- Investing for beginners.
What are some of the most profitable investments
that you can make?
I get asked this question a lot so today,
on the way, we're actually going to a dealership
to pick up a new car for my executive director,
my right hand man, Desmond Soon.
You might have seen him on Facebook,
so today he's going to pick up a new car, his SQ5.
So I want you to join with me
and kind of come along for the ride.
(upbeat music)
Now, to answer your question,
what are some of the most profitable investments
that you can make?
Now, people ask me that question
usually because they don't know what to invest in,
there's so much noise in the marketplace, right?
People are talking about Bitcoin,
I call that butt-coin, cryptocurrency,
or is it the stock market, is it mutual fund,
is it index fund, is it real estate,
is it gold, oil, like what do you invest in?
First of all, before we talk about
the different types of investments out there,
let me just share with you that
the type of investment that rich people invest in
versus the poor and the middle class,
are very, very different, very, very different.
When you are, in your income,
when you make a certain amount of money,
when you become a trade investor and a credit investor,
when you make a certain level of income,
there, the investment world opens up to you.
They have many more choices and many more vehicles.
Now sometimes, people might say that's very risky,
a lot of investments you have never even heard of,
that suddenly, now you can invest in.
So, when it comes to investments,
before you choose what type of investments
you want to invest in,
you first have to determine what kind of investor you are.
It is like, it's like you're asking me,
"What kind of car should I buy?"
Well, it depends.
Is it used for leisure?
Are you using it for business?
Are you using it to drive your family around?
If that's the case, maybe SUV makes sense.
If it's for, like you like to drive a fast car,
maybe a sport car, that makes sense,
like a Porsche or a you know,
a Ferrari, Lamborghini, whatever it is,
little bit more risky, cost more money.
Or are you the type of investor that your age,
are you between 30 to 40 years old?
Are you between 40 to 50?
Because it also depends, as you get older,
that you might want investments
that more protect the capital.
When you are younger,
you can go a little bit more aggressive,
and say I want growth, right?
Growth versus security.
That also makes a difference.
So, all that take into consideration,
that's why I don't like the question where,
"Okay, Dan, what should I invest in?"
Or "What do you invest in?"
Well, what makes sense for me might not make sense for you.
You may not be there yet,
or the capital that you have,
you may not be ready for that type of investment,
or what I like, okay, I like SUV,
doesn't mean you should drive SUV.
I like a sport car,
doesn't mean you should drive a sport car.
Even within sport cars, there's so many different brands.
I like certain type of color or certain type of engine,
I like certain type of interior,
does that makes sense?
So it all depends.
It all actually depends.
The problem is,
people ask that type of question,
they're looking for an easy answer
because most of the time,
you haven't done your due diligence,
you haven't done your research.
You don't know what you should do.
You don't know what you're interested in.
So anything that sounds good,
someone on Facebook talking about cryptocurrency,
"Oh, that sounds good, I should do that."
Your friend gives you a hot tip on the stock,
let's jump into that, right?
It's like you don't have a clarity as an investor.
So first, you gotta know what type of investor you are.
Are you more for growth?
Are you more for capital gain?
Are you more for security, you want dividends?
All of that makes a difference.
So, I don't like stocks personally,
so I'm not a stock guy, I'm a real estate guy,
but some people, my friends,
they do very well for stocks, good for them.
It's not something I like,
I don't have control over it,
I don't like the fact that I put in the money,
I can't call the CEO and say,
"Hey, I don't like the way you're
spending this kind of expense."
I can't control that.
But for most people, that's good,
I like control when it comes to investing.
I like control in terms of the finance,
I like control in terms of decision, I like businesses,
I put money in businesses, because I have a say.
I can dictate,
I can have some form of control
of where the business could go.
I like real estate 'cause I have control over tax,
I have control over the cash flow,
I have control over the appreciation,
a lot of different things.
I can look at these things.
It's slower, it is more stable,
it's always up to, there's so many other factors.
The second thing you got to consider is
are you a capital gain investor
or are you a cash flow investor?
So I'm a cash flow investor.
Capital gain investor, meaning that you buy something,
you are expecting,
you buy something at a certain amount and it goes up,
there's an appreciation,
you are making money on the upside in the spread.
That's perfectly fine.
So that's a capital gain investor.
Cash flow investor, on the other hand,
we invest in something, we are looking for that
consistent cash flow that it'll produce for us.
I'm a cash flow investor.
So I don't look at something and then buy something
and invest in something hopefully, okay,
I buy it in X, hopefully in six months,
a year, two years, five years, it'll go up to Y,
and I sell that, that's good,
but that's to me, speculation.
Nobody can predict,
nobody can be sure and guarantee
that's going to be the upside.
So I like cash flow investing where I invest in something,
I know the cash flow,
let's say, ten percent return, okay cool.
Ten percent, I know every year,
I'm getting ten percent return back,
so if it's ten percent, no changes,
it'll take me ten years to get all my money back.
However, if there are things that I could do,
in terms of the investment, where I could add value to it,
such as a piece of real estate where you buy,
you fix it up, you add value, put a better tenant,
because a commercial real estate,
that can increase the value of the property, of the asset,
that makes sense to me.
So that's just my personal preference.
Again, this is just me,
doesn't mean that's what you should do either.
So capital gain versus cash flow investing.
Third thing and the most important thing is,
depends on where the stage you are at,
I think, and this is just my opinion,
if you are making less than $250,000 a year,
income-wise,
the best investment that you can make is in yourself.
Invest in upgrading your skills,
invest in upgrading your knowledge,
your skillset so your earning ability is improved.
Your earning ability is improved.
So let's say you are a consultant,
you are making $250,000 a year,
yeah, you can invest in this and that,
but to me, you need to make more money
so you have more extra cash to invest.
So let's say you're making $250,000 a year,
and you take program.
You learn how to be able to run a workshop,
so now you can serve more people,
not just working with client on one-on-one,
but you can work in small groups.
And you take that workshop,
it costs you $10,000, and you learn that,
and now you can offer a workshop,
and from the workshop, you make $50,000 hypothetically.
So that $10,000 investment that you invest in yourself,
now produces a return of $50,000.
Now, that's a 500% return.
Now my question to you is
where can you get that kind of return?
In any investments, you cannot.
So when in doubt, when your income is not there,
instead of trying to throw money at something where,
"hopefully I'll get rich through that,"
or whatever it is, and you jump on the bandwagon,
and why not invest in yourself,
upgrading your skills
because that $10,000 you invest, you made $50,000.
That's okay because that skill stays with you.
You can do that over again and again and again
and you can make money for the rest of your life.
You can't go wrong when you invest in yourself.
So when it comes to investing in my own education,
like going to workshop, attending programs,
hiring people, hiring consultants,
learning from advisors, I'm never, never cheap.
I'm very generous,
I'm willing to invest in that, and I always invest.
And you keep investing,
and that's the difference.
So the most profitable investment
I believe that you can make at any age,
invest in yourself.
Once you have done that your income has increased,
then invest in your business,
invest in your marketing,
acquire those customers.
If you spend, on Facebook, if I spend,
every dollar I spend if I get three dollars
and five dollars back into a customer,
every dollar I put in
I make two, three, five dollars back,
again, that's hundred percent of return.
You cannot get that from an investment,
from a passive investment,
but you could get that from your business,
stuff that you can control.
So I think you should get to that point
where you are making yourself a lot of money,
let's say, 250, six-figure.
Your business is making you a lot of money,
so pays for your overhead, your expense,
plus you have extra cash flow, extra profit,
now you take that money,
now you invest in some type of investment.
That's what I believe in.
So there you go,
may not be the answer you're looking for,
but really do your research.
Only invest in something you understand.
Don't let greed control you, don't let greed take over.
Don't feel like you're missing out,
you're not missing out on anything
'cause there's always another deal,
there's always another investment.
So plenty of opportunities.
Invest in something you understand,
invest in yourself, you can't go wrong with that.
- Oh wow
- Wow
- Holy smokes (laughing)
Holy smokes, this is like a space facility.
Like NASA or something.
- And here is your new car
- Thank you, thank you (laughing)
- Here's the key
- Thank you very much
you're kidding, holy shit.
- You work hard,
that's for Desmond who's been with me
almost three years now, right?
- Yes - My right hand guy
he's been through a lot,
and one of the dreams he told me was
to get a new car for your dad
- My dad
- And he's worked very, very hard,
and this, he deserves this, truly deserved it.
- Thank you
(laughing)
- I love it, I love it, it's white, and the red brakes.
- Oh
- Oh look at the light, this is awesome
Oh, god.
Oh, wow
wow (laughing)
Yes!
This is very sexy, it's very sporty, very sexy.
Thank you so much, man, thank you very much.
When Dan makes a promise, he keeps it, thank you very much.
(starting car engine)
Yeah, listen to that engine.
(laughing)
- One of the first things I want to do,
like this weekend I'm going to stay at my parents' house.
And I'll let him go for a drive.
- That's nice, very nice
- Touch it, feel it, smell it
(chill music)