Hey guys, it's sasha in this video i'm going to tell you how to make the most out of your investing career by climbing the investing ladder. If you are new to investing or maybe have only recently started by investing in the stock market or maybe crypto, you might find this pretty useful, i am going to explain how and why the optimal investing strategy changes over time and hopefully you'll pick up on a Few tips along the way, or at least find it useful as a point of view that maybe you didn't consider before now. One thing that i wanted to mention before i jump right in is that in this video i will not tell you how to earn 1. 000 per year - and i will also not tell you the secret to becoming a millionaire in three months.

So if that's, what you're after you'll need to go and find that somewhere else. But for those who do want to understand the long-term principles of investing make sure you stick around so first, let me share a few important rules. I am an aggressive value investor. I invest in assets where i see large potential for a big upside.

This means that i only invest my money in something where i feel the current price is significantly lower than what i feel a fair price for that asset should be based on the future value that i think that asset will give me and a lot of people. Don't have the same mindset, a lot of people are much more risk-averse and they don't feel comfortable investing their money in an asset that could theoretically fluctuate and lose half of its value tomorrow. For anyone who is risk-averse this investing ladder that i'm going to be talking about is not the right way to go up, as each step adds incremental levels of risk and management. That's because this investing ladder is designed for high long-term returns that are robust if you're risk-averse, you may prefer to invest in different asset classes, like government bonds and perhaps relatively stable commodities like gold or even keeping money in the bank instead of moving up this ladder.

But let's get started the first rung on my investing ladder is stocks for any investor. First, starting out stocks offer the easiest first step to building out an investing portfolio. There are plenty of investing apps out there they'll. Let you get started very quickly with just a few pounds of dollars.

I have links in the description for some investing apps that i personally use unlike, and some of them will even give you a free share. If you use my link to sign up so whether you live in uk, united states or other countries go and check it out, if you want to go and get started, and most of these new investing apps will let you invest in stocks with fractional shares. That means that you don't need to save up seven hundred dollars to go and buy a share of tesla. You can go and just buy ten dollars worth of.

However much you want. Instead, when you first start out with stocks, you will want to do as much learning as possible. Investing is a complicated mix of art and science and understanding how to make investing decisions takes time. It is not easy, and anyone who tells you that it is is just lying.

My top tip for anyone who is new to investing is to start with something relatively simple that will teach you the mechanics of investing something like the s. P. 500, that you can invest in through an etf vanguard, have vu in the us or vusa. In the uk there are a couple of pretty decent options.

The s p 500 is the index of the 500 largest companies in the united states, and that index tends to grow about 9 per year on average over the long term. Essentially, by investing in the s p 500 index you're investing a small proportion of money in each of those large companies that make up the index by the way, i am going to mention some specific funds and stocks in this video, so that i can show you Examples or explain things, but all of these are just here for education. I am not recommending that you do them, because i can't recommend them for you. I don't know your circumstances.

I am not a financial advisor and this is not financial advice. Now that we've got that out of the way, once you understand more about stocks, how to value them, how to set the right investing strategy, you may choose to go and invest directly into specific companies, and that is usually the next step. But a word of warning here: the vast majority of active investors, as many as 90 to 95 percent will end up not beating the market. So in most cases it is actually probably a good idea not to go and invest in direct companies and to stay invested in an index fund in the vast majority of cases that will actually yield better results.

But the truth is that a lot of us, including me, think that we are in that five percent who can beat the market so inevitably a lot of investors, regardless of what the right thing to do is will end up picking their stocks as they progress up. That investing ladder now before moving from investing in an index fund to picking stocks, i would strongly recommend asking yourself one question: do you know when you should sell the stock that you are buying? If you don't know the answer to that question or if you think that you will never sell the stock, no matter what or if you're, not sure how to decide when to sell, then i'd say that you're not ready for investing in individual stocks and it's actually Better to spend more time learning because knowing when to sell, is just as important, if not more important than knowing when you should buy now. Next up on my investing ladder is property. Property is a phenomenal asset class that brings three unique advantages.

Over stocks, property yields an active return on investment. People pay you rent to live in the property that you own, that rent is higher than most dividend stocks and will pay an average of about five percent per year on property. This does vary country to country region. To region city to city, but unlike dividend stocks property also grows in value.

This growth does vary depending on the time and place and over the last few years, if you're, based in the united states, canada uk, you might have seen property go up by a lot. More by as much as 10 per year or even greater levels of growth. Now, if you look at average data over time, property actually only tends to grow at about four and a half to five percent per year on average. So, together with the rental yield and after taking out the cost of maintenance and the property taxes, you will usually make about eight to nine percent per year from property investment now with stocks.

The best long-term strategy for investing is to regularly deposit money every single month when you get paid or, however frequently you choose to do so, to take advantage of the average rate of growth in the market. That's because if you try to time it and you put your money in at the wrong time, it might take you years and in some cases decades to actually break even. However, if you're constantly putting money week in week out or month in month out, the bottoms of the market will be times when you're putting the money in as well the tops and that will help you on average get that solid long-term rate of return. Because timing, the market is never a good idea, especially if you're trying to start out in market for the very first time now the reason property is higher up the ladder than stocks is because you'll need more money to get into property.

Now, i'm not talking about reits or some kind of weird funds that let you invest in property, i'm talking about real property investment and i'm going to explain why that's better than those other options in a second you'll need. Cash for the deposit. You'll need cash for the legal fees, you need cash for the taxes and all the other incidentals, like maybe fitting it out, etc. The reason people diversify into property as they move up the investing ladder is because it is a different class.

It is a different asset type and therefore has somewhat of a different return trajectory from the stock market. It behaves fundamentally differently, and that gives you a hedge. It is true that sometimes market crashes and then the stock market and housing markets overlap and they both crash at the same time, as does everything else. That does happen, but the two are still fundamentally different.

The way they crash is different, the rebounds are different and the short-term fluctuations are also different. Property also has the advantage of paying you rent when the house prices are going up and when the house prices are going down and they beat your property - is that land will always be a highly valuable asset. Now many of the biggest companies from 100 years ago, don't even exist anymore, but land and property, including land on which those companies was based, is still here and it is still owned by someone, and it is still of value. It is something that will always have a level of demand and a level of value property requires more hands-on management.

You have to work out contracts with tenants. You have to deal with taxes, you have to fix things when they break and do it quickly. It's a lot of hassle, but, unlike stocks, properties are very much a long-term set and forget type of asset because of the cost because of the fees and the taxes, you really won't want to be changing your property investments. You won't be selling one and then immediately buying another, because you think the margin might be slightly higher, so in that case, in that sense you don't won't really need to do any regular assessments or do any kind of trading, and that is actually an advantage now, After investors build a portfolio of stocks and property, the next common option to take as you moving up the ladder are instruments and instruments are really not for beginner investors.

They carry entirely different types and levels of risk and instruments require a really detailed, in-depth understanding of stock markets of other markets, of and of investing in general instruments are basically financial contracts that derive their value from some other underlying asset. The most common type of instrument that you might have heard of or know things about is a derivative. These are contracts that are based on the movement in price of stocks, commodity or some other assets. You might have heard of cfds because some of these investing platforms that i mentioned that i have in the description below offer these cfds alongside basic shares, now see if these are a type of a derivative, it's literally a contract for difference.

The price of the underlying asset moves and that contract agrees what you think that difference will be, and if the movement is in your favor and you get to earn money and if it is not, then you lose now. Derivatives have the capacity to accelerate their returns on assets through leverage that leverage is usually done on money. You will basically borrow money that you will then invest in a contract, and the plan is that the return on your investment will be higher than the cost of borrowing that money in the first place. Time can also be used as leverage and many people.

Don't really appreciate that fact: some instruments allow you to buy or sell stocks at certain points in the future and if the stock price moves between now and that point at a greater level than what the contract agrees, then you are essentially using time as a form Of leverage to give you that upper hand in being able to get more of that stock or get a better price because of the contract you've struck. That is what all that options trading is about. Now, let me repeat the point i made earlier in case that bit, i just said made no sense to you whatsoever. Investing in instruments is not for beginner investors, it is very risky, it is very difficult.

It requires a certain level of knowledge. It is very easy to lose your money completely if you don't really know what you're doing so, while instruments can be powerful ways of taking your investing to the next level in some cases uh when you get to the right level on the ladder. Unfortunately, you do need to wait until you get to that run before you. Try now, after you've climbed all the way up this ladder, the next rung up is investing directly in businesses.

This sounds very similar to buying stocks at the bottom of the ladder, but it is a whole different ball game and it is far more difficult, far more complicated and far more high risk than watching dragon's den investing in companies directly as an angel investor. Being part of an early stage, funding round or as a rescue package in some cases can yield insane levels of return. If you invest in the right company at the right time, the returns of investment can be seriously life-changing. You probably heard of the different stories of people who are investing in some very early stage.

Tech startups like facebook, for example, but investing in business is also the most difficult out of all of these different options. The majority of these investments will not work out and not work out, like you're not going to get as high a level of return. Many of these will lose all of your money in the process completely gone. It takes a lot of time.

A lot of effort, a lot of thought, a lot of work to find the right, investing opportunities to do the due diligence to put in all of that effort. It will then take a long time before you actually see any results, many years and in some cases decades before those businesses actually take off before you have any chance of being able to capitalize on your investment, and obviously, businesses need a lot of cash. This is a game that you can only play when you have a big balance in your account. Now investing is a game that constantly changes over time as your portfolio grows.

You will want to diversify to make use of hedging ensuring that no matter what happens, your money sits in fundamentally different asset classes that behave differently when the going gets. Tough. As the amount of money that you have grows, new opportunities will open up. New levels will unlock that are not available when you first starting out and, as you learn more about investing and understand the fundamentals better, you may be able to take advantage of opportunities that others will pass or maybe not even c.

If you found this video useful, i would really really appreciate you hitting the thumbs up below. It will really help this video reach more people. Thank you so much for watching. I really really appreciate it and, as always i'll see you guys later, you.

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