this is my father Mervin Tilbury he's one of the hardest working people I know and as a kid I remember him working in a factory job making cable ties and a side hustle cutting grass so he could provide for me and my mum and my three sisters he'd stash away any extra money you made in a shoe box as well as a bank account that paid little to no interest hoping that one day he could quit his job working in the factory when my uncle invested some of his money in the stock market my dad said it was an extremely risky move unfortunately what my dad didn't realize is that he was also playing a risky game can you see where this story is going every year my father's money was losing value due to inflation this is just what happens over time as more money is printed the money in circulation becomes less valuable this meant he was never able to quit his job in the factory the thought of my money being eaten Away by inflation scared me so much that I've made sure to invest throughout my life as a result not only have I by beating inflation but my investments actually now grow by around 17 000 a week on their own which over my lifetime has made me Millions I'm no financial advisor but I am someone that's been there and done it that's why I'm making this video it's exactly what I wish I had when I was younger how can I make money investing in stocks to make money we first need to beat the inflation issue in the last 60 years this average is out to a rate of 3.8 per year so if your money isn't grown by more than this on its own then you're getting poorer by the second in a perfect world you would have a savings account that provides an average return of eight to ten percent every year so that you can both be inflation and earn some profit unfortunately such savings accounts don't exist however you can achieve returns like this by investing in the stock market a stock is a small part of a company and when you buy it you become a shareholder and when you're a shareholder there are two ways you can make money firstly if the price of the stock goes up during the time you own it you can sell it for more than you paid secondly you can receive dividends Dividends are regular payments to shareholders not all stocks pay dividends but if they do this means that you can receive money without ever selling your stock the magic really starts to happen when you own a bunch of stocks that grow at an average of 10 per year because the interest applied becomes larger and larger this is called compound interest and I have to admit a guilty pleasure of mine is messing around with online compound interest calculators let's do one now if you are able to invest 250 dollars per month at an eight percent annual return in 42 years you'd be a millionaire and if you continue to do this for another 10 years you would actually have over 2 million in your account of course if you wanted to invest even more then that would just speed up the process this is all based on historical average data and it isn't guaranteed but it's certainly been my experience so as you can see the real secret ingredient this millionaire formula is time which brings me on to when should I start investing the short answer to this is as soon as possible the younger you start the better as you're giving your Investments more time to grow and compound this also means you can take more risk as your Investments have time to recover if a stock market crash happens and it will happen it always happens but life isn't as easy as this as there are often things in the way preventing you from investing so here's how I would structure things first you need to make sure you've paid off all high interest debt like credit cards just think about it there's no point trying to make 10 in the stock market if you're paying 15 to a credit card company secondly build up an emergency fund this should be enough to cover three to six months of your living expenses this way you're not forced to sell your stocks in the event of an emergency which can really really ruin your progress once you've done both of these things you're ready to start investing if you're younger than 18 then it would be a great idea to ask a parent to open up a custodial account which allows them to invest for you this will give you such an advantage in the future your next question is probably something along the lines of how much should I invest when you ask an investor they'll probably say as much as possible however I have a different opinion I made most of my money through starting different businesses and only use the stock market to grow my wealth over time I've also had a pretty fun life from flying full-size airplanes and racing cars to competing for my country and travel in the world if I'd invested all of that money into the stock market then I'd have missed out on so much so my answer would be to invest whatever you feel comfortable with but if you want a more solid answer than a 70 2010 rule is a pretty good guide it states that you should split your money by these advantages seventy percent on living expenses twenty percent on investments and ten percent on the fun stuff research shows that people who invest at this level are much better equipped to ride the ups and downs of life and also get ahead of everyone else that's all well and good but how do I buy a stock there are various different apps out there that allow you to invest in stocks I'll leave some links below the key is to open the correct type of account you'll often hear people throwing around the terms Roth IRA in the USA and stocks and shares eyes are in the UK tfsa in Canada and supers in Australia if you don't have one of these accounts then you're missing out as they allow you to avoid paying taxes on your Investments but they do have limits because they're so powerful a great thing about these investing apps is they actually give you the ability to buy fractional shares so rather than buying a share of Apple for 190 dollars you can invest as little as one dollar I wish I had this option when I was young as it would have allowed me to get some early investing experience without having to take any big risks one of my favorite investing platforms is trading 212 as they do both of these things since I was planning to talk about our app anyway I reached out to see if they'd be interested in sponsoring this portion of the video they agreed and are also offering a free stock worth up to a hundred pound to anyone that uses the code Tilbury when they create an account one of the really cool things about trading 212 is they let you practice investing with fake money so you can get familiar with real data from the markets without risking any money so if you're a little uncomfortable with investing or just want to try some strategies before putting your own money on the line this is a great way to get started another great feature is called pies where you can see how other investors have allocated their money into different stocks if you wanted to invest a hundred dollars into that pie then it would just be split amongst the various allocations that that pie creator has chosen if you live in the UK or Europe it's worth trying out trading 212 because signing up is completely free and there are no commissions of course don't forget to use the code Tilbury and you'll receive a free share worth up to a hundred pounds or alternatively click the link in the description to sign up and see exactly how to access the free share now the obvious next question is how do I pick the best stocks there are two main ways to attempt to predict the stock market these are called Technical and fundamental analysis a good way to think about this is like a scale usually short-term day Traders are purely focused on the technical aspects this includes looking at charts and patterns they believe they can predict how the stock will change in price by judging the highs and the lows on the graphs as a long-term investor my strategy is about keeping it simple lots of people talk about using margin and options that's really not something I worry about I'm a lot more focused on the fundamentals of the company this includes the financials the leadership and the brand and recognition as I believe this is where the true information lies to indicate the long-term success of a stock when I invest in a stock I don't have an intention of selling it for at least two to five years however like I mentioned it's a scale so I do look at the occasional chart in order to find the best time to buy this approach has helped me find some really good Investments over the years rather than just dipping in and out trying to make a profit every day but with the majority of my investments I don't actually do any of this that's because I allocate most of my money to index funds this is definitely the best strategy for most people so what's an index fund it's a way for the average person to make more money than the professionals with very little effort I'm a big football fan and if you've ever followed any sports you'll be familiar with a lead table like this the better your team performs the higher up they'll be on the list on the other hand if they do really badly they might be removed from the league entirely this is almost exactly the same as an index all you have to do is switch out the teams for companies let's take the S P 500 for example this is a list of around 500 of the largest public companies in the USA the big dogs being Amazon Google Apple and Tesla just like the league table if a company does poorly then they run the risk of being removed from the list with this league table or index of companies you could go and buy stocks in some of them individually however if some something bad happens to those companies that you've picked then you can wave goodbye to your money the idea of an index fund is to be a little bit sneaky as it allows you to invest in every single company on the list with just one click even if a few companies do terribly then it's balanced out by all the companies doing extremely well the average annual return of the S P 500 over the last 10 years has been 13.6 although this is slightly higher than the average over time no one has ever lost any money if they've bought and held an S P 500 Index Fund for more than 20 years the truth is that the average actively managed fund returned two percent less per year than the market in general this means that the professionals on average are doing worse than index funds and even if they end up losing you money they still charge you high fees no matter what the reason that index funds can charge really low fees is because they're passively managed which means they look after themselves and don't need an X expert to keep adjusting them meaning the fees can be as low as 0.02 percent per year when I tell people about index funds it often blows their minds however when they go on to an investing app they get confused at the different options and ask what's the best Index Fund to invest in well as I said I'm not a financial advisor but I have had a lot of success with three different types of index funds number one tracks the S P 500 Index this is the one we briefly mentioned before the historical return of eight to ten percent has allowed me to generate a fortune over the years this is due to the power of compound interest the S P 500 tracks 11 different Industries sectors and no sector is more than 30 percent of the index however it is worth pointing out that it's a bit Tech heavy these days with five tech stocks dominating 23 of the entire fund it's up to you if you see this as a positive or A negative I personally don't mind as I believe in the future of technology there are so many different index funds that track the S P 500 so here are some of my favorites the best I found in the USA at the v5x index fund or the Vu ETF the best in the UK would probably be the V USA ETF the only real difference between an index fund and an ETF is that the ETF can be purchased or sold at any time throughout the day just like a stock index funds can only be purchased in full so for example if the price is 500 you must pay 500 an ETF on the other hand can be purchased in fractional shares which means you don't have to buy a full share and instead you can invest whatever amount you like this is great if you're just starting out or want a dollar cost average in personally I've set up a direct debit every month so the money leaves my bank account without me even noticing really and truly there isn't a huge difference between an index fund and an ETF just consider which one is best for you take the plunge number two is a total stock market market index the total stock market index has returned investors an average of 13 each year over the last 10 years which isn't bad at all here's the definition of diversification you can't really get any more skin in the game for a lower cost if you want to invest for a long period of time without having to even check or even think about it then this is most likely the fun for you investing in everything means you can experience gains across the entire market and unless a crazy crash happens you should be okay but even if it does crash with time things tend to bounce back I've seen three crashes since I've been an investor the.com bubble the 2008 financial crisis and the 2020 covid crash I'm not going to pretend these crashes didn't hurt but long term every Market I've invested in has bounced back the downside to this index is it depends on the entire Market trending upwards this means there could be an individual stock that you really believe in that goes to the moon but you might not experience those gains because that stock doesn't play much of a role within the index fund the best I found in the USA at the VT sax index fund and the vti ETF and the best in the UK is the vwrl ETF number three is the Emerging Markets index Emerging Markets are predicted by some experts to be on the rise and whether I agree with this or not I think it's important for me to have at least a little bit of exposure to these markets it's all well and good buying the S P 500 but when China or another emerging country has some great gains you'll end up missing out just as an example of this growth when I first traveled to China around 20 years ago I looked into buying an apartment in Shenzhen that real estate was forty seven thousand dollars and now it's worth over a million this just shows the potential growth in these markets Emerging Market funds are definitely the most risky type of index funds we've discussed these funding include stocks from lots of different growing markets and can be very heavy with Chinese companies taking a look at a list of the largest economies in the world a lot of them are Emerging Markets so it just makes sense to me to throw a little bit of money in for diversification the best I found in the USA is the v-e-i-e-x ETF and in the UK the vfem ETF but there are also lots of other Emerging Market funds available so it's worth having a look around now I know at some point I need to address the biggest question around investing which is of course is investing risky it really depends on how you define risk you may be scared that you'll lose money however you also face this risk by not investing as my father Mervin found out if you have a diversified portfolio of index funds and keep investing at a gradual rate each and every year then even if there is a stock market crash then historical data shows you should be able to endure the storm a great way to make sure you're protected in the event of a market crash is to mix in a few bonds within your stock portfolio these are just a different type of investment that are far more stable than stocks and you can buy these on the same investment Platforms in your 20s and 30s I wouldn't worry too much about them but as you move closer to retirement it's a good idea to have more bonds than stocks in my opinion in your younger years the biggest risk you can take is not taking enough risk now for the question on everyone's mind when should I sell my stocks it's possibly one of the most common questions in the Stock Investing World knowing when to sell stocks or hold on to them mostly depends on your age if you're older you've likely been investing for a while and can live off them during retirement by gradually selling when needed however if you're younger this usually isn't the case in fact if you're in your 20s to 30s there are only three good reasons to sell your Investments number one you need money for an emergency hopefully if you followed the video so far then you won't need to worry because you've got an emergency fund to help you out in times like this number two you made a bad investment if you have individual stocks that appear to be underperforming consistent it may be time to cut your losses before those losses stack up even higher before Panic selling take a good look at the wider industry if other Goods like it are also in Decline then you know it's the industry not just your stock if everything's doing poorly this gives you a bit of extra context number three you've achieved a specific goal although I don't really recommend it if you're investing for short or medium term goals like I don't know saving up for a dream vacation then it would be a great idea to set a Target price this is a figure at which you would feel satisfied selling a stock and enjoying your gains the most important thing to remember is to not sell your stocks for as long as possible so they have the longest time to grow just invest and forget about it until you want to stop investing and take your profits this thinking will also help you avoid Panic selling if you want to know exactly how I pick my individual stocks and you can check out this video next but don't click on it just yet make sure to subscribe tribe if you want to grow your wealth okay I'll see over there