An Intro to Personal Finance For Beginners | David Eaves | Skillshare

An Intro to Personal Finance For Beginners

David Eaves, YouTube, Trading/ Investing, etc.

An Intro to Personal Finance For Beginners

David Eaves, YouTube, Trading/ Investing, etc.

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11 Lessons (32m)
    • 1. Intro

      1:13
    • 2. Saving and Emergency Funds

      3:28
    • 3. Credit Scores

      8:34
    • 4. Paying Off Debt

      2:25
    • 5. Funding Retirement Part 1

      3:17
    • 6. Funding Retirement Part 2

      2:26
    • 7. Investing

      4:25
    • 8. Paying Off Your Mortgage

      2:39
    • 9. Saving For College

      2:08
    • 10. Class Project

      0:32
    • 11. Thank You

      0:37
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About This Class

Personal finance is one of the most important things someone can learn. Without it, you could end up like the doctors and football players who do very well but still end up in trouble. In this course we will be going over the ideas of:

- emergency funds

- credit

- debt

- funding retirement - investing

- mortgages

- college expenses

- and more 

Meet Your Teacher

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David Eaves

YouTube, Trading/ Investing, etc.

Teacher

I've been creating content on YouTube for around 5 years now as well as actively investing and trading in the stock market. I've been creating content here on Skillshare for a little over a year as I think it's a great platform for my audience on YouTube to get more in-depth content as well as anyone else who is interested. Unfortunately, you do need a Skillshare Premium account in order to view them. 

 

Do you have Skillshare Premium? 

If you use my link you can get 2 months for FREE after which it's just $8 a month with a yearly subscription. 

 https://www.skillshare.com/r/profile/David-Eaves/3840917

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Transcripts

1. Intro: What's going on, guys, welcome to the intro to personal finance course here on skill share. If you guys don't know who I am, my name is David eaves and I have a YouTube channel and I've been producing content here on skill share for about a year now. And just like on my YouTube channel, most of my courses are generally focused around things like personal finance and investing, saving credit cards, mostly stuff like that. And that's a lot of what we're going to be covering in this course. So hopefully this course will act as a little bit of a blueprint for you guys is personal finance. As I think we've all heard the stories about bankrupt doctors and football players who made hundreds of millions of dollars, yet they still went bankrupt. And personal finance is most of the time the reason for that. So hopefully by the end of this course, you guys have a good idea of how to manage your money on a small time scale. Obviously, I'm going to be creating a mastering personal finance course in the future where we're gonna go into much more detail. But in this course we're just going to be going over the intro and the basics, which is plenty to keep the average person from not making a lot of mistakes. So with all that being said, I'm not gonna take too much more of you guys as time up here in the intro video. So I will catch you guys in lesson number one. 2. Saving and Emergency Funds: R, Yes. So we're going to be starting off the course with lesson number one, which is arguably going to be one of the most important lessons here. And that is living below your means and saving money. Pretty much everyone tells you all save money, save money, you gotta save money. Obviously that's the case, but a lot of people don't realize just how important that is. Sure on a big scale, say we want these very important. You're not going to achieve any great financial success, not saving any money. But one of the first things is say you're in debt, say, no matter what your situation is, one of the first things you need to do is save an emergency fund. Now it's going to change based on your situation, but I would say three to six months. Your expenses, meaning if you were laid off tomorrow and didn't make a single dollar for the next three to six months, you'd have enough money to not get kicked out of your place. You'd have enough money to pay your electricity bill and all those types of things. Because that gives you some time to actually whether what is essentially a storm in that situation. That way you don't have to go into debt because things like that costs a lot of money. And having that emergency fund saves you a lot of money. I mean, think about payday loans. I don't know the exact rights on those, but once I pay loans are pretty predatory and they cost a lot of money to get. If you have an emergency fund than a little bit of savings, you pretty much never are going to have to go into any kind of debt short term for any kinda, you know, your dryer breaks down next month. You're not going to go into any dead and cost yourself any additional money. So having an emergency fund not only saves you money and a lot of cases, but he's also going to give you a lot of peace of mind and the fact that if your dryer breaks down next week, it's okay. It's not the end of the world. If your cars in the shop for two days and you gotta get a $1000 worth of repairs. It's not the absolute end of the world, you know? So that's really what it comes down to is that having an emergency fund is going to give you a ton of peace of mind and likely save you money when it comes down to short-term debt. And these savings are really going to be the building block for your future in which you're going to actually going to be saving far more and we'll talk about that later on in the course. But your first emergency fund of three to six months is really going to be very crucial. One of the most important things you could do, and pretty much anyone should be able to do that no matter what your situation is. Obviously, you might not be able to do it right this second, maybe your dryer actually broke down three days ago or your car is currently in the shop, you might not be able to do it right this second, but within the next two to three months should be able to start saving three to six months of your expenses. And that means not spending money on Starbucks. Starbucks is crazy expensive. You can make it at home for $0.20 McDonalds, even a cheat meal at McDonald's, it's like $5. You can eat a home for like two or $3, like eggs, bread and stuff like that. Easy things like that are gonna save you a lot of money. Cutting your AC up a little bit, cutting your heat down a little bit, cutting off all the lights in your house, making sure your doors are shut, switching out light bulbs that might use 60 to 80 watts, four light bulbs and do the exact same job that use six watts. Stuff like that is gonna save you a lot of money. And that's how you're gonna essentially get to the point in which you can build your emergency fund. So that's pretty much all I wanted to highlight in this video is that it's very important to save money in general and short-term. The first thing you're going to want to do if you have not done it already, is saved three to six months of your emergency fund. So I want you guys to actually write down each lesson. I want you to kind of take away the highlight, write it down in a list because this course is set up in order that is gonna be kinda most important. Obviously, people like Dave Ramsey have their own order of things, but, you know, I'm not Dave Ramsey. I've a little bit of a different perspective on things, but regardless of that, I do want you to write down everything in order and that's going to be the order in which you're likely going to want to do these things. So with all that being said, I will catch you guys in the next lesson. 3. Credit Scores: Ok guys, so in this lesson we're going to be talking about credit scores. So he has don't know, credit scores is essentially a score made up from your public record of dealing with debt. So whether it's a house loan or a credit card, car loan, any of those types of things are all recorded in a public file with one of the credit bureaus. We're pretty much all three credit bureaus for the most part. And they create a score from all of this data that essentially tells lenders just how risky of a customer you are. So credit scores go usually from around 450 or so all the way up to 800 being a perfect credit score, 450 being absolutely terrible. So there are three main credit bureaus being Equifax, TransUnion, and Experian. Some lenders use different credit bureaus depending on what it is that they are actually looking at. Some lenders will actually look at one or two. Some lenders will look at all three. But these are the three main credit bureaus that you're going to be worried about. And when it comes down to their actual ranking of data, most of them are pretty much the same and the factors they use to spit out this credit score or payment history, derogatory marks, credit card utilization, credit age, total accounts, and hard inquiries. So the most important thing is going to be your payment history. So when it comes to payment histories, you're gonna want to have 99 plus percent on time payments, ideally 100%. So essentially you never miss a payment that's going to help build your credit quite a bit. And that's generally going to be one of the most important things. Next up is credit card utilization. So this is basically how much of your credit that is extended to you are you using. So, so if you have two credit cards and each of them have a $1000 line, that means you have $10 thousand worth of total credit extended to you. Ideally, you want to be using less than 10% of this, so $1000 or at worst 30%. But if you start going above 30%, you're actually going to be towards, you know, a spot where it's actually going to hurt you. But if you're using less than 10%, you're gonna be in a good spot. That's really the ideal range when it comes to credit card utilization. And the reason for this is lenders generally look at someone who has $10 thousand worth of credit extended to them and they say, hey, you know, if this person's using nano, $1000 of this every month, one bad month, and all of a sudden they could be in trouble. Whereas if you have a lot of credit extended to you and you're using only 10%, you have a lot of credit left over to whether any potential storms that may come up in your life, like the dryer breaking down next week or a water leak or a little car repair or something like that, Sheena, those things are gonna be able to be handled by the additional credit. Whereas if you're using 90-95 percent, you probably don't have enough credit leftover to handle any kind of accidents or anything that happens. Next, we've got derogatory marks. This is like collections, tax liens, bankruptcy filings, any kinda stuff like that. And you really want to have absolutely none of these, any of these is not good. One is not the absolute end of the world, but it still hurts your credit a decent amount. And if you have more than one, it's going to hurt your credit a lot. So you don't want to have any of these ideally, and most of this is kind of easy to avoid. Just don't file bankruptcy if you don't have to don't put yourself in a position like that. Pay your taxes, you pay all your bills, and you'll be fine. You're not gonna have any of these marks on your credit. And if you do, you could always dispute them in case they were wrong, because if you do all of that than they probably are wrong. Next up, we've got credit age, this is what we consider to be medium impact. So the last three categories are high impact there very important you want to be grain on pretty much all of those sections. When it comes down to credit age, this isn't something you can fix very quickly and it is a medium impact categories. So if you're 1819 years old. You're not going to be able to have 510 years worth of credit. He just unlikely because you can't usually get credit extended to you unless you are 18 years or older. So between the ages of 18, 23-24, those age groups, it's going to be hard to actually improve this section very quickly. The only way you could have a longer credit history is if your parents puts you on their credit card when you were much younger, that could actually do that and that would establish some credit history for you. But if you didn't already do that, then there's no way to really do this. You just have to kind of wait out the clock. You know, if you were to get a credit card it say 18, you're just gonna have to wait a few years of him build some credit history in order to actually increase at age, but ideally, longer history is better. So one thing you also want to do is if you potentially open up to three credit cards at one time, if you open up a credit card at 18, don't close that card when you're 30 because the all the credit history of the 12 years associated with that card is going to disappear from your report. And now it's not going to weigh down on an index card. So if I have one credit card with six years worth of history on it and then I apply for another one. Now my overall age of my credit has dropped from six years to three years as an average because now I have two cards over the same six-year period. So obviously, if you cancel an old old car, do you know that was from 12-13 years ago? You know your first card, for example, mindless, a Capital One platinum card. If I were to cancel that card, It's actually going to hurt my credit a good amount because that's my first car that has the longest amount of history on it over two to three years. I think that's going to hurt my credit a decent amount if I were to cancel that card. So that's one thing you can do in the future is just don't cancel your old accounts. And canceling old accounts also reduces your overall credit extended to you. So that's actually going to hurt your credit card utilization rate as well. So what I'm essentially setting here is don't cancel old cards, just throw them in a box and by a McDonald's meal on them once a year. And you'll still have the accounts open, you'll still have all the credit associated with them. But if you don't want to use that for whatever reason, you can just throw it in a drawer and use it once a year and you'll be fun. Next up, we've got total accounts. So this is the total amount of credit extended to you between different accounts. So right now I have four accounts extended to me. They are all credit cards. And when it comes to this, you actually want to have more accounts. So you actually ideally 20 plus lines of credit. So it's a little difficult to do this in my opinion. And this is really the one bottleneck that keeps a lot of people from getting the actual perfect 800 credit score is the fact that you pretty much have to have like 20 lines of credit. And that's a little ridiculous in my opinion. You don't need 20 lines of credit. And quite frankly, I would never get 20 lines of credit because it's probably gonna hurt you in some other ways. Have that many things to keep up with. And it's just going to be annoying. And you can get the same rights on things with the 750 plus. So if you have 770, it's pretty much the same as an 800. Opening up the extra accounts is just going to get you a higher score on paper, which doesn't really matter that much. However, I will say you do want to probably have enough 5-6 may maybe as high as ten accounts that would be somewhat reasonable and also help your score out quite a bit because it's definitely not unreasonable to have 567 credit cards and just use two or three of them as you know, to throw in the drawer and buy McDonald's meal every four or five months. I actually do that with about two of my cards and I usually just pay the bill as soon as I make the purchase. So I pretty much use it like a debit card almost, but I get to maintain the credit history and it counts as one of my lines of credit. And then the last section that's going to affect your credit quite a bit is hard inquiries. So hard inquiry is basically every single time you apply for credit you're going to have an inquiry, add it to your file. These are going to stay in your file for two years roughly. So if I were to apply for a new credit card today, it would take two years or June 2022 in order for me to actually get rid of that hard inquiry, ideally, you want to have less than four Hard Inquiries. Three would be better. Obviously less is generally better. I mean, if you had 0, that would be best. But sometimes it's a very low impact section. So a lot of times it's going to be better to sacrifice that section if it helps increase your total accounts and credit card utilization and things like that. But if you had less hard inquiries, that's going to be better. So what I'm really saying here is if you're young, just go ahead and open a bunch of things at once and they'll all kinda go away within two years. You'll just have not the greatest credit in the world for two years. But here's the thing. If you're very young, you probably don't have credit anyway and probably can't use that credit in any way, shape, form, or fashion. So it doesn't really matter, but it will matter in the future. And in this scenario, all of those hard inquiries have disappeared by Tom, It does matter. And you've got the four new accounts or you've got the five new accounts and all the credit extended to you from those accounts. So if you're very young, you probably want to apply for a good amount of credit at once. And then after that, it won't matter a lot. I mean, as long as you're not opening up 345 accounts a year, it's not gonna be that big of an issue. So those are in order of highest importance to lowest importance. And you guys can sign up for a credit monitoring site as well, something like Credit Karma, credit wise. I'm trying to think. I think American Express has their own, pretty much all the credit card companies have their own version. And then credit karmas, obviously pretty famous. I think we've all heard of them. So pretty much any of those I would recommend signing up for. They're all pretty much free, so it's not going to cost you anything to do. And you can check your credit and see the progress that you're making over the next few years as you build your credit along with your emergency fund. So with that being said, be sure to take some notes from this lesson and I will catch you guys in the next lesson. 4. Paying Off Debt: Hi guys. So in this lesson we're going to be talking about paying off debt as well as just staying out of debt. So if you're quite young, you probably just want to stay out of debt. It's a whole lot easier to just stay out of it before going ahead and acquiring it. But if you guys have acquired some dead at this point in your life, then what you're going to want to do in my opinion, this pay down the smallest debt first and kind of use what's called the debt snowball. Dave Ramsey coined and came up with the idea, but I definitely like it. There's kind of two ways to go about it. The debt snowball is essentially paying down the smallest debt first. However, in a lot of cases, the highest interest one is actually going to be the smallest one. And if you're paying off debt, getting rid of accounts and saying, hey, you know, I settled that debt, has settled that debt. I did that. That's going to actually help a whole lot. I'm not going to send the monetary values here, but say you were to have a large debt, a medium debt, and a small debt, it's going to be so much easier and give you a whole lot more peace of mind to be able to get rid of the small 1 first, then the medium, and then sharp chipping away at the large one. In a lot of cases you're smaller debt is probably going to be the higher interest one. I mean, if you have mortgage debt, for example, that's prolly gonna be three, maybe 4%. So, you know, that's not a lot. Whereas if you have credit card debt, that's gonna be 15-20 percent. Credit card debt is likely to be one of the smaller ones in comparison to a mortgage. I certainly hope it is if you were in that situation, otherwise, you are in trouble. So you can kind of choose which one you want to go about it if you want to save a little bit of money and just tackle the highest centrist 1 first. You could certainly do that. I think it gives a lot of peace of mind to tackle the smallest to largest. And it's not gonna be a big difference which way you do it, whether you do it highest interests, right first or smallest debt first. However, there also is a little bit of a difference here. I would actually go through some of the other steps in this process before I would tackle your mortgage, for example, the mortgage is actually closer to one of the last things in the course we're going to talk about. So side from mortgage debt will actually kind of exclude that from this scenario, but everything else, if you have student loans or your largest Assad from your mortgage, you know, I'd go ahead and get rid of those in this step. So the lesson to take away from this is that you ideally wanna kinda tackle all of your debt aside from a mortgage here. And then in the next video we're going to be talking about what you're going to want to be doing after this step. So be sure to write this down in your notes as kind of a third or fourth step. I don't know which video we're on, to be honest, but the course is set up completely in order. So just write this down right below your notes from the credit score video. And with that being said, I'll see you guys in the next lesson. 5. Funding Retirement Part 1: Are you guys in this lesson we're going to be talking about funding retirement. So a lot of people, it's actually terrible nowadays, but so many people, especially in America, don't actually have a retirement. They, they pretty much have nothing set aside. I want to say I read a report that almost everyone up to the age of 50, I think 17% have enough money to last a one-year of retirements. So it's pretty clear that almost nobody's actually saving for retirement. And this is going to be a big problem for a lot of people. However, it doesn't have to be a problem for you. So there's a lot of ways to go about saving for retirement and it's going to depend on your age. We're gonna talk about account types and the type of investments that you can make in part two of this lesson. But for this part I want to talk about the method of saving. So in my opinion, if you're young, if you're 2324 years old with compound interest in, in say the stock market for example, you can actually make a 50 to a $100 thousand investment in your early twenties to late twenties. And that's all you have to do. So I mean, you can sacrifice 2-3 years and you're retirements taken care of. So if I were to put a large lump sum into a retirement account right now, I would never have to worry about retirement when I'm 40, I'm good when I'm 50, I'm good when I'm 60, I'm good. I never have to worry about retirement. And I think this is a great strategy if you're an entrepreneur or working a job in which you're not going to get a 401 K, This is a great option because you can just throw up a lump sum in there and you're all good, you don't have to worry about it. Whereas if you do have a 401K, I would highly recommend funding that first before you do anything else. But if you do have a 401K, a lot of people say 15% a year. So you just want to say 15% of your net income and put it towards retirement, part of that's going to go into your 401K. And if you're doing very well than 15%, probably gonna be more than you can put into your 401K. You can open up a Roth IRA, which we will also talk about in the next lesson and the advantages and different account types. But point being, a lot of people say You should say 15% and put it towards retiring. I think that's pretty good advice. So that's what I'm going to recommend here. I, of course, I'm an entrepreneur, so I don't exactly do that. I actually already have a lump-sum put into an account. I'm not completely good, but I'm also fairly young, so, you know, I've got a few more years to add to that and get it to the point in which I will be good. So that's all I want to cover in this video is the fact that you do need to think about saving for retirement. This is going to be very important, something that so many people don't do. And the time to think about it is now because the earlier you start, the easier it is. And you can do 15% for 1015 years and you'll probably be okay. You might need to do 25% all the way to the time in which you retire, just to get to the same rate as that person who did it for ten years starting at 25 and only saved 15%. And that's because of compound interest. So the autonomy to start saving for retirement is probably now, especially if you're anything over 25, I would highly recommend you go ahead and start right now. If you're under 25, you're going to have to kind of play it by ear and look at your individual situation, what it is you want to do. You probably don't have your whole life figured out yet. So, you know, if you are in a position to do it, I would definitely do it. But if you're not, you can definitely delay it a little bit to your 2526, somewhere around that age range. But I do want to put in this video lesson on retirement because it's very important. One of the most important things that it seems like almost nobody worries about nowadays. So with that being said, I'll catch you guys in part two of this video where we're gonna be talking about account types. 6. Funding Retirement Part 2 : I guess so in this lesson we're gonna be talking about account types for retirement. Starting off with number one, we have the 401K. So what this essentially is is an account offered usually by an employer. And what they're essentially going to say is, hey, if you contribute a certain amount every single year to this account, we will actually match it. So they're essentially giving you part of your retirement if you do it right. However, they only will do it up to a certain amount. Usually, it's not that much. A few thousand a year, 5-6 sometimes, but at the end of the day it's not a TEN spot. It is essentially free. So I would definitely fun to this first, this is going to be the number one thing. Definitely do this first. Now, if you don't have the option of getting a 401K, say you are a entrepreneur or you're self employed in pretty much any way, you're not going to be able to get a 401K. So what you're gonna wanna do is get a Roth IRA or an IRA, or a Roth IRA is something where you actually pay taxes on your earnings. You put them into the account. You can only put a certain amount every year. I want to say you can only put about 6 thousand a year into the account. However, what you put in, you put in, you pay taxes on it. But after it grows. So if this 6 thousand turned into ten, by the time you retire, you don't have to pay taxes, only 4 thousand difference. So that's what a Roth IRA is. Essentially, you're probably going to want to work with an advisor if you guys do any of this and they'll explain a lot of this, but I'm going to put the highlights in here. So, but an IRA is actually an account where you can actually deduct the amount that you put into the account up to, I believe the same amount as the Roth IRA. I think it's around 6 thousand a year. You can deduct that from your taxes. However, when you actually withdraw it in retirement, you do have to pay taxes on the whole sum. So there's a lot of arguments as to which one's better. It just kinda depends. I don't really think there's an exact answer as to which one's better personally, I have a Roth, but that was my situation. You're going to have to work with your own financial advisor and figure out what's gonna work best for your situation. But these are great accounts that you guys can utilize for retirement. So honestly, I would just highly recommend working with a financial advisor the same way you would a lawyer or a CPA, any of those things, just go grab a financial advisor. They're not that expensive. They're gonna be able to tell you a lot of specifics and things that apply to your individual situation because which option is the best comes down to your situation in most cases. So there is no right or wrong answer, but I do want to make you guys aware of these options that way you guys can go ahead and do this. So in your notes, just highlight the three types of accounts, the 401K, the Roth IRA and the IRA. And with all that being said, I'll get you guys in the next lesson, base. 7. Investing : Our guys. So in this lesson we're gonna be talking about investing because this is going to be the primary way in which you succeed when it comes to personal finance and get rid of a lot of the worries in your life. Now, obviously, we've all heard of investing in real estate and stock market. Those two are the most common things you'll ever hear. And realistically those are what I'm going to recommend that being said Before we get into those two topics, I would like to cover the idea of doing more of a private investment. And what I mean by that is like starting your own business. So generally in the stock market, the average return of the S and P 500 over the last 30-40 years has been around 10%. And then in real estate, you know, it's going to depend on every single thing, but It's not uncommon for people to see between 8, 15% returns when it comes to real estate. That's kinda what I've seen from my personal experience when it comes to everybody that I know that does. Both of these things as well as my own personal experience in the stock market. However, I know plenty of people who have done far better when it comes to starting their own business. So if you guys are interested in doing something like that, I would actually recommend you go ahead and do that first because you can actually in a lot of time to see much better results when it comes to your own business, rather than you will just being a silent investor and a public company, for example, or just buying some property down the street. A lot of times you're going to see a much better return. If we take Dave Ramsey, for example, he actually had someone call into a show when Tom and they owned a pharmacy and he was asking him what he thought he should invest in, since the pharmacy was doing very well, he was talking about investing in real estate or whether he should did the stock market or whatever it may be in due to the amount he was referring to. Dave kinda advised him to do three things. One, there's no reason you can't start a second pharmacy. I'm in the pharmacy was doing fantastic. So you could certainly start a second pharmacy and have much higher returns. And he's going to see in real estate and stock market and then take me no part of those resources and put them into real estate in the stock market. So in that case, I like to agree with Dave's advice a lot that starting a second pharmacy was a great idea for this guy. So if you guys already have or are thinking about starting your own business and some kind of way, then a lot of times that's actually going to turn out to be a much better investment than throwing something in the stock market or into residential property or something. Now if you guys don't have any kind of ambition when it comes to anything like that. And you like whatever your day job is and you don't want to have your own business, you just looking for a place to invest than real estate and stocks are definitely going to be the way you're gonna wanna go. In fact, if you, if you really want to keep it very simple, stock market is going to be the best place to go. Real estate can be a little bit more complicated and have much more risk associated with it if you are not kind of invested the idea of doing it. So I'm not gonna go into specifics on these two things, but I do wanna say that real estate is a good example. If that's something you want to do, you could probably perform a little better than you will in the stock market. But that's similar to the small business idea. You know, if you don't have an interest in that, then it's probably still not going to be the best thing for you at that point. You're probably just going to want to go ahead to the stock market. I mean, it's the most cliche place, but at the end of the day, it is the most easy investments you can make. All you do is open a brokerage and just buy some stocks. That's pretty much all you gotta do is very simple, very easy. And generally, when it comes to passive investing like this, I generally recommend grabbing three index funds and just slowly build into those investments over time. Now when it comes to these index funds, I would highly recommend just in standard S and P 500 index fund as number one, I personally have a mega cap which encompasses pretty much everything only market as at my other fund. And then I personally have an S and P 500 low volatility index font. I know a lot of people would actually more so recommend an Emerging Markets Fund. I am not going to say that's a bad idea. Part of the reason I have the low volatility fund right now is just the fact that it's trading at such a lower multiple that right now and it's a great investment, but I may actually switch into an emergent market fund in the future, but that's kinda what I'm gonna do and it's very simple. And you just throw some stuff in there every single month passively. And you take advantage of compound interest over the years. And it works out very well. So that's pretty much all I've gotten this investing video, but I do really want to highlight the fact that it is very important to invest. So just make sure don't, don't think you're not going to need to invest. Go by car instead of investing if you don't need it. Don't waste money on stupid things if you haven't done investing yet. Because the earlier you invest, the more compound interests you can take advantage of over time. And that has generally worked out very well for even average people over the last 30-40 years. So with all that being said, thank you guys for checking out this lesson and I'll catch you guys in the next one. 8. Paying Off Your Mortgage: So in this lesson we're gonna be talking about paying off mortgages. So generally I'm going to be talking about your own personal mortgage. If you do have a mortgage on a rental property or something like that, that's really going to be up to you. I'm not gonna make any recommendations of that because it's I can't really give blanket advice for any kind of individual investment. But when it comes down to your personal residence, obviously a lot of people have this idea that, hey, why would I pay off this 3% mortgage when I could take that and invested here and make 10% on net 7% by doing so, there's two reasons I don't really recommend doing that. One, your 3% mortgage is guaranteed. The variants on that is pretty much 0. It's always going to be there. That payment is due every single month. Whereas when it comes down to your 10% return in the market or something like that, that's not guaranteed. It's not consistent. Obviously, over a 3040 year period, it's very likely, but it's certainly not guaranteed and it's very much so not guaranteed over the short term. I want to say the variance on the S and P 500 returns are like 15. So very large variants there. You could actually wind up losing some years. You could be up huge and other years, but at the end of the day it's, it's got much higher of a variance and standard deviation than what your mortgage is gonna have at, right at 0. So I think it makes a whole lot of sense to not do that, especially when it comes down to your personal house that you live in and that you need to have as a roof over your head. And I also think just having that roof over your head pay for and you don't have to do anything. And, you know, it's yours, provides a lot of security, a lot of peace of mind, especially when it comes down to your emotions which are likely to affect your investing practices whenever you hit a bumpy road. So I would highly recommend paying off your house at this point very quickly, as fast as you can. Obviously, it would still do a little investing, but I would definitely focus on paying off your house at this point. You can always invest afterwards. Dave Ramsey says pay off your house entirely before you start investing. I don't necessarily agree with that, but at the same time, I definitely wouldn't take every single discretionary Penny and throw it at a investment when you could be throwing some of that at your house and getting that paid off ahead of time. So I would definitely kind of 50-50 split it, maybe focus a little bit more on the house and the short-term. Get rid of that, get the peace of mind, get the security. And once you have that, then you can focus way more on, on your investments. And now you also have the cost of that every single month. So you're gonna be able to focus on your investments even more. The actual cost difference isn't that big, and it's gonna give you a lot of peace of mind and ideally keep you from making a lot of emotional decisions when it comes down to any bumpy roads in the future. So that's what I would recommend doing, but at the end of the day it is up to you. So with that being said, I'll catch you guys in the next lesson. 9. Saving For College: Yeah, so in this lesson we're gonna be talking about saving for college funds. Generally, this step in the course, I'm going to be referring more so to children's college funds. That being said, you could kinda do this much earlier if you're planning on going back to school when you're 30, then you might want to put this much earlier in the course. But generally speaking, I'm going to put this towards the end. One of the last things you wanna do, right before focusing entirely on investing. So when it comes down to saving for college or any other education expense, there's two ways to do this. Both of them, I believe fall out of the fog 29 Plan, which is essentially the same thing as a Roth IRA or any of those, but it's more so for school, it's a tax advantage accounts. And the first plan is prepaying tuition at a qualified university. So you're essentially just prepaying, getting, locking it in at the current rates or which you can also do is put it into an account, let it grow tax-free. And I believe the actual qualified deductions are tax-free as well. So now I can't be entirely sure on this and you're probably going to want to talk to a financial advisor when it comes down to opening one of these accounts because they're going to tell you which one's going to be the best way, depending on what university you go to, what university you're planning on going to or your kids are planning on going to. They're going to be able to look at a lot of a specific data on that university and figured out, hey, do you want to prepay this or do you want to save money in advance? Tax free? They're gonna be able to tell you which one's the best way to go. Generally, if a school's tuition is increasing very, very fast, it actually might be a better idea to just prepare it in the first scenario. But if the cost is, is fairly flat or going up by a little bit, right, with the amount of inflation or something, then the account where you actually just put the money in there and let it grow in the market, tax free is probably going to be a much better way to go. So that's what I'm going to say here. I would highly recommend looking into these funds more and looking into your specific institution and figuring out what's the best case going to be. Obviously, if you don't know what the institution is going to be, then going with option number 1's not really going to be practical, but that's what I would do. Look into the research and figure out which plan is going to work best for you. So with that being said, because you guys in the class project video. 10. Class Project: Our guest, so we're getting pretty close to the end of the course. I highly recommend that you stay for the next lesson. But what I want to say here is that the class project is just a handout that's going to be linked in the resource section. If you guys took notes during the entire course, Like I've been saying, then you should be completely fine. It should be 34 minutes to do. And whenever you're submitting that, you can also write down any kind of questions you might have on that handout as well. And I will try to get back to you guys and answer them. I try to answer pretty much every discussion on any of my courses. So with that being said, check it out in the classroom resources section and I'll catch you guys in the wrapping up video. 11. Thank You: I got so we are now at the end of the course. I want to thank you guys for checking out this course. I hope it was very helpful for you guys. If you guys have any questions at all, feel free to leave them in the discussion part, I tried to reach out to pretty much everyone who leaves any kinda comments anywhere. That way I can provide continued support for you guys. And I can even answer some more specific situation questions where the answer isn't exactly obvious or blanket advice doesn't cover it. You know, you need a specific answer. I can give you guys some advice on that as well. So with that being said, thank you guys for checking out the course. Feel free to check out any of the other courses. I have your own skill share. And with that being said, I will catch you guys next time. Base.