Investing For Beginners – How I Make $17K per Week from Stocks

When my uncle invested some of his money in the stock market, my dad said it was an extremely risky move. Unfortunately, what my dad didn’t realize is that he was also playing a risky game. Can you see where this story’s going? Every year my father’s money was losing value due to inflation. This is just what happens over time, as more money is printed, the money in circulation becomes less valuable. This meant he was never able to quit his job in the factory.

The thought of my money being eaten away by inflation scared me so much that I’ve made sure to invest throughout my life. As a result, not only have I beaten inflation, but my investments actually now grow by around $17,000 a week on their own, which over my lifetime has made me millions.

I’m no financial advisor, but I am someone that’s been there and done it. That’s why I’m making this video—it’s exactly what I wish I had when I was younger.

To make money, we first need to beat the inflation issue. In the last 60 years, this averages out to a rate of 3.8% per year. So if your money isn’t growing by more than this on its own, then you’re getting poorer by the second. In a perfect world, you would have a savings account that provides an average return of 8 to 10% every year so that you can both beat inflation and earn some profit. Unfortunately, such savings accounts don’t exist. However, you can achieve returns like this by investing in the stock market.

A stock is a small part of a company, and when you buy it, you become a shareholder. And when you’re a shareholder, there are two ways you can make money:

• Firstly, if the price of the stock goes up during the time you own it, you can sell it for more than you paid.
• Secondly, you can receive dividends. Dividends are regular payments to shareholders. Not all stocks pay dividends, but if they do, this means that you can receive money without ever selling your stock.

The magic really starts to happen when you own a bunch of stocks that grow at an average of 10% per year, because the interest applied becomes larger and larger. This is called compound interest, and I have to admit, a guilty pleasure of mine is messing around with online compound interest calculators.

Let’s do one now. If you were able to invest $250 per month at an 8% annual return, in 42 years, you’d be a millionaire. And if you continued to do this for another 10 years, you would actually have over $2 million in your account. Of course, if you wanted to invest even more, then that would just speed up the process. This is all based on historical average data and isn’t guaranteed, but it certainly been my experience.

So, as you can see, the real secret ingredient to this millionaire formula is time, which brings me onto, “When should I start investing?”

The short answer to this is as soon as possible. The younger you start, the better, as you’re giving your investments more time to grow and compound. This also means you can take more risk, as your investments have time to recover if a stock market crash happens. And it will happen, it always happens.

But life isn’t as easy as this, as there are often things in the way preventing you from investing. So here’s how I would structure things:

• First, you need to make sure you have paid off all high-interest debt like credit cards. Just think about it, there’s no point trying to make 10% in the stock market if you’re paying 15% to a credit card company.
• Secondly, build up an emergency fund. This should be enough to cover three to six months of your living expenses. This way, you’re not forced to sell your stocks in the event of an emergency, which can really ruin your progress.

Once you’ve done both of these things, you’re ready to start investing. If you’re younger than 18, then it would be a great idea to ask a parent to open up a custodial account, which allows them to invest for you. This will give you such an advantage in the future.

Your next question is probably something along the lines of, “How much should I invest?”

When you ask an investor, they’ll probably say, “as much as possible”. However, I have a different opinion. I made most of my money through starting different businesses and only used the stock market to grow my wealth over time. I’ve also had a pretty fun life, from flying full-size airplanes and racing cars, to competing for my country and traveling the world. If I’d invested all of that money into the stock market, then I’d have missed out on so much. So my answer would be to invest whatever you feel comfortable with.

But if you want a more solid answer, then the 70-20-10 rule is a pretty good guide. It states that you should split your money by these percentages: 70% on living expenses, 20% on investments, and 10% on the fun stuff. Research shows that people who invest at this level are much better equipped to ride the ups and downs of life and also get ahead of everyone else.

That’s all well and good, but how do I buy a stock?

There are various different apps out there that allow you to invest in stocks. I’ll leave some links below. The key is to open the correct type of account. You’ll often hear people throwing around the terms Roth IRA in the USA and Stocks and Shares ISA in the UK, TFSA in Canada, and Supers in Australia. If you don’t have one of these accounts, then you’ll be missing out, as they allow you to avoid paying taxes on your investments, but they do have limits because they’re so powerful.

A great thing about these investment apps is they actually give you the ability to buy fractional shares. So, rather than buying a share of Apple for $190, you can invest as little as $1. This is great if you just starting out or want to dollar cost average in.

One of my favorite investing platforms is Trading 212, as they do both of these things. Since I was planning to talk about their app anyway, I reached out to see if they’d be interested in sponsoring this portion of the video. They agreed and are also offering a free stock worth up to £100 to anyone that uses the code TILBURY when they create an account.

One of the really cool things about Trading 212 is they let you practice investing with fake money. So, if you’re a little uncomfortable with investing or just want to try some strategies before putting your own money on the line, this is a great way to get started. Another great feature is called Pies, where you can see how other investors have allocated their money into different stocks.

If you live in the UK or Europe, it’s worth trying out Trading 212 because signing up is completely free and there are no commissions. Of course, don’t forget to use the code TILBURY and you’ll receive a free share worth up to £100, or alternatively, click the link in the description to sign up and see exactly how to access the free share.

Now the obvious next question is, “How do I pick the best stocks?”

There are two main ways to attempt to predict the stock market. These are called technical and fundamental analysis. A good way to think about this is like a scale. Usually, short-term day traders are purely focused on the technical aspects. This includes looking at charts and patterns. They believe they can predict how the stock will change in price by judging the highs and the lows on the graphs.

As a long-term investor, my strategy is about keeping it simple. I’m a lot more focused on the fundamentals of a company. This includes the financials, the leadership, and the brand recognition, as I believe this is where the true information lies to indicate the long-term success of a stock. When I invest in a stock, I don’t have an intention of selling it for at least two to five years. However, like I mentioned, it’s a scale, so I do look at the occasional chart in order to find the best time to buy. This approach has helped me find some really good investments over the years, rather than just dipping in and out trying to make a profit every day.

But with the majority of my investments, I don’t actually do any of this. That’s because I allocate most of my money to index funds. This is definitely the best strategy for most people.

An index fund is a way for the average person to make more money than the professionals with very little effort. This is almost exactly the same as an index. You could go and buy stocks in some of them individually. However, if something bad happens to those companies that you’ve picked, then you can wave goodbye to your money.

The idea of an index fund is to be a little bit sneaky, as it allows you to invest in every single company on the list with just one click. Even if a few companies do terribly, then it’s balanced out by all the companies doing extremely well. The average annual return of the S&P 500 over the last 10 years has been 13.6%. Although this is slightly higher than the average over time.

No one has ever lost any money if they’ve bought and held an S&P 500 index fund for more than 20 years. The truth is that the average actively managed fund returned 2% less per year than the market in general. This means that the professionals on average are doing worse than index funds, and even if they end up losing you money, they still charge you high fees, no matter what.

The reason that index funds can charge really low fees is because they’re passively managed. Which means they look after themselves and don’t need an expert to keep adjusting them, meaning the fees can be as low as 0.02% per year.

When I tell people about index funds, it often blows their minds. However, when they go onto an investing app, they get confused at the different options and ask, “What’s the best index fund to invest in?”

Well, as I said, I’m not a financial advisor, but I have had a lot of success with three different types of index funds:

• Number one tracks the S&P 500 index. The historical return of 8 to 10% has allowed me to generate a fortune over the years. This is due to the power of compound interest.
• The S&P 500 tracks 11 different industries/sectors, and no sector is more than 30% of the index.
• However, it is worth pointing out that it’s a bit tech-heavy these days, with five tech stocks dominating 23% of the entire fund.
• It’s up to you if you see this as a positive or a negative. I personally don’t mind as I believe in the future of technology.
• The best I found in the USA is the VFAIX Index Fund or the VOO ETF. The best in the UK would probably be the VUSA ETF.
• The only real difference between an index fund and an ETF is that the ETF can be purchased or sold at any time throughout the day, just like a stock. Index funds can only be purchased in full. An ETF, on the other hand, can be purchased in fractional shares, which means you don’t have to buy a full share and instead, you can invest whatever amount you like. This is great if you’re just starting out or want to dollar-cost average in.

• Number two is a total stock market index. The Total Stock Market Index has returned investors an average of 13% each year over the last 10 years, which isn’t bad at all.
• It’s the definition of diversification. You can’t really get any more skin in the game for a lower cost.
• If you want to invest for a long period of time without having to even check or even think about it, then this is most likely the fund for you.
• Investing in everything means you can experience gains across the entire market.
• The best I found in the USA is the VTSAX Index Fund and the VTI ETF. And the best in the UK is the VWRL ETF.

• Number three is the Emerging Markets Index. Emerging markets are predicted by some experts to be on the rise.
• It’s always well and good buying the S&P 500, but when China or another emerging country has some great gains, you’ll end up missing out.
• Emerging markets funds are definitely the most risky type of index funds we’ve discussed. These funds include stocks from lots of different growing markets.
• Taking a look at a list of the largest economies in the world, a lot of them are emerging markets.
• The best I found in the USA is the VEEIX ETF. And in the UK, the VFEM ETF.

Now I know at some point I need to address the biggest question around investing, which is, of course, is investing risky? It really depends on how you define risk. You may be scared that you’ll lose money. However, you also face this risk by not investing, as my father Mervyn found out.

A great way to make sure you’re protected in the event of a market crash is to mix in a few bonds within your stock portfolio. These are just a different type of investment that are far more stable than stocks. In your 20s and 30s, I wouldn’t worry too much about them, but as you move closer to retirement, it’s a good idea to have more bonds than stocks. In my opinion, in your younger years, the biggest risk you can take is not taking enough risk.

Now for the question on everyone’s mind: When should I sell my stocks? Knowing when to sell stocks or hold onto them mostly depends on your age. If you’re older, you’ve likely been investing for a while and can live off them during retirement by gradually selling when needed. However, if you’re younger, this usually isn’t the case. In fact, if you’re in your 20s to 30s, there are only three good reasons to sell your investments:

1. You need money for an emergency.
2. You made a bad investment. If you have individual stocks that appear to be underperforming consistently, it may be time to cut your losses.
3. You’ve achieved a specific goal. If you’re investing for short or medium-term goals like, I don’t know, saving up for a dream vacation, then it would be a great idea to set a target price.

The most important thing to remember is to not sell your stocks for as long as possible so they have the longest time to grow. Just invest and forget about it until you want to stop investing and take your profits. This thinking will also help you avoid panic selling.