out there and be right about each
of them.
and guess what?
you don’t have to.
As warren buffet says, you just have to be right about 2 or 3 of them that you understand
and ignore those that you don’t.
Warren buffet didn’t make billions of dollars by investing into many different companies,
but rather most of his wealth came from few successful investments.
Coca cola, bank of america and few others.
And the same goes to most of other rich people.
in fact Bill gates and warren buffet are old friends, but warren never invested in microsoft
although that bill tried to convince him, simply because he did not understand it.
(video)
Although that he is considered to be the worlds best investor, he never invested in Amazon,
Facebook or google which turned out to be the most successful companies of our time
why? for the same reason.
He did not understand them!
You don’t have to be right about thousands of companies.
The idea is to look for few businesses that you understand and invest if you believe its
undervalued.
Opportunities are all around, businesses succeed and fail everyday.
If you understand tech companies, then focus on them.
If you are good with cars and transportations, Maybe look for start ups in that field that
are working on a technology that might change the industry.
Each of us has different kind of expertise, and you have to focus on the companies you
can truly understand.
In fact, imagine if you are allowed to make only 20 investment decision in your entire
lifetime, you will think hard and long before you actually make one, and thats how rich
people invest.
Of course you have to understand the accounting part of any business before investing there
but we will talk about that in a future video, so make sure you are subscribed.
So don’t invest if you haven’t found that company yet but keep saving your money, go
through hundreds of companies if you have to and the moment you come across something
you liked, then throw your money in!
Keep in mind that: Stocks jump up and down every single day,
so don’t be panic if its going to go down the next day by a little margin because if
the business is really great, in the long run, it will definitely grow substantially!
And now its your turn, what do you think?
Which companies in your field do you think are undervalued and are potentially going
to grow!
Let me know in the comments below!
Hope you enjoyed this video and most importantly benefited,
Thanks for watching and I will see in the next one.