how to start investing for beginners

Intro to Investing

Rob Wilson@robwilsontv

What You’ll Learn in This Video• What investing is and what it isn’t

• Why you need to invest

• How to set your expectations

• The most common mistakes (and how to avoid them)

• How to get started NOW

Ground Rules• This is not an exhaustive list of every investment strategy ever

created

• Not investment recommendations

• You will lose money at one point or another

• Not some “Magic Formula” that will tell you when to buy and sell

Ground Rules

Ground Rules

• This is not an exhaustive list of every investment strategy ever created

• Not investment recommendations

• You will “lose” money at one point or another

• Not some “Magic Formula” that will tell you when to buy and sell

Why You Need to Invest

• You are now responsible for your own retirement

• Pensions are becoming extinct

Why You Need to Invest• You are now responsible for your own retirement

• Pensions are becoming extinct

• Shift to 401k put you in charge

• Of course you need to earn more money

• Multiply your efforts many times over

Give Yourself Options• Investing is not all about retirement

• Dramatically alter the course and quality of your life

• Quick story: How I got started

• Dot com Boom

Lost Money

Learned Lessons

Apple Inc.

2005 2014

$36.90

$536.09

Turned $3,700 into $53,000

1350% Return

Give Yourself Options• Won’t retire off of that one trade

• But it provides options

• Start a business? Go back to school?

• Buy a house? Go on vacation?

• More control over your life when you are good with your money

Where Should Your Money Be?

Where Should Your Money Be?

Most Common Mistakes• Procrastination

– No money

– No time

– Don’t realize that Time IS Money

Time Is Money• I can give you $1000 each minute for the next 35 minutes

• I can give you $.01 doubled each minute for the next 35 minutes

-OR-

What Would You Choose?

Time Is Money• $1000/minute x 35 minutes = $35,000

• .01 doubled each minute for 35 minutes =

$171,798,691.84

The Power of Compound Interest!

Most Common Mistakes• Procrastination

• Investing too safely

Dealing with Risk• Rule of 72

– Divide 72 by the annual rate of return to determine how long it will take for your money to double

– i.e. 72/10 = 7.2 years (stock market)

– 72/1 = 72 years (savings account)

• You need to take some risk and give time to work

Time is Your Biggest Risk Reducer

McDonald’s – 6 Month Chart

McDonald’s – 5 Year Chart

What Does This Mean For You?

Retire on Your Terms• Someone 15 years from retirement

who expects 10% return per year on his investments has to contribute $2400 per month to reach 1 million

• A college graduate with 45 years to save at the same interest rate only has to save $95 per month (at 10% return per year) to reach 1 million

What Would You

Rather Do?

Moral of the Story• You need to be invested

• You are responsible for your financial future

• Time is Money

• Time helps you deal with risk

• Don’t invest in things you know nothing about

Action Item• Start with what you know

• Review the top 20 places where you spend your money

• Create a list of 10 public companies that you do business with.

• We’ll use this list in the lessons that follow.

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@robwilsontv