Haven't you always wanted to know how to invest your money to be wealthier and better positioned
financially in your next stage of life?
That's exactly what we're talking about today!
In this video, I'll show you my top 3 investments you should make now to grow your wealth and
be better financially prepared for your next 10 years and beyond.
At the end of the video I show you my personal investment approach with which I generate
12% and more return per year.
I will show you the basic building blocks of my approach and what you can learn from
it with 3 more investments you can start today to grow your wealth or to start investing
if you don't already!
But before we dive deeper, hello and welcome back to our channel!
We are the finance nerds and we help hardworking people like you to reach your financial goals
by sharing our knowledge in saving money, budgeting and investing to prepare you with
the right financial knowledge!
Our Mission is that you can reach your financial goals with ease and with that being said..
let’s start!
Do you know something like that?
Unfortunately, you see this too often nowadays and many people fall for it because they think
it's the next holy grail to increase their money in no time.
But to be honest, just think about it...
If investment legends like Warren Buffet, who is now again one of the 10 richest people
in the world in 2022 and has overtaken Mark Zuckerberg, has a top performance of 20% per
year and top funds in this world also make just 10% per year, then such providers should
be the next trillionaires or not?
By the way, it's about the long-term and sustainability of such returns and not about creating a huge
return once in 10 years and then making only losses for the next years.
And there it begins evenly also with such offerers.... even if they have brought in
such returns, what was the performance before and after?
I think it should be clear, if they really make such returns, that they would then hardly
reveal their investment strategy, but would open their own fund and overtake giant institutions
like Goldman Sachs within a very short time.
But what are realistic returns per year?
Average returns are between 5-10% per year.
With 12% per year you already beat the overall market over a longer period of time.
This may sound frustrating, because it is not the super high returns you would like
to have and of course you can't become a millionaire overnight.
But investing should also pursue a completely different goal in the first place... namely
to beat inflation.
December 2021 inflation in America peaked at 7% and average inflation for 2021 is forecast
to be 4.3%, which means your investments should be earning at least a 4.3% return to beat
annual inflation.
To make better investment decisions and to choose the investment strategy that suits
you, the so-called magic triangle will help you.
The magic triangle presents the 3 cornerstones of any investment: profitability, i.e. the
return, risk, i.e. how much you risk and liquidity, i.e. the availability.
With serious providers there are always only 2 goals possible to achieve, which means that
you can recognize unserious providers when they promise you all 3 goals.
As an example: With shares you can count on high returns and liquidity, but have an increased
risk.
The goal is to protect yourself from inflation in the long run, to get a good return, not
to lose money, to diversify and most importantly not to be afraid of losses.
These are still part of it and what counts in the end is the overall performance and
not, as I said at the beginning, a year that went great.
And now let's look at the 3 investments that are both serious, long-term and sustainable.
Investing in Dividend Shares The first investment you should consider are
stocks that pay dividends, so called dividend stocks.
Why?
Dividends are usually paid by economically strong, profitable and large companies.
So exactly the criteria on which it first depends to make a solid stock investment,
because we do not want to invest our money in companies that go bankrupt in the next
few weeks or months because then our money is usually gone.
In addition, the distribution of dividends provides a kind of passive income or can be
used to strengthen the compound interest effect.
By using the dividends received to buy more shares and thus the portfolio is increased
so you get more dividends which leads to the next time you can buy even more and this cycle
goes on and on.
With dividend shares, one achieves profits not only through price gains but also through
the dividends received, which for many can also be a psychological advantage, because
most companies continue to pay out dividends even if the price is currently falling, which
leads many to the fact that they remain invested and stay invested in the long term.
But beware, it does not make sense to invest blindly in the companies with the highest
dividend yield, because a dividend is a profit distribution that must be earned every year
by the company.
And how can you start investing in dividend stocks?
There are countless investment strategies for dividend stocks and there are 2 possibilities:
either you create a dividend portfolio yourself or you buy shares of an ETF that covers dividend
stocks.
The first one is more complex, because you have to evaluate all dividend paying stocks,
which are around 6.555, and filter out the ones that have the highest profitability.
To do this, you use 5 basic criteria: The current dividend yield, the dividend yield
of the last 10 years, payout of the last 3 years, continuity and the growth of the last
5 years.
These criteria are evaluated with the help of a score model and points.
If you like we can make a detailed video, just write "Dividend Investments" in the comments.
For the beginning we advise you to pick an ETF that covers dividend stocks, like for
example: "Vanguard FTSE All-World High Dividend Yield UCITS ETF Distributing",
Here you have the advantage that you invest diversified and above all time-saving.
REIT investing The next investment you should consider is
REITs.
REIT's are Real Estate Investments Trusts, a way to profit from real estate without having
to buy individual properties, because here you invest in companies that own income producing
real estate.
So basically Reits are nothing else than normal stocks only with the focus on real estate.
They are among the most stable dividend payers because their business model generates high
and reliable cash flows and there is comparatively little competitive pressure among real estate
companies.
Very good conditions for reliable and high dividends that flow into your pocket.
In addition, Reits offer a very good opportunity to minimize the overall risk of your portfolio,
because the real estate market correlates relatively little with other markets, which
means that you lower the overall risk of your portfolio.
How can you invest in Reits?
Relatively simple, because they are just ordinary shares and you can buy them at the broker
of your choice.
There is also the possibility to invest in REITs through an ETF, which covers several
REITS.
Open an IRA The next investment you should think about
is opening an IRA.
Why?
Firstly, to benefit from advantages such as the reduction of taxes on your income and
secondly, to further diversify your portfolio.
As I said in the beginning, diversification is one of the most important factors you should
consider in your portfolio to reduce risk.
The best way to reduce risk is through uncorrelated markets, which means that when the dollar
loses value, it increases the demand for commodities such as gold, which causes the value of gold
to rise and vice versa.
And if you now have a portfolio that focuses exclusively on companies from the energy sector,
you may have diversification through several companies but not from the entire market and
if the energy market collapses due to whatever, your entire portfolio collapses.
And now back to your IRA, you have the advantage of buying ETF's, mutual funds or individual
stocks in your IRA account and at the same time you have the tax advantage.
But what exactly do we do now to earn 12% and more per year as a return?
We actively trade currencies and indices in the short term.
But mainly we trade currency pairs, also known as Forex trading like EUR/USD and so on.
We are sure many of you have heard of it and many are very critical of it because there
are many rogue providers out there.
In Forex trading we use technical analysis to find the big institutions that move the
markets by manipulating the markets in some way first to then trade in their intended
direction.
We don't want to go into detail too much, because we want to give you something else
along the way.
You're probably wondering how we know that.
We have invested in ourselves and have gained this knowledge at a private asset management
company.
Our mentor used to be at a large institution and traded currencies for them.
Today he trades only privately and passes on his knowledge and we were one of the lucky
ones.
Through this knowledge we are able to generate 12% and more return per year for us and that's
what we want to give you on the way: Invest in yourself, because you yourself will always
bring the best return.
Invest in courses, books, mentors and training to expand yourself, your personality and your
skillset.
But to invest money, you need to save money first and for that watch this video -> (Timeless
Money Rules)
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We hope to see you in the next video.