How to think about investing.
Today,
we are going to unlock the
secrets of the investing
strategies so that you can
actually be successful with
investing your money.
I am Tiffany Thomas,
your wealth mentor.
I achieved financial freedom
in my thirties and became a
millionaire at age 40.
I'm here to help you do that
even earlier and easier.
So let's dive right in.
All right,
today we are going to learn
how to think about investing,
and I'm going to share my
knowledge and mindset on how I
was able to invest
successfully to become a
millionaire and become
financially free and make sure
and stick around until the
very end of the video because
I'm saving the best for last.
All right.
The first thing we want to do
when we are thinking about
investing is to define our
investment goal.
What is it that we want to
achieve with investing?
This is what I did and I,
one of the things that I
wanted to achieve was to
become financially free.
So when I set that goal,
I could figure out how I could
become financially free,
but if I never set that goal
in the first place,
then I never would've worked
on becoming financially free
because it wouldn't be on the
top of my mind.
I wouldn't even be thinking
that I could achieve that
goal.
So really think about why you
are investing.
Are you investing to save up
for a down payment on a house?
Are you investing for
retirement?
Are you investing to leave
generational wealth for your
posterity?
What is one of the reasons you
are investing?
What is your investment goal?
And I want you to comment
below and tell me one of your
investing goals.
And we want to make sure that
we are very specific with
these goals.
We want a certain amount tied
to our investing goals and a
certain date so that we know
exactly how much money we need
to have and the date we want
to have that amount by.
For example,
if you want to have a million
dollars invested by the time
you are age 40,
then you would know exactly
what you are working toward
and you can start to work
backward to achieve your goal.
And this is going to make it a
lot easier to invest your
money because if you know
specifically what you're
working toward,
then you can figure out the
best investment vehicles that
will help you achieve your
goal.
And the second thing on how to
think about investing is to
think about the risk and the
reward that you will receive.
With investing there is always
going to be some risk,
but what is the reward that
can be tied to that risk?
We want to make sure that we
are taking calculated risks
and not just being extremely
risky and having the chance of
losing all of our money.
We want to figure out what our
risk tolerance is.
And I go into more detail
about figuring this out in
another video.
I will leave a link above.
You can check it out later on,
but we want to make sure that
we aren't taking on too much
risk that it is going to
affect our decisions with our
investments.
For example,
if we see our investments drop
significantly in the stock
market,
are we going to pull those
investments out or are we
going to think,
you know what?
I know those will come back up
over time and we can still
continue to invest and we for
sure want to be taking enough
risk that we are going to get
that reward.
If we just leave our money
sitting in a savings account,
that is very little risk and
it's also not enough reward.
If we want to retire one day,
we need to be investing our
money.
And one way we can do that is
in the stock market.
So if we are wanting to build
our wealth so that we can
retire,
we want to make sure that we
are investing in stocks and
that way it can build our
wealth.
If we are investing only in
bonds,
that is more about preserving
our wealth.
So we want to take on some
risk and invest in stocks so
that we can get that higher
return.
We also want to consider our
time horizon.
If we are retiring very soon,
then we may want to switch
some of our money over to
bonds from stocks.
But if we have plenty of time
to invest our money,
then we could have everything
invested in stocks and be fine
with that.
We want to strike that right
balance for our own situation.
For me personally,
when I first started investing
and didn't really understand
how to invest,
I did have some money in
bonds,
but once I realized that I
wanted to be growing my wealth
and I had plenty of time to
invest,
this was in my twenties,
I got rid of my bonds,
and so now I only have money
in stocks and I also have
money in real estate,
but I don't have any money in
bonds because I still want to
continue to grow my wealth.
And then the third part on how
to think about investing is to
educate ourselves about
investing.
And investing does require us
to continue to learn and
become more educated about the
stock market or about real
estate or whatever it is that
we want to invest in.
We don't want to just blindly
invest and we definitely want
to know exactly what it is we
are investing in and we want
to be able to explain it to
someone else so that we know
for sure we fully understand
what we are investing in.
I made this mistake a few
years ago.
I had asked my old 401k rep
what he thought I should
invest in.
I wanted to be investing more
money than I was,
and he suggested a life
insurance policy,
and it was a whole life
insurance policy.
And I thought,
okay,
he knows what he's talking
about.
So I signed up for this
policy,
but I didn't fully understand
the policy and I ended up
regretting that decision later
and I canceled my whole life
insurance policy and I lost
thousands of dollars.
But if I would've kept going,
I could have lost hundreds of
thousands of dollars.
Honestly,
I now invest only in things
that I understand and that I
can explain to someone else
because I do not want to get
caught in that same trap again
about investing blindly and
not really understanding the
investment.
And when we are educating
ourselves,
we can definitely seek some
professional guidance like a
financial coach,
for example.
Or there are plenty of YouTube
videos out there or podcasts
or even books for example.
I do have a book out you will
be financially free,
which covers my investing
process.
So there are different assets
that we can take advantage of
to help us become financially
educated about investing.
And if you do want help from a
financial coach from me,
I do have a free masterclass
on how I can help you invest
in the stock market.
I will leave a link below in
the description.
You can click on that and
check out the free
masterclass.
And then the fourth item on
how to think about investing
is to keep a long term
mindset.
This one is so important.
A lot of times people get
caught up in the short term
and thinking they can get rich
overnight,
get rich quick,
and so they make bad
investment choices.
But if we can keep that longer
term perspective,
we are going to be a lot
better at investing.
I know this is true for me.
I have gotten caught up in the
short,
short term wins and thought,
oh,
okay,
maybe if I do this investment,
I can double my money fairly
quickly.
And after I did that,
I thought,
Tiffany,
why did you do that?
You know better.
So this is a constant learning
process and I've gotten better
over time.
No one is perfect,
but the more that we can keep
a long-term mindset,
the better investor we are
honestly going to be.
Because when we are investing
in the stock market,
it definitely goes up and down
and it can go down pretty far
in the short term.
And if we are so caught up in
the short term,
we are going to either take
out our investments or think
we can make a quick win on
certain investments.
And honestly,
it's probably not going to pay
off over time.
We want to invest as though we
can repeat this process again
and again so that we can be
successful.
I like doing what I know works
because I know it works and
it's not worth it for me to
take a risk on something that
is probably not going to work
for me.
There might be a slim chance
that it does,
but I've realized that I know
what works.
And having that longer term
mindset really helps me focus
on what I know works so that I
can actually build my wealth.
That is how I was able to
become financially free and
become a millionaire.
So let's take advantage of
that compound interest and let
our money grow over time.
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Thanks so much for watching.
I'll see you in the next
video.