Lecture on Investing Correctly

Introduction

• Wealthiest people don’t work for their money, they make money work for them.
• The goal is to invest correctly based on current financial status.
• Traditional investing isn’t always suitable for beginners with small amounts.

Definition of Investing

• Investing: Allowing money to work for you to make more money.
• Example: Buying something for $10 to sell for $20 later.

Five Stages of Investing

Stage 1: $11,000 or Less and No Cash Flow

• Avoid traditional investing (stocks, shares, crypto, etc.).
• Focus on high ROI assets you can control.
• Invest in skill-building (e.g., Digital Launchpad for $37/month).
• Examples: Learning to create content, coding workshops.

Stage 2: Limited Savings and Making a Few Thousand per Month

• Build emergency fund (3-6 months of necessities).
• Determine risk tolerance and set realistic goals.
• Avoid individual stocks; invest in index funds like S&P 500.
• Consistent investing (dollar-cost averaging).
• Power of compounding interest.

Stage 3: $10,000 Saved or Making $4,000 - $5,000/month

• Continue habits from Stage 2 with increased investment amounts.
• Focus on making more money and increasing investment amounts.
• Maintain diversified portfolio, possibly increase contributions.

Stage 4: High Income or Business with Five-Figure Income

• Diversify risk with crypto and individual stocks (if knowledgeable).
• Wealth-building through more volatile assets.
• Invest in properties, software companies, etc.
• Focus on areas where the investor has a competitive advantage.

Stage 5: Managing and Protecting Wealth

• Invest in fixed-income assets and risk management.
• More focus on preserving wealth.
• Consider bonds, real estate, safe assets.

Important Concepts

• Emergency Fund: Essential for financial safety.
• Risk Tolerance: Only invest what you can afford to lose.
• Setting Goals: Realistic and long-term.
• Automated Investing: Regular, automatic investments in index funds.
• Dollar-Cost Averaging: Reduces risk by spreading out investments.

Practical Advice

• Spend initial small investments on skill-building.
• Compound interest can make anyone a millionaire given time.
• Always focus on long-term planning and good financial habits.
• Realize the value of investing in oneself first and foremost.

Conclusion

• Investing should always be supplementary to one's main focus or business.
• Investing in oneself is the most valuable and secure investment.
• Build a diversified, well-protected portfolio over time.
• Consistent effort and smart decisions at each stage are key.