You might be surprised to learn that I'm not the youngest YouTuber around. I've experienced a lot in my life and am richer for it. If I could start investing from scratch again, I would proceed a little bit differently. So, when you're my age, if you can complete all five of these processes, you'll be much ahead of me.
Adjust your risk tolerance
In retrospect, I recognized that I might not have taken as many chances when I was younger as I could have. In actuality, you often have more time than money when you are in your 20s. This indicates that whatever risks you take are less risky than those who have families and mortgages. The moment to expand your empire is now. Therefore, being afraid to take chances is the most harmful thing of all since it means you won't reach your full potential.
Of course, you should do every effort to tip the scales in your favor. If you want to become wealthy, you won't be able to completely avoid danger. Every chance will still carry some risk because nothing worthwhile ever arrives without effort.
People are considerably more inclined to allow a small amount of doubt to creep into their minds and convince them not to accomplish anything when things are difficult. Numerous acquaintances of mine have made the promise to quit their jobs and launch a business, but they never follow through because they don't want to jeopardize their steady income.
I weigh the opportunity cost of not taking the risk against the possible risk when deciding whether or not to make an investment. When you select one choice over another, you forfeit something called an opportunity cost.
You can use your resources more wisely if you give this some thought. I won't claim that I always choose well, but on the whole, I've been successful when I've utilized this strategy, and I also never want to let the thought of what might have been consume me.
Therefore, taking calculated risks with your money and using that time to increase your wealth faster than everyone else is the ideal method for you to increase it.
Put it in your back pocket
Automation pushes you to prioritize your investments because the money is taken before you can spend it, hence I should have automated my investing much sooner. This is when you make arrangements to have a set sum of money deducted from your paycheck or bank account each month and invested according to a specified plan.
A excellent illustration of this is investing $100 in an S&P 500 index fund. As a result, your money will grow over time without you ever having to give it much thought. It's a really simple procedure. Decide which account to save from and how much money you wish to save.
Then, find an automatic investment option on an investment app and select your investment strategy. The paperwork will be handled by them. When you approve the final figure, the automated magic starts working.
According to my observations, the bulk of investors who lose money waste their time attempting to choose the correct stock at the appropriate time. And if you've been following my channel for a while, you already know that timing the market is difficult.
For me, investing is all about long-term capital growth. By following the performance of an index, ETFs let you rapidly and in a single transaction participate in the whole market. The S&P 500, which represents the 500 largest American corporations, the entire stock market, or even individual industries like tech are all options for investing.
As their entire focus is on long-term ETF investing, Invest Engine is a witch recommended supplier and a platform that really connects with me. Because no one likes the tax man, they provide ISAs, which are effectively fortified investing accounts that protect you from taxes.
You can only deposit 20,000 pounds annually in ISA accounts, but any earnings you earn can be withdrawn fully tax-free. Therefore, I unquestionably advise opening an ISA account with them and safeguarding your returns.
You can receive a £25 welcome bonus at Invest Engine today if you sign up using my link and invest your first £100, giving you a 25% return on your investment right away. You can even set it and forget it with their auto-invest tool, which automatically invests any new money into the ETFs of your choice. We appreciate Invest Engine's sponsorship of this part of the video.
Refuse to Be Tempted
Given that the insane cryptocurrency investments of a few years ago were comparable to penny stocks in my day, I can understand why people were drawn to them. Many individuals start investing in items without completely understanding them during a craze like this because they fear missing out on a great chance if they don't.
This must be among the riskiest things you could possibly do, and it's likely the biggest financial error I see people commit. I can talk from experience. When I was younger, I made a few profitable purchases in penny stocks, but if I had kept going in that direction, I would have lost everything.
To be more precise, I had the chance to invest alongside a few of my millionaire friends in a sizable group. They appeared to turn everything they touched into gold. They have stakes in big banks, retail, and the fashion industry worldwide, but I am unable to go into depth here.
I was perplexed as to how they were achieving such incredible annual returns of over 25%. I declined the chance because it sounded too wonderful to be true.
A year after making a $50,000 investment, I would have lost almost $300,000 because they were multiplying every investment by six, which caused the entire business to go out of business.
Though I would have previously assumed that the amount I had spent would have been the most I could have lost, it's a valuable lesson to learn. My gut, in my opinion, is the best instrument I possess. Usually, you can sense whether something seems right. Generally speaking, I can. But I also like to supplement this with some further research.
Debt is another temptation that must be resisted at all costs. In my earlier years, I made a financial mistake that cost me the equivalent of $20,000, which cost me years of potential wealth accumulation. Payday loans are the ones you should particularly watch out for.
Payday loan providers are like vultures. They realize that individuals use Instagram to keep up with the lives of their friends, and they relentlessly promote to them on Facebook, on billboards, and in newspapers, taking advantage of their fears and promising them instant money.
One loan could send you down a path of several months of debt, which is extremely difficult to get out of and can completely derail your investment journey.
Learn a High-Income Skill
When I initially began investing, I believed that all I had to do was save aside money every month, keep working my regular job, and eventually become wealthy. But I soon understood that I didn't want to wait until I was old to start reaping the rewards of my investments; I wanted to become wealthy now, while I was still young. For this reason, it's crucial to acquire a high-paying expertise that can be used as a successful side business.
Teaching people how to fly radio control helicopters was one of my side businesses. I learned a skill that few people could master, therefore I charged others to teach it to others. I was able to readily invest the money I made because it was more than I required to cover my regular costs.
A side hustle is a really fantastic approach to add additional source of money, which is something you absolutely must do. Now that you have a backup source of income in case your primary employment is lost, you can invest it gradually and avoid getting into severe debt.
When times are tough, it may seem impossible to establish a side business, but if you look long and hard enough, there are online enterprises that are thriving, such as affiliate marketing and selling digital products.
Here's a thought. Take a look at your daily tasks at work. Can you make this your side business? What you choose to do is irrelevant. You can find a method to make it into a side business as anything from an electrician to a forklift driver.
Make Lifestyle Investments
When you start from nothing, it can be very difficult to spend money on yourself since you are aware of how difficult it was to get that money. I've always attempted to conserve money rather than spend a little bit more on a superior experience or product, so I'm just now getting over this.
My son Curtis, who has developed a multimillion dollar business but still spends a lot on travel and enhancing his lifestyle, is aware of how difficult it is to make money. He recently outfitted his home gym, frequently takes first class flights, and even purchased a brand-new posh standing workstation with a treadmill.
I would have considered that an excessive expense a few years ago, but I now believe it's critical for you to upgrade your lifestyle as you begin to earn more money. Allow me to take you back to my days as an apprentice carpenter.
All of our hand tools had to be purchased by us, and they were very expensive. However, I was able to purchase my tools for less at a later stage in the market. I thought it was fantastic. A chisel is a chisel, and a hammer is a hammer.
What possibly might be the difference? And they were more affordable than half off. I purchased a number of these tools and brought them back to my job. But to my surprise, the hammer shaft quickly bent. The screwdrivers could only be used to open paint cans; the chisels lost their sharpness after about a minute.
The result was that I wasted all that money and still needed to go out and get the high-quality tools that I should have purchased in the first place. I still use those tools today. Therefore, if you don't invest enough money in high-quality goods, it can wind up costing you more in the long run.
Living a better life alters you as a person, and you become more at ease mingling with wealthy individuals since you don't feel like a fraud. Spending less, of course, is a good idea in some circumstances, such as not overspending on takeout or comparison shopping for groceries.
However, attempting to save money everywhere you might actually lead you into a bit of a financial trap. Check out the following video to learn about the nine side businesses that are now most underutilized. But before you do, be sure to subscribe if you want to increase your fortune. I'll meet you there then, all right.