Investing: How to Be Part of the 10% Who Don't Lose Money

90% of people lose money investing.📉

Here’s how you can be part of the 10% who don’t: pic.twitter.com/A3GJxQJ9XZ

— Ali Abdaal (@AliAbdaal) June 23, 2023

1 - The philosophy & basics of investing 📊

The way investing works is you put money into something & over time (hopefully) that money becomes worth more.

We do this to try to combat inflation.

So, when things that you have to buy are worth more, your money is also worth more.

— Ali Abdaal (@AliAbdaal) June 23, 2023

For example: If you were to put your money under your mattress, in a few years it’ll be worth the same amount.

But, if you were to invest it in something, a few years later it’ll be worth more.

Sound easy enough?

— Ali Abdaal (@AliAbdaal) June 23, 2023

There are a lot of ways you can invest your money, through things like:

1. Crypto 💰

2. Real estate 🏡

3. Hedge funds 🦔

But for this thread, I’m going to focus on stocks & shares since they’re the easiest investments for most people.

— Ali Abdaal (@AliAbdaal) June 23, 2023

2 - Why & How to invest in Stocks & Shares. 📈

The way stocks & shares work is you buy a % of a company.

A stock like Apple is publicly traded, so you can invest money into it & hold a small % of it.

So when Apple becomes more successful, your stock goes up + is worth more.

— Ali Abdaal (@AliAbdaal) June 23, 2023

So you’re probably wondering which stock you should invest in.

Well, I agree with Warren Buffet's take on this:

Instead of trying to pick which stocks are going to go up (Which is very hard)

You can invest in something called an index fund. pic.twitter.com/9K2yE6WPlf

— Ali Abdaal (@AliAbdaal) June 23, 2023

An index fund is a large group of stocks that generally increases over time.

The most popular one in the United States is called the S&P 500, which is a group of the 500 biggest companies in the US. 💼

This index fund generally increases by 7% every year.

— Ali Abdaal (@AliAbdaal) June 23, 2023

To invest in these index funds, you have to go through a middleman (Aka a Broker).

There are a lot of platforms you can use, but these are my favourites:

1. Vanguard

2. Trading 212

3. Charles Stanley Correct

— Ali Abdaal (@AliAbdaal) June 23, 2023

3. Common Questions & Concerns. 🤨

The main concern people have is: What if I invest my money & lose it all?

If you invested in the S&P 500 before a stock market crash:

Keep the money in the index fund, eventually it’s going to go back up & you won’t lose any of it.

— Ali Abdaal (@AliAbdaal) June 23, 2023

4. Fastlane Investing (The alternative approach). 🏎️

Now you’re probably thinking “I don’t want to make money when I’m 70, I want to make it in the next 10 years”.

Trust me, I hear you.

The alternative approach you can take comes from the book The Millionnaire Fastlane.

— Ali Abdaal (@AliAbdaal) June 23, 2023

Instead of investing in someone else’s business like through Apple or Tesla...

You instead invest in yourself & your own business.

Invest in your ability to make money, through skills or education that give you the ability to earn more.

— Ali Abdaal (@AliAbdaal) June 23, 2023

Or, you can invest in building & growing a business.

This can be starting a:

1. YouTube channel

2. Marketing Agency

3. Web development company

& making money through that business.

— Ali Abdaal (@AliAbdaal) June 23, 2023

Or, you can invest in building & growing a business.

This can be starting a:

1. YouTube channel

2. Marketing Agency

3. Web development company

& making money through that business.

— Ali Abdaal (@AliAbdaal) June 23, 2023

I hope you’ve gained at least a little bit of clarity from this…

To summarise it all:

1. Invest in stocks

2. Invest in an index fund (S&P 500)

3. Invest in yourself & start your own business

— Ali Abdaal (@AliAbdaal) June 23, 2023