One of the most common pieces of financial advice you hear these days is
that you need to make your money work for you well there's a reason this
cliche advice is so often shared it's shared because it's true those who get
ahead financially understand that money is the tool meant to be used on route to
greater financial success unfortunately many people think you need a ton of
money to start investing but that's not true at all and i'll prove it to you by
sharing with you how to invest in 2022 with a little money i still remember the
first time i made money investing it was if i had just witnessed magic take place
in front of my eyes back when i first started investing i put a thousand
dollars which was a lot of money for me at the time into an oil and gas company
i had been advised to buy then after patiently waiting for a year which if
i'm being honest with just me forgetting i own the stock in the first place i
came back to check on my stock holding and i couldn't believe my eyes my stock
portfolio had gone from my initial one thousand dollar investment to eleven
hundred dollars the fact that i could make money without doing any work
especially as someone who's rather lazy to begin with blew my mind it was at
this point that i got hooked on investing and while not all my efforts
ended up as favorable as this one i learned two important lessons from this
experience first i learned that investing is a powerful means of
building well second i learned that it doesn't take a lot of money to get
started in fact i'm grateful i didn't start investing when i had a lot more
money to invest with because not only would i have been the youngest person on
earth to have a heart attack when i ended up losing tens of thousands of
dollars on a bad stock tip but i probably would have dissuaded myself
from ever investing again this is why if you ask me the best time to invest is
when you aren't flushed with money yet so that you can learn while the stakes
are small and increase your contributions over time now even after
sharing my first investing success story people still ask me if it's worth
investing and i always respond to this question by telling them that they
literally have no choice but to invest with the cost of something rising every
year at significantly higher rates than what the bank will offer you an interest
investing is the only way to stay ahead of the curve in fact if you think prices
are ridiculous right now make sure to smash that like button below because
it's the only free form of fun left in this world not to mention i believe you
owe it to yourself to deploy your money in the most optimal ways possible you
work hard for your money so the least your money can do for you is do the same
by building your wealth further on your behalf this is all to say that investing
your money is incredibly important but there are a few housekeeping activities
you must attend to before even thinking about investing before you invest even a
penny into assets that will grow your wealth over time you must first create
what i call your oh [ __ ] fund this is my name for an emergency fund because we
often hear ourselves saying these words oh [ __ ] when it comes to some sort of
bill or cost we need to attend to for instance when a furnace breaks those two
words will naturally come out of our mouths and there will be a hefty bill
that follows alternatively we may end up saying oh [ __ ] when our company notifies
of the layoffs taking place and having the money set aside to cover your
expenses until you're employed again is essential obviously this is just another
term for an emergency fund but hey it's nice to change it up once in a while
right in this fund i recommend you have at least six months of living expenses
saved up ideally you'll have a year's worth of cash on hand to maximize the
freedom this fund gives you but for those eager to start investing six
months of living expenses will do once your oh [ __ ] fund is set up you need to
ensure you're free of high interest debt if you have student loans credit card
bills or even a payday loan you need to address them before investing why is
that because generally speaking these debts have interest rates that are hard
to beat when investing therefore you'll actually get a better return by paying
them down than throwing your money into the market once these two financial
responsibilities are fully addressed guess what it's time to start investing
i'm going to go over now what i believe are some of the best investing options
to look into for those wanting to use the little money they have to start
getting ahead first let's start off with a rather simple set of assets called
index funded an x fund is a collection of investments that allow you to own a
bid of stock in a variety of different companies investing in index funds
offers you diversification and a certain degree of protection from poor stock
choices for example let's say you have a thousand dollars and you invested in a
company that your uncle couldn't stop talking about at your last family dinner
to you the company sounds promising but as soon as you buy stock and said
company the stock takes a massive dip due to the financial statements having
been massively misstated when this happens all that money you invested
could be gone in an instant and of course we don't want that to happen well
this is where index funds come into play instead of owning just a single stock
you could take that initial investment and invest it in something like the s p
500 which gives you ownership into shares like apple microsoft amazon
facebook visa disney and many more by doing so you're spreading a risk amongst
a host of different companies so if one company takes a dip your investing can
be held up by all the others that make up the index you've invested in now
people will try and convince you that you're better off investing in mutual
funds instead a mutual fund is very similar to an index fund except it's
controlled by an active money manager whose job it is to pick the stocks in
the fund essentially the purpose of a mutual fund is to try and beat the
returns that investing in the market as a whole would provide however in the
vast majority of cases you'd be much better off putting your money into a
simple index fund with lower fees that generally speaking will also give you
higher returns this is why index funds charge extremely low fees most smb index
funds charge less than 0.1 percent whereas mutual funds tend to charge
higher fees ranging from one to two percent of your account balance annually
this means that if you invested ten thousand dollars into a mutual fund then
200 will go straight into that fund manager's wallet every single year even
if you've lost you money alternatively if you had the same amount invested in
an s p 500 index the cost would be just 10 this is because index funds are
passively managed therefore there's no need to pay someone who as i just
mentioned is likely to perform worse than the computer managing that index
fund for you now as much as i love index funds and i think they should always
make up some form of your portfolio as you get older your investing strategy
should change over time the older you are the more bonds i recommend you
invest in and no i don't mean investing in more box sets of the james bond
series even though there are some pretty great movies by investing more into
bonds you offer yourself more stability in your portfolio which is important as
you creep closer to retirement another investment i'm fond of is real estate i
like real estate because it's an asset you can touch and feel however i know
what you're thinking is owning a property feasible with the little money
i have for those wanting to invest in real estate with a little money there
are really two options the first is to invest in reits or real estate
investment trusts these are portfolios of real estate that people can buy into
like mutual funds so investors pool their money and the fund buys more
property over time with you collecting profits along the way usually you can
start investing in reits with as little as 500 making it possible to get into
real estate with less money than you think alternatively you can start saving
what money you have to eventually acquire a property of your own however
in the meantime you can decide what kind of real estate investor you want to be
the first type is a capital gains investor this is someone who likes to
buy low and sell high and pocket the difference these are investors that are
interested in buying houses at auctions or seeking out great deals in their
neighborhoods when looking to turn a profit the second of a real estate
investor is a cash flow investor these individuals never buy property if the
rent won't cover the mortgage as such they follow the one percent rule meaning
that the property must generate one percent of its value in rent every month
in order to maximize the chances it will generate a positive cash flow now i
would be remiss if i didn't talk about individual stocks so let's go over those
right now out of all the different assets out there individual stocks are
what i get asked about the most and i understand why individual stocks are a
very attractive investment choice for a lot of people this is because you can
start with a small investment can realize great returns and sell whenever
you want unlike real estate where you have to look for a buyer and go through
all that whole selling process with the click of a button you have a complete
access to your funds while single stock investing is my preferred investing
approach if you're going to venture down this path make sure you understand what
you're investing in i see so many people investing in stocks based on advice from
their family and friends and these investments rarely pan out instead if
you're going to invest in single stocks you should take the time to make an
educated investment decision personally i use two methods of valuing stocks when
i do decide to invest this way the first form of evaluation i use is called
quantitative analysis something that might surprise you is when you google
the price of a stock the number you see isn't its real value it's more of an
estimate in many cases the value may actually be much higher to know when
this is the case i like to look at a company's quarterly earnings reports
which include things like balance sheets income and cash flow statements to get a
better feel for the value of the company now the second valuation method you can
use is qualitative analysis this isn't about the actual numbers but more about
the abstract qualities that make a company great a good example of this is
tesla there's no repeating the fact that tesla's financials do in part support
its rising share price but the company is so much more than the numbers behind
it for instance it's rare to have a company led by a visionary like elon
musk or to have such a raving set of fans as tesla does all these factors
should be considered when taking into account the future value of a company
you're thinking of investing in finally if you do decide to go down the route of
individual stocks make sure to create a diverse portfolio a mistake i often see
new investors make in particular is investing in one single company or
sector you've got to expand into different companies 20 or 30 to a
minimum is needed for proper diversification it's recommended that
you spread yourself across different industries like healthcare technology
consumer goods and the like this way you protect yourself from a company going
under an industry facing prolonged periods of hardship which happens more
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then once you begun investing as your income rises over time your main goal
should be to contribute more and scale up from there if done right you take
care of your assets in the beginning will have your assets taking care of you
later on and this can all be done starting with very little money in fact
if you invest in the right stocks you can literally make enough dividend
income to cover every last living expense you have how do you go about
doing this well in this next video i'll share with you five monthly dividend
stocks that will pay your bills and lead you to total financial freedom click
here and let's get started