evening gentlemen and ladies in my last video I addressed what it actually takes
for someone to become a millionaire it was just the average person I left you
with a little bit of a cliffhanger we talked about how time is of the utmost
importance to start investing now and become a millionaire in your lifetime as
we talked about investing is an epidemic for most Americans
because they're so reliant on Social Security with Social Security hanging in
the fringes it's doubtful that I'll ever even see Social Security that I'm paying
right now so with that in mind and with the intent of becoming a millionaire
let's go over what exactly it takes to start investing right now a good place
to start is if you're employed a lot of employers offer a 401k program that's
usually matching at a certain percentage for me at my current job situation
they'll match 6% of my annual income contributions so what exactly does that
mean that means that if I choose to be a part
of my employers 401k contribution I will elect to give 6 percent of my
income to a 401k program and they will match 6 percent as well so for the
average American making fifty nine thousand dollars a year 6 percent of
their income is around $3,500 a year now again if this is matching you multiply
that times two so that's over $7,000 invest into a 401k every year now that
seven thousand dollar amount is well above the five thousand dollar amount
and the example we used in the last video so this amount paired with you
starting early starting young will lead you to a million
status in no time unfortunately a majority of people my age in their 20s
do not take part in the 401k contribution even if they happen now you
have to understand that's money left on the table that is a salary that is not
being picked up by the employee if the average American decides to not
contribute to the 401k at all they're leaving that $3500 every year on the
table which over the course of 45 years equals hundreds of thousands of dollars
so for my employed friends go ahead and look at the 401k contribution through
your employer because you probably have it now the next examples for my
unemployed or my self-employed friends for you guys I would suggest for you to
consider an IRA I'd prefer a Roth IRA which you can go the traditional route
now traditional versus Roth IRA is not something that we have to cover in this
video I could even do so in a later time or you can cool it yourself but it's
really based off of the tax deferment now it is super important but not
covered in this video yeah so we're still trying to cover the basics now
with a majority of Ras you actually have a little bit more freedom in choosing
what you want to invest in you can do individual mutual funds investment in
other areas that are a little bit more specific like the standard stock market
now the good news for some of those who just want to invest and forget about it
and not touch their account much is that there are Robo investors who will do it
for you and these Robo investors are pretty low fees and does not actually
buy an active manager which is good news for you
now since the IRA route is a little bit more self guided you may be asking how
do you choose that as well the thing I would suggest would be to consider low
fees that's going to help you turn the most money the most compound
the interest every year now I'm not sponsored by nerd wallet but I will
include a description below article by nerd wallet they'll go over how to look
for the are a per your choice and what's you're actually looking for based off an
investment stock and the point I'll make with either one of these investments
it's just to invest and forget about it don't touch the account just set
yourself up for Auto withdrawals from your account and just treat it like a
tax because that's where a majority of Americans go wrong is when they start
messing with their account or they don't set up for auto withdrawal and then
years pass and you miss a ton of potential opportunity and it's not
working to make a ton of money within your
investment account and with my final point here I will say that you can
consider an IRA even if you already do a 401k matching through an employer for
those of you who are wondering I actually contribute to my employees
matched 401k at 6% from my personal company what I've also done is open a
Roth IRA to contribute to that just small amounts every month because I
personally do not want to be employed for much longer so once I am
self-employed I'll roll over my 401k into my Roth IRA and I can explain that
more in a future video if you request it but at this point in the video I just
want to drive home start with what I've talked about thus far if you start
investing in your early 20s you have more room to mess with your investments
later on for example if you retire early you can invest in your 401k at the 6%
amount and open up a Roth IRA as well and instead contribute the maximum
amount that you can contribute every year to
okay which is $18,500 now if you are a go-getter again I will include in the
description below a reddit post that goes over early retirement it actually
includes a flowchart that starts with you investing for your first time all
the way to the different types of investments you can do to maximize your
chance of retiring early now again the purpose of this video was to remain
short for you guys but you can have just a few basics just a few steps to start
you on your journey to investing and again I hope that I can at least be
somewhat of a guide to help you hit that millionaire status at some point in your
life again my name is Jacob Haynes thank you so much for watching this video if
you do have any other questions or suggestions for future videos leave them
in the comments down below