hey guys I'm back and today I'm going to be doing a video on investing 101 if you're new here welcome I hope you'll stick around and hit that subscribe button if you are returning you know about a couple of videos ago I talked about money lessons from my twenties and quite a few of you asked for more details about investing I thought it was a great idea because I am again such a huge proponent of financial literacy and independence so anything I can do to kind of help you guys along those lines I am more than happy to do so I will say that I am NOT a financial advisor nor have I ever been but these are things that I just have learned over the years and you know hopefully some of this will be useful for you guys I have tips that you could apply to your own savings and investing also I want to say that everything I mentioned today will be us-centric because that is the market that I know and I'm familiar with but regardless of the market you're in the same principle and investment vehicles should be available to you you don't have to Google for your country what the equivalent is also you could always invest in the US market but that might be a little bit more complicated because you are dealing with foreign exchange and different currencies at that point so that perhaps is maybe investing criolla and not one or one but okay let's get into it first I will say that there is a huge difference between investing and saving and this is just kind of my interpretation and definition it's not the official definition binding means that to me saving is something that you do for the short term whereas investing is something that you do for the long term or maybe an indefinite term and what I mean by this is that savings is risk-free or pretty much close to risk-free where as investing is something that is very risky when you're saving maybe you know that you need to access some money in three months in a year in two years whatever the case is you're saving for a down payment you're saving for your vacation whatever that is you know you need to send that money and you can't afford to take a risk on an investment so maybe in those cases you would do a savings account trusting that your money will be there for you when you need it in the US banks are all FDIC insured so up until $100,000 I believe so basically there's no risk whatsoever by putting money into a savings account the downside is opinions account pays pretty much a zero percent interest these days the average I believe is 0.06 percent right now which means if you put $1,000 in a savings account today in a year from now that's only going to be worth a thousand and six dollars not very good and that is because of the Fed Funds rate which is what the Federal Reserve set so kind of all these interest rates that the bank uses are based off of the Fed Funds rate and you are probably familiar with new stories that talk about oh the Federal Reserve is going to raise break or lower rates or whatever and basically since the financial crisis that Fed Funds rate has been super low as a way to stimulate the economy because the idea is when the rate is so low people are going to want to spend that money rather than putting it into a bank account that pays six dollars a year on $1,000 so that's how why the Fed Funds rate and the savings interest rate is so low on the other hand you have investing which is risky and something that I would do if I needed money in an indefinite or longer period of time so I think the perfect way to illustrate this point is to look at the Dow some of you are quite familiar with this chart because I showed it in a previous video but what we are looking at is Industrial Average from 1990 until present day now the DJIA for the dow is a basket of stocks there are 30 stocks in this Industrial Average and they are quite diversified across different industries so they are a good barometer to more the market as a whole so if you look at the Dow basically in 1990 it was somewhere around the 2500 mark high today it's over 20 dozen in the ground quite a lot basically it means if you bought those 30 stocks in 1990 and didn't touch them today they would be worth over 20,000 so for investing the long-term the trend is upward but the risks are them for the short term so let's just zoom in on 2007 here the Dow and you know October 2007 was over 15,000 maybe you're thinking all to put my money in the stock market in it I need to you know put a down payment on a house in a couple of years but right now I could put it in the stock market well lo and behold two years later in March 2009 that has worked 6600 so from 14,000 to 6600 that is over 50% lost and the value of your investment and if you were patient and waited it out well by today you're back up in the black at over 20,000 so this is what I mean by investing it for a more indefinite period of time or a long period of time because you have the patience and ability to wait it out wait out the downsides and wait until it's back up because the long-term trend is quite clear the markets are growing up this makes sense also if you just think about the world of the whole population is growing the economies are growing so it makes sense the stock market as a whole will grow in tangent but at any given short period of time there can be fluctuations there can be crashes there can be severe Corrections that could really impact the value of your investment which is why and I just really undecided that investing is risky it is not guaranteed even with what I'm saying about the long-term being up and up and up you never know what can happen maybe there's a next recession I'm going to be thirty years long instead of you know five years long-term whatever the case may be whether or not you have the ability to wait it out is something that you need to figure out for yourself and not that is the end of all of my caveats about inventing okay so how have you invest well there are multiple ways to invest everything I'm talking about today and related to the stock market so I'm not going to go into like housing or anything like that but this for the stock market there are multiple ways to left you can apply an individual stock so maybe you're interested in Facebook and you want to buy an individual Facebook stock you can just sign up for a brokerage account there are so many of them some of them have really low cost trade some of them you would have free trade so whatever it is you sign up for a broken account you would put in some money into that brokerage account and then you can just set it up to buy you tomorrow buy one share of Facebook you pay the value for Facebook at that time and then you wait and see if it goes up or down and you know maybe your friend decide you want to sell it and hopefully by that time it's gone up but no guarantees so that is one way to invest the problem with the spying individual stocks is unless you are super well researched and you know very active out managing your account it is significantly more risky because it's not going to be a diversified maybe you all your stock is in Facebook that means all your stock is in this one company in this one sector and who knows what could happen to this one sector the government may decide that it needs to shut down Facebook and suddenly the stock that he purchased is now worth nothing because of something out of your control and that you could have no way of forecasting wait for events that kind of non diversified investing is to buy into fun so you can invest in mutual fund for that you have to pay a small fee and the mutual fund is managed by a fund manager who determines the investment strategy that they are going after mutual fund I think is actually something that is really a thing of the past few days there are better way to invest and if you just look at the research research has shown that over what the long run anything that basically tracks the index like the Dow Jones performs better than something that's managed by a fund manager and applying and into an index fund is something we can do for negligible cost in fact you can buy a share of an ETF and ETS is an exchange-traded fund Vanguard makes these ETS that are pretty much tracking the index to whether that's the Dow or the sp500 it basically tracks that market and you are able to buy a share of that ETF for a much smaller cost compared to buying say 30 individual stocks like better represented in the Dell because that is going to cost you a significant chunk of money whereas its share in an ETF is going to be a lot less so Vanguard is one company that has a lot of these and they are very well respected and you can just purchase those shares in the same way that you purchased a share of Facebook if you want a little bit more diversification and then I recommend going with a Robo advisor so these are relatively new in the u.s. the two popular ones are betterment and wealthfront and basically for these they are kind of like a mutual fund but instead of having kind of a huge team of financial professional figuring out the investment strategy they are done with algorithms and they have a very small team of financial professionals who and have determined the algorithmic strategies that aren't as active in managing the day-to-day the benefit of these Robo advisors is that you get more diversity I have a lot of my money in wealth front and my wealth front money is split up between different ETFs that track different indices and there's also a bit of it that's in kind of a real estate investment so a real estate REIT there's also some foreign stocks in there so there's way more diversity in the in the robo-advisor account on wealth for us and there would be I just bought an index of the Dow also with these Robo advisors it's great because they are constantly rebalancing my portfolio based on my preferences so when you first sign up for one of these you answer you know like a 20 question questionnaire which determines your risk profile and kind of your investment of gold whether that's retirement in 30 years or ten years or whatever it is you enter that all in and the algorithm determines how to allocate your money it's super at UVI don't ever think about it at all and the cost is relatively low so for a mutual fund you can be looking at paying like you 25% of the total cost you have in the fund every year or even more than that but with these roller advisors both well friend betterment charge 0.25 percent to manage your money and they do a great job I think I just trust the algorithm I guess well Fred you have to have a 500 dollar minimum deposit to open an account but then you can just set up your recurring withdrawals from your savings or attacking or whatever and every month similarly betterment you can do the same thing the betterment you don't have any minimum deposits so really for very little money you can already get started in invest and just see how it goes maybe you'll find that you are actually really passionate about it and you want to have more control and then instead of buying these Robo advised funds or a mutual fund or index fund or whatever maybe you actually want to go and buy those individual stocks for me I like to put my money into these Robo advisors because it's a little that I have to do and I also like to have a few things in individual stocks because I'm just interested in the companies or I'm really strong believer in their product but just comparatively I have a lot less than individual stocks than I do in my Robo advising account okay I think that's everything that I wanted to talk about I know that you probably have a lot more questions now than I gave answered so please feel free to leave a comment with questions down below or you know Google Google is your friend everything I know I learned by googling I didn't take a class on or anything like that so the internet is just an amazing place with so much information and I encourage you guys to you know start looking into investing and going whether that means something easy like well friend or something more advanced but it is something that I encourage you guys to at least be aware of and know this is an option and the differences between investing versus saving because you could really be missing out on a lot of money down the road if you just put everything into a savings account that gives you close to zero percent interest all right now it's up there for me today if you haven't yet go check out my money lessons for my 20 video because I can provide some more broad-based survice about budgeting fading whatever and whereas days that you have been really more specifically about just really basically to invest so I hope you found this helpful and I will see you next time okay guys don't forget to subscribe like


  1. Thank you for actually giving out proper investment content without the cheesy get rich quick salesman crap. And thank you for getting straight to the point. I swear, that's all I ever see on YouTube these days.

  2. Thanks for this video! Please, I have 2 questions:
    With these robo advisors, do you choose what to invest in or it's chosen for you?

    If you wanted to learn how to value a company in order to know how to strategically buy individual stocks, how would you do so? Also is this process more time consuming?

  3. Hi Joanna! This is a great video and I found it really helpful! I am very new to investing and have zero knowledge in it. I am 32 and have yet to start a retirement fund, eeekkkk, I know! I am unable to start a 401k with my employer because I am per diem, so I am left fending for myself. I was wondering if you could do a more simplified or I guess "dumbed down version" of this video where you take someone through signing up for a broker and how much money to start out with and so on… I signed up for Robinhood thinking I could just learn as I go…. nope. Turns out I need a little more guidance. It would be super helpful for visual learners if you could do some examples on your computer, but that's up to you. I guess I'm feeling confused about investing because I am not super familiar with the terminology… A lot of what you mentioned in your video sounded like a different language to me, haha. Also, it would be really helpful if you could point out what companies to invest in (High vs Low risk). Sorry for my super long comment and for being so needy haha. I would just really like to learn how to invest and profit from those investments.

  4. I disagree that saving is risk free. Have you thought of $value lost due to inflation, and the opportunity cost that same dollar be invested in something that can earn more money?

  5. Thanks for the informative video. One note about the FDIC, they would run out of money very fast in the event of any set of major banks failing but luckily the fed is there ready to tax the population (oops sorry I mean print money) to bail out the failing banks.

  6. Thanks for this video! I have a question. You said betterment has no money down for an account and wealthfront has a $500 minimum. Does Vanguard require money down for an account?

  7. Hi Joanna – Do you have a referral link? Since I'm learning about wealthfront through you, I don't mind using your link so you can benefit from it as I'm benefiting from the content in your videos. 🙂

  8. I'm a new subscriber and I learned so much from all the Q&As in the comment section! Love your contents and how helpful you are<3<3 merci beaucoup:)

  9. Hi! I have a question about the actual investing of the money, is it a one time investment & see what comes out of it or is it reoccurring payments every month or every year or something?

  10. With Betterment its required that you deposit a certain amount into the account with wealthfront you don't have to but there is 500 min. Deposit. It's actually better to do Vanguard if you have the initial money to put in.

  11. Very informative video!!! I just recently opened up a Robo-advisor fund with Betterment and I also have Robinhood since I'm interested in individual stocks in different sectors. I wish I would had known this in my early 20's about investing rather then just saving $ in the low-interest savings account. Thanks again for sharing your thoughts on this subject!! Take care!! You're gorgeous by the way 🙂

  12. thanks for making that video ,is very educating. .. I do feel you simplified it … u think will get me a free tester one and get a feel of this damn thing !!

  13. I began trading two months ago with the ambition to try and capture the equity of the entire market. After many deposits and swing trading (often sold too early), I now own securities in each of the eleven sectors; however, the portfolio I ended up with is simply too diversified and conservative for my taste.

    My question is, would it be ideal to sell off all and start over? I'm planning to put 50% into the Vanguard Total Stock Market (VTI), 20% in AAPL(capital growth), 20% in GS or WFC(high dividend), and 10% in speculative.

    Having owned 25 stocks and 12 at once, it is sometimes hard to keep up with new information. Been reluctant to sell some since I'm constantly hearing good things to come from them in the future.

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