I want you to imagine for a moment that you started investing in 1985. For a couple of years, your money keeps going up and up until… Black Monday. They’re calling it the Monday Massacre. Wall Street had its biggest one-day drop in history. The decline’s results have affected millions of people to date. Your friends probably thought you were some genius, but now they’re urging you to sell. But you ignore them and slowly but surely the market recovers until… The Nasdaq index is in free fall, down nearly 10%. Driven by technology in general… Your friends are on their knees begging you to pull your money out, saying things like ‘It’s time to take…
your profits before you lose everything.’ But you hold strong, and things start going back up until you’re hit with. It was one of the most profound events in generations with huge consequences. Little did you know. You’re in for the ride of a lifetime until… The global economy will contract by 3% this year. The worst downturn since the Great Depression. Surely this is the end of the stock market. But as things reopened, the market soared 27% from its low, setting new records. What a comeback. Didn’t mention that the guy who invested his money in 1985 was actually me when I turned 18. The average return over this time period was 7. 23% per year. If I had only invested $250 per month during this time, I would have made $1 million.
$1,000,000. $841,521. 08. That’s a return of over 6,000%. But between us, I invested a lot more than that. So now you understand the power of investing, it’s time to jump into the details. Honestly, it’s amazing how many people talk about investing. but don’t actually show you how to do it. So I’m gonna quickly walk you through how to invest in stocks on your phone. Of course, remember, I’m not a financial advisor. This is just the way I do it. Before you do any of this, make sure you have an emergency fund of three to five months of living expenses. The first thing on our list is to set up an account.
A lot of people get stuck at this stage because there are many different investment platforms and account types. But trust me, it’s much simpler than it first seems. Now you can do it all online. When I first started investing, I had to phone up the stockbroker every time I wanted to buy a stock. Let’s use the Trading212 app. I’m going to use my son’s account, since my account is pretty messy due to a bunch of free shares. He’s actually been running an experiment on here for the last three months, but we’ll talk about that in a bit. The account you open should be a tax-advantaged one. This means you won’t have to pay any unnecessary taxes.
These are known as stocks and shares ISAs in the UK and as Roth IRAs in the US. Raised in America. I think the UK option’s much better as you can invest up to £20,000 per year without paying capital gains tax on your profits. And you can take out your money whenever you want. In contrast, Americans have to wait until they’re old and retired, and they have a much lower limit of $6,500 per year. Feel free to use whatever app you like. This is just one of my personal favorites. Next, we need to deposit some money to start investing. Most apps make it pretty easy to deposit money. We have to click the three lines, then select ‘deposit funds’.
As you can see, this brings up a screen with lots of options, like ‘instant bank transfer’, ‘bank transfer’, ‘debit card’, and the one we’re gonna use, ‘Apple Pay’. Let’s just put in 400 so we can invest in some stocks together. Feel free to invest whatever you’re comfortable with. Curtis, I’m gonna need your face for the phone. All right, hang on. This next step is super important. Getting some free stocks since I was planning to talk about Trading 212 anyway, I reached out to them to see if they would be interested in sponsoring this portion of the video. They agree, and they’re offering a free stock worth up to £100 to anyone who uses the code Tilbury when they create an account.
Plus, you can get more free shares by inviting your friends. will get a free share as long as they fund their account. So don’t waste your invites and invite brokies. And also, don’t worry if you’ve already opened an account within the last 10 days. You can still… use the promo code Tilbury in the app and receive your free share. Right, now we need to plan a winning strategy. The first thing we need to remember is that investments go up and down, so it’s very hard to pick winning individual stocks. That’s why I prefer to invest in all of them. You probably think this sounds a bit crazy, but stay with me. I love listening to music. Into music. I’m a big Deacon Blue and Queen fan myself.
But whatever you like, if you’ve ever listened to the radio or used Spotify, you’ll be familiar with the music charts. The better the songs perform in sales and downloads, the higher up they go in the charts. On the other hand, if a song loses popularity and sales, it drops out of the charts. This is the same as investing in an index fund. All you have to do is replace the songs with company names. Let’s take the S&P 500, for example. This is a list of around 500 of the largest public companies in the USA. The big dogs are Amazon, Google, Apple, and Tesla. And just like the music charts, if a company doesn’t perform well, it risks being removed from the list.
Here’s the cool part about an index fund: with just one click, you’re not just investing in one or two companies, but in every single company on the list. So if one doesn’t perform very well, your money’s okay as you’ll spread across all of them. So how can we put this into practice? Well, we need to automate our long-term investments. Remember, I said my son had been running a little experiment on his account for the last three months? Well, he’s been investing 5 pounds in the S&P 500 every day. Why five pounds? Because that’s about the average price of a Starbucks coffee. Automating your investments like this is a great idea, as it means set it and forget it. His portfolio is doing well.
As you can see in the green, his return so far is 36 pounds and 46 pence, which is a return of 5. 03%, not bad for a little experiment. If you want me to keep you updated with this when it reaches the six-month mark, let me know in the comments. Like this, all you have to do is select pies and then press the plus icon. Now you can select whatever stocks you want to include in your pie. For this demonstration, let’s keep it easy. And pick this S&P 500 index fund. By the way, look out for whether it says ‘accumulation’ or ‘distribution’ in the brackets. I always go with accumulation, as it automatically reinvests your dividends back into the stock. The less I have to think about, the better.
Now let’s tap ‘Add to Pie’ and then the arrow button. If there were more—one stock in here—then we’d be able to change the percentages with this slider. Right tap next, then auto-invest this value. Projection is really awesome as it shows you how much money you could make based on historical averages. Of course, when you invest, you can get back less than you invested as investments can rise and fall, but it’s still a great way to get an idea of how much you could make based on data-backed projections. I mean, say we invested 250 pounds a month for 31 years. You’ll only have invested 94,000 of your own money, and your portfolio would be 1.14 million. If we expand this to 40 years, your portfolio would be $3.
56 million. It’s worth having a play around with this, as it’s quite motivating to see how much money you can make with a relatively small amount. Per month, and to all the people in the comments saying, ‘Well, what about inflation?’ It will make your money worth far less as long as you’re investing rather than just keeping it in a bank account. Then inflation is not something you need to be extremely worried about. Additionally, I increased my investments to keep pace with inflation. Now. Let’s pick some individual stocks. Although I wouldn’t recommend that beginners bother with picking stocks, I know many of you are gonna try anyway, especially since you’ve seen people make millions from the right meme stock that skyrocketed like GameStop.
All right, so there are basically two ways to take a stab at figuring out what’s going on in the stock market. Technical and fundamental analysis. Those quick deal day traders are all about the technical stuff, pouring over price charts and patterns, thinking they’ve got the scoop on how the stock’s going to swing just by eyeballing the ups and downs. Now, I’m more of a long-term player. I dig into the nitty-gritty of a company’s fundamentals. You know, the financials, who’s steering the ship, and how well— and the brand is. I reckon that’s where the real lowdown on predicting a stock’s long-term success lies. So I sift through income statements, balance sheets, and cash flow statements when I invest in a stock.
I’m in it for the long haul, at least two to five years minimum, to find stocks. Click the magnifying glass icon (two) to make it incredibly easy to find stocks by providing lists such as big tech, popular ETFs, banks, and most owned. There’s also a lot more. Take a look when you find a bit of time. You can even go to the social feed tab to see different pies other users have created, and copy them for yourself with a single click. So you don’t have to find the stocks yourself. On the stock page, you can see the price graph, and by scrolling down, you can actually access all those important financial documents I discussed earlier. Now let’s buy a stock, Tesla will do.
Now this pulls up a page with a couple of different options. The first one is a market order. A market order is like going to the supermarket and paying whatever the price tag says. A limit order, on the other hand, is like going to a boot fair and haggling for the best price you want. You can enter a price you’re willing to pay, and if the price ever reaches that level, the app will purchase the stock for you. As a beginner, that’s all you really need to know. There’s no point diving into the other options. Let’s buy 400 pounds worth of Tesla so I can show you how it’s done. The final step is to press send by order. And boom, we’re now part owners of Tesla.
So now you know all the steps, and you’ve got a free stock with the link in the description. What’s holding you back? Sounds great, Mark, but isn’t investing a bit risky? Well, take a look at this. If you invested a single amount every month from the age of 25, you would be about here after about 30 years. Now, if you waited 10 years, this is the difference it will make to your growth. Somewhere around here. Look at the difference. It’s absolutely wild. So start young. If you have a diversified portfolio of index funds and keep investing at a gradual rate every year, even if there’s a stock market crash, historical data shows you should be able to endure the storm just like I did. If you want to know why net worth goes crazy after 100K, check out the next video, but don’t click it just yet. Make sure to subscribe if you want to grow your wealth, okay. I’ll see you over there.
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