Hi guys, it's Mark.
So today, I've got a family friend named Laura
coming round to help me film what she thinks
is a normal, how to invest for beginners video.
However, I'm going to be gifting our thousand dollars
as well as arming her with the knowledge she needs
to take the plunge as a complete beginner investor.
So she can start her journey to becoming rich
and financially free.
There's an old saying,
"Be the person you needed when you were younger."
And that got me thinking,
sometimes with investing, the hardest part
is just making a start.
So if you're thinking about investing,
but find the whole process a bit daunting
or have started and want to find out some more.
Then this is the video for you.
We're going to be going through everything,
step by step, from personal finances and taxes
to investment strategies,
and actually setting up the core account.
So make sure to watch to the end.
So you don't miss out on some great investment knowledge.
We'll get started as soon as you hit that like button
for the Altube Yougorithm.
So, Laura, what do you think when I say the word investing.
- I get a little bit scared, I know it's the way to go.
I'd love to learn a bit more about it
and put my money in the best place,
but if I'm honest, I don't really know much at all.
- Well, it's normal to be a little bit scared,
that's for sure.
Judging by our analytics, not many girls are into investIng.
What do you think that is?
- I'm not really sure why that is,
but I'd like to learn a bit about it
and show that it's possible for anyone to do
and use it as a way to get rich.
- Well, it's not all about getting rich.
It's more about building your longterm wealth,
but we'll get into that later.
- What? I was here to get rich.
- I'll tell you what I can do.
How about this?
I'm gonna give you $1000
to invest in anything you like.
- That sounds really, thank you.
Let's get going.
- I think we should, let's dive in.
People always say to me that they'll get good
at managing their finances when they earn more money,
but the truth is anyone can go broke, even celebrities.
You know, take Michael Jackson, for example,
he was the King of Pop with an estimated estate value
of over $236 million when he died,
but he left debts of over $400 million.
So Laura, how would you say your finances are at the moment?
- I'd say they're okay.
I don't look into them too much.
If I were to go out for a meal with my friends,
I'll spend the money,
but I do try to save about half of what I earn.
I just don't really tend to track it.
- Okay, well,
tracking is a really good idea
and it's really easy nowadays to track your money
using some of the apps that are available
and by tracking it you'll tend to spend less.
So that's always good.
But do you have any credit card debt or anything like that?
- I don't, I spend my money on my credit card,
but then I do pay it off every month.
- That's great.
You'll be watching the videos,
haven't you? - Yes.
- It's always best if you use your credit card
because that helped you build your credit score.
And if you pay off at the end of every month,
you're going to pay no interest whatsoever.
And it's a win-win.
- Oh, okay.
So why is building your credit score so important?
- Well, at some point in the future,
you're going to probably want to borrow,
be that for a house or for a business.
You never know what you want to borrow for.
And if you got a good credit score,
it's going to cost you a lot less in interest fees,
and you're going to find it easier to borrow
in the first place.
And that's why it's so important
to build a good credit score.
- Oh, okay.
- Taxes is something we should all care about
as at the end of the day,
why would you want to give away
more of your hard-earned money than you absolutely need to?
When it comes to invest in your most cases,
you are required to pay taxes on the profits that you make.
This is called capital gains tax
and this between 10 and 20%, depending on your income,
it's really important to minimize the tax you pay
in these areas.
So you're able to invest more for your future.
And there are two really simple ways
that you can take action.
Now, the first is to open up a tax-advantaged account
and the second is to start
some sort of side hustle or business.
So you can write off all your expenses.
- Why is a side hustle a good thing to have?
- Well, it's all about when you pay your tax.
If you get paid $100 for example,
from work and you want to go out for a nice meal,
well, it's all well and good,
but you've already paid your tax, haven't you.
So if that's 20%, $20 is already gone.
Now with a side hustle, you get your $100
and you want to go out for a meal.
So when you come to pay your tax,
you've got less money to pay your tax on.
So you get taxed less.
- Is that like bad?
- No, it's 100% allowed
because you're having a business dinner,
you're talking business
and that business needs to be done over a dinner.
So that is a allowed thing.
- Yeah, that sounds really good.
I have been thinking about doing side hustle
for a while now.
I think that's always something I wanted to do
in the back of my mind.
But I haven't actually got round to it.
It's just deciding what I want to do.
And thinking about a lot of things.
Like I love how seeing how people can do like
gym shark modeling on the side
and being a bit of an influencer.
That sounds amazing to me.
- It's extremely important to research any investment
before throwing all your money in.
So, Laura, have you heard of any before,
and is there anything you've invested in?
- I haven't invested in anything.
Obviously, I hear a lot about like cryptocurrency
and stocks and shares,
but it's sort of like a completely different world to me.
And I don't know anything about it.
But I know that my money
isn't very good sitting in my bank account.
I want to do something with it.
- Well, your money is sitting in your bank account
is actually losing you money
because you'll probably earning about
0.1% interest per year.
And that literally is nothing.
When we have inflation at more than that,
around about 2 to 3% a year,
that's actually losing value year on year.
- I think the thing that I was looking at doing
is buying a vitalette or something.
- Okay, well, we can discuss that
and run through the main investments,
which are good for beginners
in order of least to most risky.
So you can then decide what you want to do
with that thousand dollars I gave you.
- Oh wow, okay.
So the less risky risk is.
- Generally the less reward.
- Okay.
- But the higher risk.
- The faster the reward.
- Now an index fund, simply put,
is a basket of stocks.
So instead of buying hundreds of different stocks separately
and having to manage them all at once,
you could buy into a simple, low cost index fund.
- Do you get to choose what stocks they are.
- No, you don't get to choose what stocks they are,
but you can choose for a lot of different index funds.
- Oh okay.
And does it matter what country you invest in.
- Back when I was younger,
I might have gone for an index fund based in the UK,
but of course nowadays with the invention of the internet,
of course, these companies in America are absolutely global.
So they're always looking for more growth,
be it in China or Australia, wherever it happens to be.
So by investing in these American companies,
you've got a global player there haven't you.
And they're passively managed as well.
So there's not a manager there.
It's all done automatically.
That's why the costs are so low.
- If I invest all my money in like a risky one,
could I then lose it all?
And it sounds like a silly question, but could I lose more?
Could I go in debt or something?
- When you invest, your capital is always at risk.
You have to remember that,
but hopefully over the long-term it would be good.
Now unless you leverage your money,
you can't actually lose more than you invest.
So if you invested, for example, 100$ dollars,
the most you can lose is 100$.
However, if you leverage your money
and bought things on margin,
then of course you could lose more
than you actually invested.
- Okay, what does leveraging your money mean?
- Well, leveraging your money
is when you borrow money against your investment,
or it's also known as margin.
So for example, if you invested in a share,
so you wanted to buy 100$ worth of shares,
but they were offering you two and a half margin.
You could actually have another $250 to go with yours.
So you don't actually have any investment of $350.
Of course, then you could lose that whole $350.
Next is investing in yourself with a side hustle
or further education.
This is a low risk because the power is in your hands.
Starting a side hustle has limitless potential returns,
which is exactly what you want
when you're trying to build wealth.
So does this sound like an option to you?
- Yeah, it sounds really good to me.
I like the idea of investing in myself,
not just getting my nails done
and eyelashes done, obviously.
But doing things like university,
but it's kind of, you don't see the returns straight away.
- So how have you found that coming from university
into the workplace?
- So I feel like just with my degree, didn't get me a job.
You have to have other employability skills as well.
And a lot of places often want a lot of experience
and a lot of time in things that I haven't had time to do.
So I definitely see the value in investing in yourself
and enhancing your skills to make you more employable.
- You also thought about mentioned side hustles as well.
So of course you can invest into that.
- I do love and photography, a bit of videography.
I've already, that was my mom's friend had a wedding
and she didn't have a photographer.
So I hopped in last minute and managed to do that.
Do bit of video as well.
- And did you do that as a paid job.
- I did it for a bottle of gin.
- Oh! - So...
(both laughing)
- So you're cheap then.
That's what you're saying, aren't ya?
- I did it for free.
- Well, sometimes
that can be a really good investment as well.
When you do a job for free, you'll building up a portfolio.
And again, quite often you need to do three or four jobs
to build that portfolio up.
So when you do want to charge people,
you can show them exactly how good you are.
Next stop, we got individual stocks which are a medium risk.
An individual stock has invested into one specific company.
For example, Amazon would be considered an individual stock.
The returns can be higher as it brings more exposure
to one investment, but stocks can go either way.
So I only invest in individual stocks with high conviction.
- So I stuck with high conviction.
Does that mean that it's going to give you a big return
and that's why you invest in those ones?
- Well, what it means is that you've done your homework
on the individual stock.
You've looked into the fundamental analysis of the company
and you can see that it should give you a high return
over the longterm.
- So fundamental analysis,
that sounds a little bit complicated.
- Well, actually it's not complicated at all.
And you can find out all this information on Yahoo! Finance.
And you can pull up the company you're interested in
and look at their balance sheets and things like that,
and their profit and loss and where the company is going.
And also it's important to look
at the leadership of the company as well.
- Okay.
- Next, we come to real estate
and I'm putting this as high risk for beginners.
As real estate often requires a mortgage
which can mean taking on quite a substantial amount of debt.
However, real estate is a great way to accelerate wealth
and often performs really well during inflation.
- I've always looked at Airbnb.
And I'd love to do that kind of thing.
- If you're looking to do Airbnb,
you've really got to make sure that that property
can stand on its own without that platform.
Because if that platform was to go overnight,
you need that property to still be paying you money,
to pay your mortgage.
For me, buying a place to rent out
while you're still living with your parents
is almost a no brainer, isn't it?
Because it could bring you in a lot of money.
- That sounds really exciting.
Actually, every morning I wake up and I look and write
and even I think, "Oh, what can I get?"
- Now cryptocurrency and Bitcoin specifically
has been the best performing asset over the last decade.
- Is that why cryptocurrency is very popular?
- Cryptocurrency at the moment, it's very, very popular
because it's volatile and the returns potentially
could be right up there.
But likewise, it could be right down here as well.
So it's very exciting at the moment.
- Also very scary.
- It is scary.
I like to invest in what I now like to call
blue chip cryptos,
which are Bitcoin and Ethereum
and a bit of Cardano as well.
And I see those as being more stable
than some of the others.
- So it is good to keep track of which ones are doing well.
Or as you say it could go like through the roof
or rocket down,
do you know, how do you know which one is best?
- Well, the problem we're looking
at how well a coin is doing,
particularly if it's one that's just being
brought to the market,
it's that coin can be pumped and dumped.
And what I mean by that is you can get lots of influences,
lots of people around the globe that "Go, yeah,
this is the best coin to buy, buy, buy, buy."
And they're all in on it.
When it gets to a certain point,
they'll dump that coin and they'll make that profit
while your left, "Oh no, my coin is not worth anything."
- Why would someone actually buy a Bitcoin?
And I understand it goes up in value,
but what is it use for?
- Well, actually Bitcoin is like a store of value.
Once they're all mined, there'll be 21 million
as a maximum number of Bitcoins available.
- Mined?
- Yeah, yeah.
A lot of people think that.
Bitcoin miners are basically people that were rewarded
for maintaining the network.
And then you do that by using powerful computers
to solve all these complicated equations
and that's the reward they get.
- Okay.
- So now it's time to make your decision.
You've got a thousand dollars,
where are you going to invest it?
What are your thoughts?
- So what I'd like to do with it
is have an index fund and then have an individual stocks
and also crypto.
- That sounds like a solid start to your portfolio to me.
So let's get your account set up.
Now, if we were in the USA,
we could set that up with public.com
who are offering a free share
worth up to a thousand dollars at the moment.
But because we're in the UK,
we're going to do it by free trade.
And they're offering up to a 200 pound free stock
at the moment.
We'll leave the links in the description
if you're interested and you can pick those up.
Anyway, have you got your phone with you, Laura.
- I do. - Okay.
So I've worked out a thousand dollars is 730 pounds.
So I'm going to send that right through you now, bosh.
How do we want to split that up?
- So I was thinking 300 into the index fund
and 200 into Tesla.
- I have quite a lot into in Tesla, myself.
So in we go.
So we're going to go 200 pounds
on a buy order for Tesla.
All done.
So you going to work tomorrow and you can say,
"I own Tesla, how about that?"
- That sound really good.
(laughing)
- So let's get your index funds sorted.
So you wanted to go into the S&P 500,
which again, I'm a firm believer in as you know.
So let's go in and select that.
And we are there, there you go.
You've got an index fund set up.
All you need to decide now is
how much you want to fund that per month.
You don't have to fund it.
But if you do, that would be really good.
- Okay.
So now we have to set up Laura with a Coinbase account
so she can buy the cryptocurrency that she wants.
So again, we go to one of my videos
and we can press the link in the description,
because that way we get $10 worth of free Bitcoin.
There we go.
Welcome to Coinbase.
- Woo!
- All up and running.
- Ooh, it has a minus number.
- That's on the value of Bitcoin at the minute today.
So today it's gone down a little bit.
You'll have to get used to that
because if you're buying cryptocurrency,
the fluctuations are huge.
And some days you could have plus 10%,
and another day minus 10%,
you just never know where it's going to go.
So we put the order in for Ethereum.
We're going to go 230 pounds.
There you go. - Woo!
I can't wait to see it.
How it works out.
- You're part of the crypto mania craze.
If you'd like Laura to come back on the channel
and share her results,
then just let us know in the comments down below.
So I'm going to leave the next video right up there,
but don't click on it just yet.
Make sure to subscribe to the channel.
If you want to grow your wealth.
And don't forget to pick up your free stocks
and Bitcoin with the links below, okay?