Welcome to today's video,
how to Be a Better Investor.
If we can be good at our
investing,
we are going to make so much
more money because we are
making our money work for us
instead of us having to always
work for the money.
Today,
I'm going to share my best
tips and strategies on how to
become a better investor.
So let's dive right in.
All right,
I have been investing for a
while now,
so I want to share my tips and
strategies with you on how to
be a better investor 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 item I want to talk
about in order to be a better
investor is to keep a
long-term perspective.
If we can have that long-term
perspective,
we are going to be so much
better at investing.
Honestly,
I have seen this in my own
life.
I got caught up in trying to
make a quick return a couple
of different times,
which I'm not proud of,
but it happens.
But we continue to learn and
get better as we go.
But when I did that I
regretted it later.
And so I just kept thinking,
Tiffany,
you knew better.
Like you knew to keep the
long-term perspective and I
momentarily forgot.
So here I am reminding
everyone to keep a long-term
perspective so that we can be
a lot better with our
investing.
Honestly,
if we do not get caught up in
the short-term movements of
the market and keep that
long-term perspective,
we are going to be better
investors because we can
continue to invest over time.
We can dollar cost average.
We can buy when the market is
really low.
We can buy when it is high,
we can buy when it's in the
middle.
We can average out those
prices over time by dollar
cost averaging by continuing
to invest our money over time
rather than focusing on the
short term and trying to make
a quick win.
Whether that's a quick win
overnight or in the same day
or over a week or two weeks or
a few months,
it will be so much better for
us,
at least this is what I have
seen if we do not focus on
that short-term volatility and
try to make quick wins.
But if we keep that long-term
perspective and know that the
market will continue to rise
over time,
and I have definitely done
this because I have set
long-term goals.
One of those was to become
financially free and I was
able to do that in my thirties
because I kept this longer
term perspective.
I wasn't worried about getting
rich overnight.
I knew that my investments
would grow over time and they
clearly did.
When we are basing our
investment decisions off fear
or greed,
we are not going to make the
best decisions.
If we can take that emotion
out of investing and just
completely focus on the long
term,
what our end goal is,
we are going to make better
choices with our investments.
And one of the reasons is is
because if we see our
investments start to fall,
we are not going to panic or
become fearful and sell those
investments and then see the
market come back up and lose
out because we already sold
our investments.
It is more about time in the
market rather than timing the
market.
And actually we're going to
talk about that later on.
But let's move to the second
item on how to be a better
investor.
And this one is really
awesome.
It is to automate your
investing.
This is a complete game
changer.
If you don't have to think
about investing,
if you can completely automate
that,
it's actually going to get
done.
You will actually be investing
your money because you aren't
relying on yourself to
remember to do that.
There are a lot of investment
brokers out there right now
that offer this automation
process.
We can have that auto transfer
from our checking directly to
our investment account,
and then even sometimes we can
automate which investment we
are choosing so we don't have
to log into our investment
account and select the
investment.
We can automate the whole
process.
And I go into more detail
about this in another video,
so I will leave a link above.
You can check that out later
on,
but we can select the amount
that we want to be investing,
whether that is every two
weeks,
every month,
every quarter,
whatever works for you,
and completely automate that
process.
This is also going to get rid
of that temptation to sell our
investments or to think maybe
we shouldn't be buying now we
can just automate it and
pretty much forget about it.
Of course,
we want to keep an eye on our
investments,
but we don't need to be
logging in all of the time and
worrying about our
investments.
We can select great
investments upfront and
continue to invest in those
over time.
Going along with picking your
investments,
this is part number three.
We want to diversify our
investments.
We don't want to just pick one
company and invest all of our
money in that one company
because if that one company
goes bankrupt,
then we are going to lose our
money.
We want to diversify our
investments and we can keep
this very,
very simple.
We can invest in an index
fund,
which is one single fund,
but it has a whole bunch of
companies inside of that one
fund.
So it can make our
diversification very,
very easy.
And if you want to know which
fund I like,
I will leave a link to a video
sharing which fund that is.
You can check it out later on.
But we can also diversify not
only in the stock market but
with our other investments as
well.
For example,
I like investing in real
estate and the stock market,
so I am diversified that way
too,
but by staying diversified,
it really reduces our risk.
And like I just mentioned,
I do have a favorite fund,
and this is actually step
number four.
We can invest in low cost
index funds.
There are a ton of different
funds out there,
but we want to make sure that
we are investing in the low
cost index funds because these
are going to have the lowest
expense ratios.
The more that we can keep our
costs down when investing,
then the more money we can
keep and we can have that
money be compounding for us
over time.
And there are a number of
different index funds out
there.
There are different companies
that offer their own type of
index fund.
For example,
fidelity offers a total stock
market,
a total US stock market fund,
and then there's also funds
that follow the s and p 500.
And there's even funds that
track different sectors,
for example,
the healthcare or the
technology sector.
So we have plenty of options
with all of these different
index funds,
but it makes it nice because
it helps us diversify without
going in and buying a thousand
different individual
companies.
And I personally stay away
from actively managed mutual
funds,
they are going to have a
higher expense ratio tied to
them.
And there have been studies
done that have shown it's not
really worth it that that
actively managed mutual fund
is not outperforming these low
cost index funds.
Make sure and be aware of the
fees associated with your
investments.
And then the fifth item I want
to talk about on how to be a
better investor,
and I mentioned this before,
but it is to not time the
market but have time in the
market.
A lot of people try to time
the market,
they want to buy a stock when
it drops,
when the price drops and then
sell it immediately when the
price goes up.
But if they've bought that
stock at a low price,
but then the price goes even
lower and even lower and they
want to sell it,
they're not able to or they
can sell it,
but it will be at a loss.
So it's just really tricky to
time the market.
No one can really predict when
investments are going to go up
or when they are going to go
down.
A lot of people try to predict
that,
but it doesn't work.
And sometimes people get
lucky,
they might get right a few
times,
but they're not able to repeat
that process continually.
So if we can keep that
long-term perspective and have
time in the market,
we are going to be a lot
better investors.
And to give an example,
I have a friend that used to
be a day trader and he was
really excited about this for
a while.
He was making some good money
and then he had some losses,
made some more money,
had some more losses,
and then he had a really huge
loss and he got out of day
trading.
It was way too stressful for
him.
And I honestly asked him,
why did you get out if you
were making money?
And he said it was because of
the stress.
It's very stressful to watch
your investment portfolio drop
by thousands or even hundreds
of thousands of dollars at
once and not come back up.
And I would agree with him.
I do not want that stress of
having to make a quick win in
order to have money.
I would much rather take that
longer term approach and have
that time in the market,
which I know my investments
will grow over that long term.
And then the sixth item I want
to share with you on how to be
a better investor is to stay
disciplined,
stay consistent.
And this one is really key
because if we decide to invest
a little bit of money and then
we completely stop,
we are not going to have our
money be working for us as
much as we could if we
continue to stay disciplined
and continue to invest our
money.
And of course if we can
automate this process,
then we are going to be a lot
better off.
But we really need to realize
that we need to be investing
our money as much as possible
as soon as possible because we
want to take advantage of that
compound interest.
And the more we can invest
upfront,
the earlier we can invest,
then the more money we are
going to make.
And that's not because of our
own investments,
that's because of compound
interest.
Let's take a quick look at a
graph showing the effects of
compound interest.
We can see in this graph that
if we invested $50,000
to begin with and then we
contribute just $500 a month
over the period of 30 years at
an 8% growth rate,
at the end of that 30 years,
we are going to have
$1,291,966.
And if you look at this graph,
you can see that that blue
color is the amount we are
putting in,
and that green color is
compound interest that is way
higher than the blue color.
So you can see the effects of
investing as much as possible
as soon as possible so that
you can have as much compound
interest as possible.
And honestly,
I have applied these
principles in my own life and
that did help me to become
financially free in my
thirties and become a
millionaire at 40.
And if you want help investing
in the stock market,
then I have a free masterclass
for you.
I will leave a link below in
the description and you can
learn how you can work with me
to learn to invest in the
stock market.
And I want you to comment
below and tell me what has
helped you become a better
investor.
I am curious to know.
And if you found this video
helpful,
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Thanks so much for watching.
I'll see you in the next
video.