How To Invest in 2024 (How ANYONE can be RICH)

What's up you guys, it's Graham here. So this is a tragedy. After posting the video about the money mistakes to avoid in your 20s, which by the way, if you haven't seen that video already, make sure to check that out so you can smash that like button.

Two things came to my attention. First, people don't know what avocado toast is. Not okay! As a millennial, I am only slightly offended! For anyone who doesn't know what avocado toast is, it's avocados, and it's on toast, and it's absolutely delicious. Secondly, it's come to my attention that people do not know how to invest so that they can get filthy rich and buy Lamborghinis. How do I know this? Because I get comments like this! That's absolutely unacceptable!

What's even worse is that none of this stuff is taught in schools because schools think it's more important to teach you things that you're gonna be using day-to-day in the real world, like Algebra 2. And secondly, it seems like very few parents teach their kids how to do this because they're more concerned about their kid doing their Algebra 2 homework for a good grade than learning how to be a financially literate adult. But you know what? That's none of my business!

So instead, I'll put all the basics about investing here for you guys to watch and enjoy, and all I ask in return is that you hit the like button and subscribe if you haven't already. So let's go ahead and start here: How do you start investing your money? What can you invest it in to get an 8% return on your money? And how can you afford to buy avocado toast without breaking the bank?

So here's how. Because everyone really appreciates specific step-by-step examples, I'm gonna be as specific as possible here, starting from the least risk lowest return investments all the way to the highest risk highest return investments that you can make. Enjoy!

So number one, for everyone looking for just a basic place to put your money, we have the almighty Ally Bank online savings account that gives you a 2% interest rate on your money. This is literally as simple as going to alikom, opening up their savings account, and depositing money, and then you're done. If you haven't already joined Ally Bank, they are by far my favorite online bank. They do free checking accounts, free savings accounts, free debit cards, free checks, free just about everything with no monthly fees. Did I mention it's free? And I really like free, so that's why I like Ally Bank!

You can also decide to use a few other high interest savings accounts like Barclays, Synchrony Bank, or American Express Savings that all currently offer around a 2% return, and this is personally what I do for any money I know I will need in the near future. This is because I do not recommend you invest any money you know you're gonna need over the next five years.

Like if you're saving up for a down payment on a property, you're saving up for a business, or you're saving up for whatever specific purpose like BitConnect—keep your money out of the markets. The reality is that in the short term, the market could be way too volatile to guarantee any sort of profit. We have no idea where the markets will be five years from now. And while you could absolutely come ahead by investing your money for a profit in a short term, there is no guarantee of that outcome, and you could actually end up losing money. So don't do that! Don't lose money.

Instead, if you have money that you know you're gonna be needing over the next one to five years, just do what I mentioned and put it in a high interest online savings account. That way, you know you can pretty much get a guaranteed 2% return on your money with absolutely no work and absolutely no risk, and simply sit back and call it a day. Then make YouTube videos about sitting back and calling it a day by using an online savings account. So just do that!

So the second thing I want to mention—and arguably, this is the most important point of this entire video, especially when it comes to investing—is if you haven't already done this, set up a Roth IRA. Like no joke, doing this is just as important as me telling you guys to get a credit card to start building your credit. Start a Roth IRA! Do this tomorrow! And I guess if you're watching this tomorrow, just do it now. Just trust me on this one; just do it right now.

This is basically just a retirement account that you could put money into, and by the age of fifty-nine and a half, you could pull out all of your profit completely tax-free without paying any capital gains tax. Now, prior to the age of fifty-nine and a half, you can pull out whatever money you contributed to that account, but whatever profit you made from that money must remain in there; otherwise, you end up paying a penalty.

For instance, if you put in five thousand dollars to a Roth IRA and it grows to seven thousand dollars, you can pull out that original $5,000 at any time, but that extra $2,000 profit must remain in there. Otherwise, if you take out that profit, you're gonna end up paying taxes on that money as well as paying a 10% fee. It's just not worth it! So don't do that.

Now, because this could be a little bit confusing, the Roth IRA is not the investment itself; it is simply just a retirement account for you to hold investments within. Just imagine this almost like a brokerage account, and with that account, you can invest in stocks, you can invest in index funds and bonds, or you can even invest in real estate.

Especially when you're young and not making a ton of money right now, doing a Roth IRA is one of the best things that you can do for a few reasons. Number one is that chances are right now you're already in a low tax bracket, so your money is barely being taxed as it is. And second is that you have decades now of compound interest that is going to help grow your money into something substantial.

Consider that every dollar you invest at the age of 20 is actually worth twenty-one dollars and seventy-two cents by the age of 60, assuming an 8% average return. That pretty much means that you would be paying taxes on twenty dollars and seventy-two cents of profit, but with the Roth IRA, you will pay absolutely nothing in taxes. There's absolutely no reason for you guys not to do this. I opened up one of these accounts when I was twenty. By far, this is one of the best decisions that I have made.

Number three, in terms of actually what to invest in, my biggest recommendation for most people is to invest in an index fund with a low expense ratio. This is because the majority of investors, and even hedge funds, cannot consistently beat the market. So instead, it's better just to ride the market. When everyone always asks me, "Graham, how can I get an 8% return?" this is pretty much always my advice.

Long-term, historically, the stock market has averaged about an 8% return adjusted for inflation with the dividends reinvested. This is why I believe for most people out there, this is the safest, highest yielding long-term investment out there, besides real estate, of course. But when you invest in an index fund like this, they always carry a small fee to them, so it's very important that when you invest in something like this, you invest in the cheapest fund you possibly can.

When it comes to that, you know I like cheap stuff! For me, it's always with Vanguard. Their fee is one of the lowest out there at 0.04% annually. This all might sound a little bit more complicated than it actually is—it's super easy! Let me explain: An index fund is basically just a fund that comprises hundreds or thousands of different companies, and you can own a fraction of all of them for a fairly low price. That's basically just what an index fund is, and it gives you the ultimate diversification for a very low price.

Now if it were me personally, and again this is not financial advice for educational purposes only, I would go to Vanguard.com, open up a Roth IRA, and then put all of your money in VTSAX. This is a total stock market index fund that comprises the entire US equities market for the low price of only $69 per share, with a minimum investment of $3,000.

Now, historically, over the last 19 years, this fund has gained about 7% annually, and over the last 10 years, we've seen a 12% return. Now this isn't to say that the markets might not go down in the short term—and it's very well possible—but like I said, long term, with risk comes reward, and holding this long term should have a fairly positive outcome again when you hold it over the next 20 or 30 years.

Another favorite of mine is what's called the S&P 500, which covers the top 500 companies here in the United States. And again, since the inception of this one, we have seen a six and a half percent return, and over the last ten years, we've seen just about a 12% return. You can also look into investing in a target date retirement fund, which basically just takes the guesswork out of figuring out what to invest in. You just figure out what year you think you're gonna retire into, and the fund does the rest of the work for you.

So for most people out there who don't really wanna think about what they're doing and figure out, "I'm just going to retire in 40 years or 30 years or 25 years," or whatever it might be, that's probably the easiest thing for you to invest in.

Okay, so now number four, I figured I would put this here instead of putting it back to back with the Roth IRA, and that is opening up a traditional 401k. This is one of those things where if you're already opening up a Roth IRA, you may as well just open up one of these bad boys as well. A traditional 401k is basically an account where whatever you contribute to that account is deducted from your total taxable income, saving you money on taxes. You could then grow that money completely tax-free within the 401k up to the point that you take the money out of the account or the age of fifty-nine and a half.

This means you're gonna be having more money to invest because you're gonna be saving that money from paying taxes. For example, if you're making $50,000 a year and you invest $10,000 into a 401k, you're only going to be taxed as though you just made $40,000, saving you from paying taxes on that extra $10,000 that you invested.

Now, if that sounds too good to be true, it kind of is, because the catch to this is that you end up paying taxes on that money after the age of fifty-nine and a half whenever you take the money out of the account. Also, you cannot take out your money prior to the age of fifty-nine and a half without then paying taxes on that money that you would have ordinarily had to pay, plus by paying also a 10% penalty on that money.

So basically, if you open up a 401k and invest money into it, just do it with the expectation that you're not going to be using that money until you retire or until after the age of 60. But if you're cool with that long-term, go ahead and absolutely do it!

But really quick, one of the best parts though about a 401k is that many employers will offer what's called an employer match. This means your employer might match whatever you contribute to a 401k up to a certain amount. If your employer offers any type of employer match, always do it, no matter what, in every single situation! It's basically free money. Who doesn't like free money? Nobody! Nobody doesn't like free money!

So ask your employer if they offer one, and if they have an employer match, and if they do, always contribute up to the maximum of the employer match. So for instance, if they match the first thousand, contribute always a thousand dollars to the 401k because they will match it. If it's two thousand dollars, do the same thing—contribute two thousand dollars to it. Whatever the match is, always meet the match! Always meet the match!

I guess that works. Number five, back to investment options: If you're into it and don't mind doing a little bit more of the work yourself, you can invest in individual stocks. I personally recommend, if you're gonna do this, do this within a Roth IRA or a 401k so you could avoid being taxed on whatever profit you have. But you know what? It’s totally up to you! That is not required! You could just as easily open up an account with Robinhood, invest within that completely commission-free, and reap some pretty good returns.

For instance, Amazon is up 50% this year, AMD is up one hundred and thirty percent this year, Tesla is also up fifteen percent this year, and Facebook is down 20%. That sucks! But as you can see, if you end up picking some winning stocks, you can do substantially better than investing in a broad index fund. However, just keep in mind that when investing in individual stocks, it's a lot riskier and because you have less diversification, if the stock goes down, you have the chance of losing a lot more money. So that's got to be a risk you're willing to take.

But individual stocks can definitely be a great way to invest if you have a knack for it, if you enjoy keeping up with stock market news, and you end up picking some winning stocks. The one thing I should note is that usually the average investor cannot consistently beat the market with individual stocks (including myself), and that's why I don't even try.

This means that most investors out there would generally be better off just investing in a broad index fund and riding the market than trying to consistently pick winning stocks that will do better than that. So again, if you're the type who doesn't want to do much work, or the type who doesn't want to take on a lot of risk, or the type who doesn't want to trade stocks every few years, I recommend an index fund. If that is not you, then by all means, go and invest in individual stocks if that's something you have an interest in.

Now number six, obviously, is by far my number one favorite from the entire list, and that is investing in real estate. Unfortunately, this is probably one of the things that you're gonna have to work up to, especially if you're just starting out. Unless you have a lot of money already to work with, chances are this is something you're gonna be slowly working up to and saving up, and then eventually you can invest your money here.

Typically, you're gonna be needing a fifteen to twenty percent down payment to begin investing in real estate. And if you're in a very expensive area like me, that could mean you'll need a lot of money. But real estate is easily my favorite for a few reasons. The first is that you can get immediate cash flow from your investment, which means that every month when rent is paid, you get a check in your pocket.

Second, because of all of the great tax deductions of real estate, all of that money that you're going to be making, chances are, is going to be yours completely tax-free. Third, you're able to borrow most of the money you need to invest in real estate and then slowly pay that off over a long time. Fourth, you're also building up equity in the property as you're paying down the loan. And then eventually, after fifteen to thirty years, you're gonna own that property outright.

Finally, over the long term, that property is likely to go up in value. That's why it's no surprise that 90% of the world's millionaires are created through investing in real estate, and I am absolutely no exception to this. If you're interested in investing in real estate, I'm not gonna spend too much time on that here because my entire channel is dedicated pretty much to investing in real estate.

I have multiple playlists you can look through or just type in the YouTube search bar "real estate investing Graham," and you'll be able to see all my real estate investing videos. I easily have like 30 or 40 or 50 of them on my channel, so feel free to just go and check those out. They cover like 90% of what you're gonna need to know.

Finally, number seven is drum roll... investing into a business! This is where you can probably get the highest return out there from anything I've mentioned, from any investment out there, is simply within your own business. For instance, I tried running a few targeted Facebook ads from my program "The Real Estate Agents Academy" (link in the description for any real estate agents out there who want to grow their business to a six-figure career). I cover everything you need to know about that, link in the description!

But anyway, I ended up getting a 300% return on the money that I invested in Facebook ads in terms of product sales—a 300% return within really just about 48 hours! I've seen other businesses invest in branding, marketing, or other types of advertising with a phenomenal return. If this is the case, and investing back into your business is going to give you a substantial return, absolutely always do this in conjunction with a few of the things that I mentioned in this video that is no doubt going to give you the highest return possible.

This also includes using this money to invest in a business. It could be starting your own business, buying product, testing out ads, doing Shopify, social media marketing, or investing into YouTube equipment. For example, I spent $18,000 creating this YouTube studio for better videos for you guys to watch, and I ended up making my money back in extra YouTube ad revenue within two months. That means I got a 100% return in just two months by creating this amazing YouTube studio and buying a dinosaur skull!

Something like that can be a very, very good investment. The same thing, like buying better lighting (which I know I need to do) or a better camera—different things like this are always a good investment. So consider how you can invest within yourself, or invest in a business, or start a business, or do anything like that that could give you some pretty substantial returns.

But as I've mentioned time and time again, usually, the higher the return, the more the risk you take, and that is something you have to feel comfortable with. So hopefully, now you've got a pretty good understanding about where and how to invest your money to make you more money, to then make you more money, to then make you more money, so you can go on YouTube and talk about how to make more money!

And I guess, I guess that works. That'd be pretty fun! So anyway, you guys, thank you so much for watching. I really appreciate it! If you made it to the very end and you haven't already subscribed or hit the like button, just do both of those! Also, feel free to add me on Snapchat and Instagram; I post there pretty much daily, so if you wanna be a part of it there, feel free to add me there.

Finally, I have a private Facebook group for anyone interested in real estate, real estate investing, real estate agency, real estate coaching, mentoring, anything real estate. The link to that is in the description. Thank you so much for watching, and until next time!