How to invest for your ahead as a Beginner

Hey everyone, Elio here from Mondosol.com and in this video, I’m gonna talk to you a little bit about How to invest for your prospect for beginners.

Intro

In this How To Invest For Beginners guide you will understand How to get started, What’s the best way to get started and What advice do I have for people that are brand novel.

My exposure

Immediately to give you guys an concept, I got started investing when I was 16 years former and I’m instantly around 40 years previous today.

At the time I didn’t know anything about investing, but I was reading from the financial’s newspaper section.

I just learned some basics about investing and breakdown losing some of my and my parents currency. I realized that the financial field was not for me.

Challenge Yourself

I live my life as a challenge. So later along the line, when I was about 30, I started to peruse self-assist books and I understood that the most essential thing is to launch early.

The sooner you begin investing, the more it will benefit you later in life. This way, you can make the most of compounding, which Einstein referred to as the ninth wonder of the world.

Decide your investment goals.

I got into investing when I was only 16. It was super exciting and a little nerve-wracking, to be honest. I had about €2000 and used it to make my first investment in a mutual fund.

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Select your investment vehicle(s)

When it comes to choosing your investment vehicles, it’s essential to consider your financial goals, danger tolerance, and investment timeframe. There are various options available, each with its own potential benefits and drawbacks. Some common investment vehicles include stocks, bonds, mutual funds, exchange-traded funds (ETFs), real estate, and commodities.

So I started putting aside €2,000 and plan to constantly buy more shares of that fund on a monthly basis. It was actually the Bank of Mantova mutual fund in Italy

Stocks represent ownership in a company and have the potential for high returns, but they also come with a higher level of risk.

But I did remember a number of years ago, I did obtain several stock like Apple, Amazon, Shopify and I had a great return from that.

Bonds, on the other hand, are debt securities that provide regular interest income and return of principal at maturity.

Instead I think maybe when I was 18 years former, I lost €500 from that investment and later decided to market (It is bad when you market on loss). Later on my 40s I decided to acquire another mutual fund in Norway called Odin Eiendom (Real Estate Investment Trust). And invested in a few other different things, and then I just kind of stopped.

Mutual funds and ETFs offer diversification by pooling investors’ funds to invest in a portfolio of stocks, bonds, or other assets.

Trade To Close, Trade with the closers, trade with the best

Real estate

Real estate can be another option for investment, offering the potential for rental income and property appreciation.

At 31 years former, I started managing real estate properties. I think in 2017, I had 250 rental properties that I rent out on behalf of someone else and I make a little bit of income from that.

Read Also Investing into real estate – How old were you when you started?

Commodities

Commodities such as gold, silver, oil, and agricultural products can also serve as investment vehicles, providing opportunities for portfolio diversification. Additionally, there are alternative investment vehicles like hedge funds, private equity, and venture capital for more sophisticated investors.

Measure your uncertainty tolerance

In fact you can have a much higher threat tolerance because a mistake that you might make is not gonna be as costly as opposed to if you’re in your 30’s or 40’s, 50’s or 60’s. In conclusion you gotta be a little bit more cautious and conservative in your investment strategy.

Consider what kind of investor you want to be

It suggests the need for introspection regarding investment goals, uncertainty tolerance, and overall investment approach. This statement highlights the importance of reflecting on the type of investor one aspires to become.

Assemble your portfolio.

I did buy Facebook when it was Covid, a number of years ago, and I made some funds from that.eToro.

Read Also How do I track all my investments in one place?

And so, I literally, I remember buying like €1000 worth of shares of Facebook, Apple, Shopify and more so even though I did make some good returns percentage-wise.

Monitor and rebalance your portfolio over time.

But since then, to give you guys an concept, I’ve done very well with business, I’ve learned a lot more about investing.

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Otherwise my stock portfolio consists of blue chip stocks, index funds, a variety of different sectors, dividend payings tocks, some real estate investment trusts, bonds, a number of different investments.

I started from nothing to invest for the future

Also it can take time, of course. In fact it can definitely assist you if you’re just getting started. So I’m gonna send with you some just very basic principles that are really importantfor you to understand. I wanna give you guys an concept that I started from nothing, and I’ve been able to construct myself today, at 40 years outdated.

Pay yourself first

Right away, the first and most significant thing is to pay yourself first. This is the primary lesson in any investment or financial book, because you need cash to invest.

The most important financial decision of your life, which is that you’re gonna take a percentage of what you make, and I recommend 10% at minimum,

You’re gonna put it in a savings profile, or an investment login, or some other account that you’re not gonna touch.

Now, you might be saying, well I don’t have the currency to do this, I live month to month. Because you should never be in a position where you’re living month to month.

Cut down on your current living expenses.

Many people are living beyond their means, with expenses exceeding their income. It’s vital to be willing to give up some things to improve your financial situation.

When I came to this realization, I had to make a sacrifice.

• I had to to move back into my parents house,
• or I had to live with my friend on his couch for several months,
• or I had to eat at home and not eat out as much
• or not go out as much
• or take the bus and get rid of my car.

Emergency fund of savings

Additionally, it’s significant to have an emergency fund of savings. Most financial books recommend having at least three to six months of savings, which should cover your typical expenses.

Right away that you’ve done that, you’ll have more currency coming in, and you can start paying yourself and putting that funds into savings. Once you have the extra currency, you need to think about how to invest it. Take time to understand about the various investment options available.

Where do you get the currency from?

Here is an notion for you, why don’t you break down your company and market part of it while you keep the majority to stay in charge.

That’s what stock industry is for, and this process is known as Initial Public Offering (IPO)

But how much cash can you make?

Let’s take an instance of Mark Zuckerberg’s little toy – Facebook.

It went public in 2012 with 337 million shares at a price of 38 dollars a share.

Not bad, right?!

But, when he realized that, that there are so many more people who want a piece of his pie, he added another 84 million shares (421 million).

And guess what?

• He sold every single one of them.
• And raised 16 billion dollars.
• He literally became a billionaire in just a few hours.In fact, the stock price increased to 45 dollars within the first day of trading.

It seems like Facebook was doing great, but it was too early to celebrate because it feltback to 38 by the end of the day, and that was just the beginning.

The bad news was just starting.

Twice smaller than its original price.

When you obtain a stock, you essentially become a part owner of the enterprise and therefore have the right to a post of the company’s profits. In the past, people mainly bought stocks to receive dividends.

Congratulations, you have purchased 10 facebook stocks in January of 2017, and you are right away the owner of Facebook exactly like Mark, and I am not kidding. So, Your firm (Facebook) makes 15.934 Billion dollars

How much of that belongs to you?!

At the end of the day, you have spent 1300 dollars to acquire your 10 stocks (Facebook stock price in January 2017).

But let’s first take a look at how much stocks are there in total.

It turns out, that there are almost 3 billion of them (2.956 Billion).

I doubt that your 10 stock matters instantly.

Because, if we divide the net income on the numbers of shares, each stock should earn a little over 5 dollars (5.39= 15.934 Billion/ 2.956 Billion), by the way, that’s known as EPS (earnings per distribute).

In other words, your 10 stock suppose to earn you almost 54 dollars (53.9).

Not bad, right?

But that’s just hypothetically, in practice, you get absolutely nothing!

Their main objective is to make themselves richer and grow the enterprise, so your 10 stocks aren’t a big concern. But not everyone is dishonest like Mark Zuckerberg.

Does that mean, that the corporation was already valued at more than 3 trillion dollars?

Here’s the deal: there’s something called stock splits. Each stock was divided into 7 parts, and the prices went down accordingly (to 92.7 dollars). Basically, nothing really changed, but instantly more people can obtain the stock and become Apple investors, because the stock right away costs 92 dollars.

But not all companies do that, some prefer to only work with serious people such as Warren Buffett.

His company Berkshire Hathaway has never split their stocks, that’s why it only has 1.68 million shares, in comparison Apple has 5 billion (4.91 Billion).

That’s why a single buffett’s stock (Berkshire Hathaway) cost over 300K dollars.

I guess most of us will never join Buffets secret investors society.

That’s why he created class B shares which are more affordable (200 usd).

The topic of the stock niche never ends.

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