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Millionaire Tries The Investing $100 Challenge (How to Invest For Beginners - Episode 1) - YouTube
Channel: Mark Tilbury
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hi it's mark so have you ever had a
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hundred dollars in your pocket and
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wondered how you could turn it into a
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thousand ten thousand or even a hundred
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thousand dollars well sadly this isn't
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something they teach in school come to
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think of it it'd have been pretty
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awesome if they had because of this lack
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of knowledge it seems pretty scary for
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most beginners to get started in
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investing but in today's video i'm going
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to simplify the whole process invest in
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my money allow me to become a
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multi-millionaire and guess what i
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started with that's right a hundred
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dollars well probably less than that to
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be honest i'm not saying becoming rich
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is easy but by taking calculated risks
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you'll be able to grow your wealth over
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time i understand everyone has a
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different risk tolerance so today i'm
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going to be revealing how to invest for
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beginners with a hundred dollars and as
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we go through the video the risk is
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going to increase but remember as the
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risk goes up so does the potential
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reward i'll also be putting my money
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where my mouth is and investing a
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hundred dollars into each one of these
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options so you can see exactly how to do
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it i'm just about to invest in something
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i never thought i'd actually do it goes
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when someone asks me how they should
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invest a hundred dollars i usually say
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invest in yourself you can do this by
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buying books and improving your skills
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but assuming you've already done this
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now we're going to be talking about the
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specific places you can actually put
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your money now i'm a businessman i'm not
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a financial advisor these are just some
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of the ways i've invested my money over
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the years and they've worked for me you
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can also sit back and relax because i'm
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not going to try and sell you anything
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at the end just remember if you enjoyed
[94]
the video then smash that like button
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because it really helps push this video
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out to more people and also consider
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subscribing if you want to grow your
[101]
wealth the first investment is a high
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interest savings account this is a one
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out of ten on the risco so the lowest
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possible risk that you can have nowadays
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it's extremely hard to find any savings
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account that will pay a substantial
[114]
amount of interest but that's not the
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main reason it's on the list by putting
[118]
your money into a savings account you're
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actually starting to create what i like
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to call an emergency fund which i
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believe everyone should have this is
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money that you can access if something
[127]
unexpected comes up and it's extremely
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low risk and by having money on hand you
[132]
can avoid getting into debt and having
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to pay crazy fees back i remember when i
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bought my first apartment i had a minor
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crisis after about two months as a hot
[140]
water system went wrong and it needed
[142]
replacing because of my emergency fund
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it saved me over 200 as i didn't have to
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take out a payday loan when you leave
[149]
your money in the bank it slowly loses
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its value so when i am looking for the
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best savings account to combat this i
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look for two things the first of course
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is a good interest rate which depends on
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the economy mostly the second thing is
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having the ability to access my money
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instantly some banks that are really
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worth looking at and consistently have a
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good rate of interest are ally bank
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markets by goldman sachs and citibank i
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currently have an account with markers
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by goldman sachs and their interest rate
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is 0.7 which isn't very high but it is
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currently one of the best available so
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there we go nice and easy 100 deposited
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into my savings account now for gold
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often referred to as a safe haven i'll
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give this also a 2 out of 10 on the risk
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out did you know that since the creation
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of the federal reserve in 1913 the us
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dollar has lost 95 percent of its value
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so you're actually only left with five
[202]
percent of its original purchasing power
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so if you want to stop your money losing
[205]
value then maybe gold is for you if you
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had a hundred dollar nugget of gold in
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the year 2000 it would now be worth
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approximately 580.
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the piece of gold hasn't actually
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changed in size it's still the same
[218]
piece of metal but what has actually
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changed is the value of your dollar and
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how much gold you can buy with it gold
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was actually our original currency used
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by our forefathers i remember those days
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well it's perfect as it can't be
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manufactured and it lasts for thousands
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and thousands of years so if you've ever
[235]
watched gold rush on tv you'll know how
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hard it is to actually mine this stuff
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out of the ground now you may be
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wondering if it's so safe why have i
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given it a 2 out of 10 on the risco it
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all comes down to opportunity cost you
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have to ask yourself if you really want
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to just protect your 100 against
[251]
inflation or if you want to invest it in
[253]
other opportunities
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which could make it grow a lot quicker
[256]
if you invest in gold then you would be
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missing out on these potential profits
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making it a little bit risky i would say
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that this is the perfect investment if
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you have a lot of money already and all
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you want to do is just protect it there
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are two different ways that you can
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invest in gold the first way would be to
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actually buy physical gold but if i
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bought jewelry i know gold bars coins
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and that sort of thing i'd probably be
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paying too much because the person
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selling it would want to make a profit
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which means i would be paying more than
[284]
the true value of the gold itself the
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alternative is to invest in gold within
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a broker app like robin hood in the usa
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or trading 212 in the uk then you're
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able to buy gold at its true value and
[296]
have the option to sell much quicker in
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the usa i would look for the gld etf on
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robin hood which is one of the largest
[303]
gold etfs in the world as of june 2020
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they hold over
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million ounces of gold in vaults all
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around the world as i'm currently in the
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uk i'm gonna invest using trade in two
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one two in a similar share and with just
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a click of a button there you go i'm now
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mr gold man if that doesn't sound
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exciting enough for you then why don't
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you try a simple low-cost index fund
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i'll give this a 3 out of 10 on the risk
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scale if you invested just 100 per month
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into an index fund with a 7 annual
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return then after 30 years you'd have
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123 thousand dollars that's the power of
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compound interest you can do all of this
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without having any knowledge of the
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stock market i remember when warren
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buffett one of the richest men in the
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world placed a million dollar bet that a
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simple s p 500 index fund would
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outperform a professionally picked
[356]
portfolio of hedge funds over a 10-year
[359]
period now this contest wrapped up in
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2017 and the results were made public
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warren buffett had actually won a
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million dollar bet which really shows
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the power of index funds and that the
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everyday person can take on the pros
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with little to no knowledge imagine an
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index fund is like a bag of haribo
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gummies the machine in the factory puts
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a range of the most popular candy into
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one bag so you can enjoy the best of the
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best without having to pick and buy each
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and every one individually now just
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replace the candy with companies that's
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what an index fund is you can buy your
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own selection bag of the most popular
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companies in the world such as apple
[398]
microsoft amazon and facebook and your
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money is split between all of them now
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let's go back to the haribos imagine you
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left these on the side and they're open
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for a few days or so they'd go hard and
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they certainly wouldn't taste as good
[411]
would they but by putting them in a
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container you can stop that from
[414]
happening
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this is very much like index funds is if
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you leave them unprotected the
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government will start taxing you on the
[421]
profits you make but you can protect
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them with a sort of container like this
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which is known as different things in
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different countries in america it's
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called a roth ira and in the uk it's an
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isa these containers allow you to
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protect your money after tax and then
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any profits you make are yours to keep
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but because they're so good and they're
[442]
so powerful there's a cap on how much
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you're allowed to invest each year so if
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i was you i would take full advantage as
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soon as possible and max out your
[451]
allowance there are more in-depth
[453]
strategies you can use but for the
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purpose of this video i'm going to be
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investing a hundred dollars into an s p
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500 index fund which over the last 20
[462]
years has an average yearly return of
[464]
seven percent drop a like if you'd like
[467]
a full video covering this topic because
[469]
there's so much on this we could talk
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about but mark a hundred dollars isn't
[473]
enough as the s p 500 is over three
[476]
thousand dollars a share well you don't
[478]
actually have to buy a full share to
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invest my favorite brokers are fidelity
[482]
child swap and vanguard so if we head
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over to vanguard's website now and we
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find the s p 500 here you can see what
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companies are in the index fund so you
[492]
can buy the right one so all you have to
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do is create an account i already have
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one and deposit some money and then
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click there you go job done the fourth
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way to invest is in a real estate
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investment trust otherwise known as a
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reit i'll also give this a three out of
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ten on the risk scout now imagine your
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friend collected a hundred dollars from
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three thousand people he will have three
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hundred thousand dollars then he takes
[515]
this money and he buys a property he
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rents it out and splits it with all
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three 000 people that helped him buy the
[520]
property which helps them start
[522]
generating some of that sweet passive
[524]
income that's the basic way of
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explaining a reit it lets everyone
[528]
benefit from investing in income
[530]
producing properties without actually
[532]
buying one think of it like buying a
[534]
small share in a property let's say you
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own the front door someone else owns the
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windows and a few other people own all
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the bricks but all together you own the
[543]
property equity reits own things like
[546]
offices shopping centers apartments
[548]
hotels and much more and they get their
[551]
income through the rent by law they have
[553]
to pass on 90 of all profits to the
[556]
investor like a dividend however they're
[558]
taxed a little differently the cool
[559]
thing is that at the start of 2019 the
[562]
10-year average return for re-etfs did
[565]
better than the s p 500 with an average
[568]
return of 10
[570]
if you're in the usa by investing in the
[572]
vg slx by vanguard you can average a 12
[576]
percent return which beats the average
[578]
real estate investor how awesome is that
[580]
as i'm in the uk i'm going to use the
[582]
trading 212 website to put a hundred
[584]
dollars into a similar reit it has high
[587]
global diversification meaning i can
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invest in all the up and coming property
[591]
markets around the world the next option
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is buying and selling items the risk on
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this really depends on how good you are
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at finding great deals but i'll give
[599]
this a i know four out of ten on the
[602]
risk scale the good thing about doing
[603]
this is that you can buy and sell
[605]
something that you're interested in and
[606]
have knowledge about which can lead to
[608]
bigger possible returns now i'm going to
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invest my hundred dollars in either
[612]
pre-owned radio control model gear or
[614]
golf equipment both of these i've got an
[617]
interest in so i should have a
[618]
reasonable idea of what each item is
[620]
worth pokemon cards would be a great
[622]
area to have some expertise in as their
[624]
value at the moment is skyrocketing
[627]
logan paul just bought a charizard card
[629]
for over 150
[631]
dollars how mad is that so i've been on
[634]
facebook marketplace as most people have
[636]
access to that platform and i found
[638]
myself a model engine that i'm going to
[639]
go and try and buy it's up for 75 pounds
[642]
which is approximately 100 us dollars we
[644]
sent a few messages back and forth and
[646]
i'm going to go and have a look at the
[647]
item now
[657]
hello there i've come about the engine
[660]
oh in the box as well cool that's good
[663]
cool it looks right so would you take 70
[666]
for it no i've got 75. this box in good
[669]
condition
[670]
can you do a bit better i'll tell you
[671]
what i can do
[675]
there you go i'll throw that in really
[677]
that's what it came out of 75 quid
[679]
that's that's a deal okay there you go
[681]
i'll give you 75 quid there you go and
[684]
we're videoing this for our youtube
[685]
channel do you mind no that's fine all
[687]
right then see you again thanks a lot
[689]
thanks for that
[692]
so i've done a listing on ebay for the
[694]
model engine and the model plane i'm
[696]
going to actually advertise on a
[697]
specialized website for model flying as
[699]
i'm sure i'll be then selling to the
[701]
right people and hoping for big profits
[703]
now we're starting to get serious it's
[705]
time for individual stocks this gets a
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6.5 out of 10 on the risk scale there's
[710]
a certain amount of risk that comes with
[712]
investing in individual stocks but if
[714]
you pick your companies well then it can
[716]
be really exciting is there's the
[718]
potential to make a lot of money during
[720]
a dot-com boom back in 1995 i was really
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lucky to pick a few great stocks which i
[726]
cashed in and i made a lot of money in a
[728]
very short period of time when the
[730]
bubble burst some of the companies i'd
[731]
held on to which has cost me very little
[734]
went completely out of business luck and
[736]
timing can be a very crucial part of
[738]
stock investing i picked these stocks
[740]
using what's called fundamental analysis
[742]
which means i looked at the business
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financial statements their market and
[747]
also the leadership of their companies
[749]
back then this was a lot of work but now
[751]
it's easily found out on yahoo finance a
[754]
while ago i read an article about an
[756]
experiment where they simulated 100
[758]
monkeys throwing darts
[760]
like this at the financial pages of a
[762]
newspaper the stocks the monkeys picked
[765]
on average outperformed the so-called
[767]
smartish hedge fund managers on wall
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street so for this video i thought it'd
[770]
be fun to put this theory to the test i
[773]
don't have a monkey so i thought i'd
[775]
have to do so i'm going to throw a dart
[777]
at the board and as you can see i've
[778]
randomly selected 20 different stocks
[781]
and wherever the dart lands that's what
[783]
i'm going to invest in now i've just got
[785]
to put on a blindfold okay here we go
[790]
right let's see what we got
[792]
and we've gone into samsung
[795]
right so i'm going to jump straight onto
[797]
my brokerage account and set an order
[798]
for samsung
[801]
if you want to invest your hundred
[802]
dollars in individual stock then weibo
[804]
are currently giving away three free
[806]
stocks for a limited time when you
[808]
deposit a hundred dollars into your
[809]
account i'll just leave the link in the
[811]
description if you want to pick up those
[812]
free stocks so now we're going to be
[814]
moving into the realm of gambling and
[816]
speculation rather than investing number
[819]
seven is cryptocurrency this is a 9 out
[822]
of 10 on the risco so you've probably
[824]
heard of bitcoin this is currently the
[826]
most popular type of crypto if you had
[828]
bought a hundred dollars worth of
[829]
bitcoin in 2015
[832]
today it would have been worth around
[834]
about five thousand dollars that's a 5
[837]
000 return on your investment and that's
[839]
pretty unheard of therefore many people
[841]
that invested in bitcoin in the early
[843]
days became millionaires overnight but a
[845]
lot of people also lost money if you'd
[847]
invested around a hundred dollars in
[849]
december 2017 when bitcoin was at an
[852]
all-time high by december 2018 you'd
[856]
have had less than 17 left so really no
[859]
one really knows what it's going to do
[861]
next it's extremely risky but still very
[864]
attractive because it has the potential
[866]
to make you millions there are three
[868]
main types of cryptos these are ethereum
[870]
ripple and obviously the big one bitcoin
[873]
but let's just focus on bitcoin today if
[875]
you want to learn more about other types
[877]
of coins you can read something called a
[879]
white paper and it will give you all the
[881]
details the cool thing about bitcoin is
[883]
that it uses something called blockchain
[885]
and it isn't regulated by the government
[887]
you also can't create any more bitcoins
[889]
which makes inflation absolutely
[891]
impossible in my opinion this investment
[893]
will probably only make sense if you're
[895]
investing an extra hundred dollars that
[897]
you don't really need so i'm going to
[898]
jump onto the most popular bitcoin app
[900]
which is called coinbase and invest my
[903]
hundred dollars in bitcoin and forget
[905]
about it
[907]
by the way if you want to give this a
[908]
try i'll put a link to coinbase in the
[910]
description down below and you can pick
[913]
up ten dollars of free bitcoin at least
[915]
that gives you a bit of a head start the
[917]
last is definitely a full-on gamble you
[919]
may have guessed it already it's the
[921]
lotto this is definitely a 10 out of 10
[924]
on the risco and isn't something i would
[926]
recommend doing however i thought i'd
[928]
include it in this investing video as so
[930]
many people choose to do it in fact 57
[933]
of all americans buy at least one lotto
[936]
ticket per year the chance of actually
[938]
winning is 1 in 14 million which might
[941]
sound quite possible but let me just try
[943]
and put that into a bit of perspective
[945]
you're 4 000 times more likely to win an
[948]
oscar than win the lotto millions of
[950]
people lose their money every year but
[952]
they keep playing as the rewards are sky
[955]
high if you win i'm just about to invest
[958]
in something i never thought i'd
[959]
actually do it goes can i have 100
[962]
scratch cards please
[967]
lovely thank you very much thank you
[968]
cheers and thanks bye as you can see
[971]
this is going to take me quite a while
[973]
i'm going to leave a counter on the
[974]
screen so you can see how much i've
[976]
spent versus how much i've earned back
[978]
from my investment let's do this
[982]
[Music]
[988]
i hope there's a bit more in this lot
[989]
there's got to be hasn't it
[1001]
so we're halfway through the most we've
[1003]
earned so far is three dollars on one
[1005]
ticket i'm going to need some help i've
[1007]
got 50 more to go come on curtis i know
[1009]
you've been itching to have a go at this
[1011]
have you got your coin ready i do ready
[1014]
let's race to see wait for it who can
[1017]
find the most money in the remaining 50
[1019]
cards ready okay on your marks get
[1022]
set go
[1027]
y'all ready to go
[1030]
come on
[1034]
15
[1037]
really yeah no yeah
[1039]
oh wow 15.
[1042]
he's only just started doing this he's
[1044]
got more than me
[1047]
[Applause]
[1050]
find a 2x to win two times that must be
[1054]
ten dollars we think is that ten dollars
[1056]
ten dollars ten dollars
[1058]
[Laughter]
[1060]
you say you're smashing me but i'll tell
[1062]
you what how about this how about this
[1065]
another dollar
[1066]
[Music]
[1066]
[Laughter]
[1068]
[Music]
[1070]
you're ready now i'm making my move
[1074]
better
[1075]
cause i'm coming through i'll tell you
[1077]
what this has gotta be an astonishing
[1079]
last four cards if we're gonna get any
[1081]
money back from this so we just came
[1083]
back and we double checked it we made
[1085]
back fifty dollars from our hundred
[1087]
dollar investment now you may think that
[1088]
sounds pretty good but that's actually a
[1090]
negative fifty percent return this was
[1093]
meant to be a little bit of fun but it's
[1094]
pretty sad to think that people play
[1096]
this regularly and on average are losing
[1099]
half their money when they could pick
[1100]
any one of the other investments in this
[1102]
video and have a much better chance of
[1104]
being successful i hope this has taken
[1106]
some of the mystery away from the other
[1108]
forms of investing and made them a
[1109]
little bit more understandable for
[1111]
beginners if you'd like me to make a
[1112]
part two of this video to see how these
[1114]
investments have done over a month then
[1116]
make sure to smash that thumbs up button
[1118]
to let me know i'm going to leave the
[1119]
next video here but don't click on it
[1121]
just yet remember to subscribe to the
[1123]
channel and ring that notification bell
[1125]
so you don't miss out on part two okay
[1128]
i'll see you on the other side
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