The 5 Best Investments For LIFE!

Hey guys, and welcome back to the channel! So today, I wanted to share my opinion on what I believe to be the five best investments you can make in your whole life. Now, some of you may have already noticed this, and yes, I do want to give a huge shout out to my good friend Nate O'Brien. He recently made a video on five investments he's holding for life, which got me thinking, what would be the five best investments in life for most people?

But yes, full acknowledgment, Nate's video is definitely the source of inspiration for this video. So with that said, I want to share my ideas as to the top five, the best investments for most people, and my reasoning behind each one. So let's get started.

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This video is sponsored by Stake. Download the Stake app today and use the referral code AWC to get a free stock when you fund your account. Details in the description.

So what would be the five most relevant, the five best investments in life for anybody? Well, I think the single best investment would be a home to live in. Shocking, right? The guy that talks about the stock market all day. But there are some very good reasons why it's very smart to invest in your own home. The first is obvious, right? Everybody needs somewhere to live. You buy a house, and there you go; you've got your home base. But that's also the reason why I think it's a great investment, because everybody needs somewhere to live. This is a big advantage for residential property as an asset class.

Yes, like any market, it has its ups and it has its downs, but at the end of the day, there is always demand. People don't need to own 10 Facebook shares, but they do need a place to sleep. Here's another advantage: it also forces you to be a long-term investor. If you think about it, if you buy a home for you to live in, are you going to move to a new place every 12 months? Of course not. That would be a ridiculous amount of effort, and it would be very costly too, considering moving costs and stamp duty on the new place, closing costs on the old place. So chances are you're going to live there for at least, you know, five to ten years. For some people, you might never move; you might stay there.

So it gets you to hold the asset for a reasonable time, which leads me to my third point. The biggest reason why it's a great investment for life is because residential property has had a really solid long-term performance record. If you look at the median house prices, as a general rule, if you hold a property for an extended period of time, you will be able to sell it for more than you paid, even considering all those closing costs. Plus, if you're in Australia, you don't pay capital gains tax on your own home, which really makes it an exciting investment.

So for most people, that's why I think buying your own home is probably the best investment you can make for life. It's investing without actually seeming like, you know, you're investing. And these reasons even prompted Peter Lynch, world-famous investor, to say in his book "One Up on Wall Street" that before you go chucking your savings into the stock market, buy a house first.

So in my opinion, I think a home to live in is the single best investment the average member of society can make. Um, I'd love to hear what you guys think. So, you know, if you agree or disagree, just let me know in the comments. I want to get a wide range of opinions on this, so let me know. But moving on then, the second best investment for life, in my opinion, is investing in skills and knowledge. Now, I know, I know this one sounds cheesy, so I want to really explain this one. I do not want this to be a video that's just like, "the best investment you can make is in yourself." I hate those videos.

But here's the thing: you know, most people, they don't buy stocks. Most people don't buy investment properties. Most people don't run their own business. Most people, they have jobs. They work for 40 years to be able to afford a retirement; that's the reality. Now, one thing I've learned is that many people, unfortunately, they stop learning once they're done with school. They're done with university; they get the qualification they want, they get the job, and then they're comfortable.

You know, if you're a motivated person, this plays right into your hands. Spend the time, and if necessary, spend the money to get really good at what you do, and it will pay serious dividends. Essentially, what you're trying to do is be the most desirable employee possible. Think about this: you know, you and a colleague get into, I don't know, marketing. Your colleague just did the marketing degree, and you know, he keeps up with the recommended professional development hours, but that's about it.

You know, in his spare time, he just plays Call of Duty. You, on the other hand, you continue to read books. You continue to do courses and learn the ins and outs of social media advertising interfaces. You invest in people skills like negotiation and effective communication. You invest your time and your money into improving your skill set. Now, imagine: bang, a new job comes up—head of marketing. It's a $120k job offering. Who's gonna win it? You are!

Of course, you're going to crush the interview with your people skills. You're going to have an in-depth understanding of how to advertise in various ways. You might even be able to show the interviewer the return their business could get on their advertising budget if you were at the helm. You're a better candidate; you can prove it, and you will get that position. In this situation, you have a competitive advantage, and over the years, being the more desirable candidate is going to lead you to many opportunities and also more money.

If you work for, say, 30 years on an $80k salary, it's going to be $2.4 million dollars. However, 30 years on a $100,000 salary—that's $3 million bucks! So, there's a $600,000 difference. I mean, that's a house. So in my opinion, yes, one of the best investments for life is investing in yourself. It's not a cheesy thing; it's legit. But you also have to be motivated to get ahead of the pack.

Now, of course, I can't recommend how to improve your own skill set in your own industry, but two resources that I would highly recommend to improve your negotiation and communication skills are "How to Win Friends and Influence People" by Dale Carnegie for communication skills, and then "Never Split the Difference" by Chris Voss for negotiating skills.

So in my opinion, that is the second best investment you can make for life. Then coming in at number three, I would say coming in third is probably a market-tracking ETF. So these are stocks that represent diversification across the whole market, or at least a very large portion of it. For example, the biggest ETF in the world is SPY, and that is the State Street Global Advisors S&P 500 ETF.

So owning those shares means really you own a small slice of each of the 500 largest companies in America. Now, why do I think this is a smart investment for most people? Well, it's because it's one of those investments where you get into the market, you don't have to think too much. You can hold it for 40 years and chances are you'll still make a very healthy return. The S&P 500 has gone up about eight percent annually since adopting 500 stocks into the index.

Here in Australia, the market has been able to produce an average annual return upward of 10% per year for the past 100 years. And with this approach, you don't need to be a genius; you don't need to buy into individual companies. All you have to do is be a stock market participant. In fact, the less time you spend looking at your investments, the better. As a passive investor, ignorance is your superpower.

Over 40 years, you can literally just keep investing in the one thing and trust in the market over the long run. You know, at seven percent per annum, a once-off $5,000 investment turns into $75,000 over 40 years. What if you did $5,000 per year? You'd end up putting in $200k over the 40 years, but that portfolio would be worth $1 million dollars by your retirement. So it's an interesting concept, particularly if you're an everyday Joe.

And that leads me to number four. After passive investing, I think another great investment people should make is spending the time to understand long-term value investing—Warren Buffett-style stock selection. Now, granted, this one isn't for everyone. You need to have the right temperament; that is absolutely essential. But I think it is worthwhile investing the time at least to learn about it in case you feel as though you can implement this strategy successfully.

Why? Because if you can learn to keep your emotions in check and invest in high-quality businesses with low risk of bankruptcy and invest in them when they're at steep discounts to their intrinsic value, then it's not out of the question for you to achieve, say, a fifteen percent per annum return as opposed to, say, seven or eight percent from the index fund. Now, this snowballs your money much, much faster than passive investing, but as I said before, it's difficult to do.

No, it's not hard intellectually; it takes some research and practice, but it isn't that challenging. However, over the years, it has proven to be very difficult emotionally. That's why so few people can do it well. It requires you to block out emotion, not be influenced by the news articles, not to feel the fear of missing out, not to jump on speculative bandwagons. And you know, in practice, unfortunately, very few people can do that.

However, if you wanted to learn more about this approach, I would highly recommend reading "Rule One" by Phil Town; that is a great entry point. And also, shameless plug, you know, I have made a full eight-hour video course on this strategy that is modeled off of Warren Buffett and Charlie Munger's investment strategy. If you wanted to learn more, it's called "Introduction to Stock Analysis." You can find it over on Profitful, which is always linked in the description if you wanted to check that out. But overall, that is number four.

Then finally, the fifth best investment I believe, you know, an everyday guy or gal could make, is quite simply starting a business. Now, I left this one to last because, you know, this one honestly isn't for everyone. I do not believe everyone is cut out for running a business, and you know, that's okay. If you know that's not you, that's all good. But if you're driven, if you're competitive, if you're the type of person that is always trying to progress, always looking to the next thing, then maybe starting a business is a good idea.

No doubt, the world of business is hard. A lot of great businesses do still end up failing, but if a business succeeds, there's no denying there can be some serious financial rewards—like life-changing financial rewards. And I can speak from experience here, because a few years ago I decided to focus all of my energy onto my two businesses, and I'm very fortunate that they have succeeded.

And literally, it has changed the way I see the world; it has changed my life, and I do mean that very seriously. But along the way, I can definitely understand that, you know, you need to be a certain type of person to make a business work. Remember, you know, if you run a business, weekdays, weekends, public holidays—it doesn't mean a thing. There's no such thing as, you know, done for the day. You're done when the tasks that need to be completed are completed.

There are times where everything seems to be going wrong, and you know, it falls on you, the business owner, to fix it. However, you know, if you like a challenge, I would highly recommend at least giving it a go at some stage in your life, you know, preferably when you have very little to lose, because you never know; it could just change your life.

Now, I guess my only other bit of advice on this topic would be, you know, if you're going into business, pick something that you're just really pumped up about. You know, if you do that, then a lot of the time you spend on the business won't feel like you're working. And personally, I think that's the way to find true business success.

But I think, overall, guys, they are my top five investments for life for most people. I think definitely, you know, a house makes sense. Investing in the stock market makes sense. If you're an employee or if you know a carpenter or a plumber or a physiotherapist or whatever, definitely investing in your own skill set is going to be a very, you know, important part of you know, finding a lot of financial success throughout your working career.

So hopefully this video has kind of helped you out, maybe provided some inspiration. If you did find it enjoyable or if you found it useful, then please leave a like on the video. I certainly appreciate it, and of course, I always say this, but it really does help out, gets the video going in that YouTube algorithm so that more eyeballs get on this video.

So it's the easiest, simplest way to help out the channel, and it really does mean something, and I really appreciate it. So thank you guys very much for that. Consider subscribing as well if you haven't done so already. I say this quite frequently that most of my views actually come from people that aren't subscribed, so definitely, you know, if you like talking about business and stock market investing and all sorts of stuff like that, then consider subscribing. I'd really appreciate it. Join the bandwagon; why not?

And if you wanted to check out Profitable, I've already plugged it, but links down in the description below if you wanted to check that out. But guys, that will just about do me for today. Thank you very much for watching. Hope you enjoyed the video, and I'll see you guys in the next one.

Hey guys, thanks very much for watching the video. So every now and again, people reach out to me and ask what stock broker I use for the trading or the investing that I do over in the United States. For that, the brokerage site that I use is Stake. Now, Stake has been a long-term sponsor of this channel, and the reason for that is because I really believe in their platform.

So what they offer is a brokerage-free trading platform, so you can buy and sell stocks—listed stocks—brokerage-free. Now, typically, if you went through say, ComSec, what you would have to pay is you would have to pay first of all a foreign exchange fee, and then you would also have to pay international brokerage fees. Ends up being very expensive. So Stakes still do charge the foreign exchange fee, but once your Australian dollars have been converted over to US dollars, then beyond that, the trading is free.

So Stake is the one that I use. I really do like their platform, and of course, the reason that I like partnering with them is they give you guys a really good deal. So if you sign up to Stake using the referral code AWC—wow, that's going back; that's back to Aussie World Creation days, if you remember. So if you sign up using the code AWC and fund your account, you're going to be given one free stock.

So, hey, pretty good bonus! It's better than a poke in the eye. So if you'd like to check that out, check out the links down in the description. Thanks to Stake, as always, for helping make this channel financially viable for me and sponsoring this content. And thanks to you guys for watching. I'll see you guys in the next video.

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