The man, the myth, the legend Warren Buffett defines investing as “… the process of laying out money now to receive more money in the future.” Your goal with investing is to put your money to work today, in one or more types of assets, in the hopes of growing your money over time and receiving more money in the future.
- 1. Investing 101: Introduction
- 2. Investing 101: What is Investing Anyways?
- 3. Investing 101: Understanding Compound Interest
- 4. Investing 101: The Myths of Investing
- 5. Investing 101: Investing and Technology
What is Investing?
In the classic story of Joseph and the robe of many colours, If you’re not familiar with the story, later on in his life Pharaoh put Joseph in charge of all the grain in Egypt. For the first 7 years, the grain harvest was really bountiful, which was then followed by 7 really hard years of famine. Joseph knew to set aside grain in the good years, so that life would still be manageable in the lean years.
Investing is preparation. I would contend it’s preparation for the storms of life. I’ve experienced this in my own life, with recently going through three very long years of health issues and not being able to earn a paycheck, investing saved my butt in a big way, but more on that later.
So for example: Spending $5 today for a burger? Or spend $5 on an asset, so you can grow it to $25 in the future. What’s better than 1 burger? Mmm how ‘bout 5! Boom. Checkmate.
So What’s Step #1?
Your first step when it comes to investing is to save up some money to invest, over and above what you currently need to live on. This can be done through either spending less, or making more.
Spending less means living frugally. Watching your expenses and budgeting, taking that first step of responsibility when it comes to your finances. Spending less than you make.
Making more means just that, if you simply can’t reduce your expenses, you need to find a way to make more, to be able to use to invest. Delivering pizzas, walking dogs, washing cars, whatever it takes.
So What Do I Buy?
There are many different types of assets, or what are also known as “investment vehicles” that you can purchase, like stocks, bonds, mutual funds, real estate, or even your own business.
95% of what is offered by the financial system has massive conflict of interest and is designed to for you lose money, so that the financial industry makes money.
What I’m going to teach you is how to find good businesses to invest in, that are available to buy on the stock market. These are known as Stocks. All with little, to no conflict of interest.
That means you’ll be the one making money, not Wall Street.
Fun fact: In 2008 when most people lost 50% to 100% of their retirement savings in the stock market crash, Wall Street took in $100 Billion in fees.
Stocks are what great investors like Warren Buffett buy, and by using his principles, and the principles used by the greatest investors in history, we will be able achieve wonderful returns with very low risk.