Investing 101 - Clear Your Fear of Investing - Personal Finance Series | Stocks | IPOs | Market Cap | BrainyMoney And Son Han, CFA,CPA | Skillshare

Investing 101 - Clear Your Fear of Investing - Personal Finance Series | Stocks | IPOs | Market Cap

BrainyMoney And Son Han, CFA,CPA, Personal Finance Made Easy!

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12 Lessons (12m)
    • 1. Intro to Investing 101

      1:41
    • 2. 02 What is a stock

      0:34
    • 3. 03 How do you make money when you buy a stock

      0:42
    • 4. 04 What is the stock market

      0:35
    • 5. 05 What is a broker

      0:37
    • 6. 06 Differences between public and private companies

      0:35
    • 7. 07 How do you buy a stock

      0:37
    • 8. 08 Biggest risk when investing

      0:55
    • 9. 09 How to avoid the biggest risk when investing

      0:54
    • 10. 11 Index and Index Funds

      3:26
    • 11. 12 Where to start investing

      0:38
    • 12. 13 How much to invest

      0:30
15 students are watching this class

About This Class

In this quick introductory video, you'll learn the basics of the stock market to demystify a kind of scary subject. 

We break down the stock market into bite sized pieces and show you how to start investing with $10/month. 

We are going to cover the ten most pressing questions:

  1. What is a stock?
  2. How do you make money when you buy a stock?
  3. What is the stock market?
  4. What is a broker?
  5. What’s the difference between a private and a public company?
  6. How do you buy a stock?
  7. What is the biggest risk when investing?
  8. How do you avoid the biggest risk when investing?
  9. Where’s the best place to start investing?
  10. How much should you invest?

At the end of this course, you’ll know how to invest $10 in over 1,000 companies and have the same investment portfolio as me, your teacher Son Han. I’m a Chartered Financial Analyst and a Certified Public Accountant and I use the same approach we’re covering in my entire portfolio. Let’s get started!

The information contained in this class is not intended to and does not provide legal, tax, or investment advice. It is provided for informational and educational use only. Please consult a qualified professional for consideration of your specific situation.

Transcripts

1. Intro to Investing 101: We created a class that will de mystify the stock market and investing. We've heard from hundreds of students and thousands of people that they are too scared to invest today. We're going to break down that barrier in less than 20 minutes. At the end of this course, you'll feel comfortable enough to invest $10 into over 1000 companies using our favorite tool, called betterment or your for a one K. One disclaimer is that we will never recommend buying one stock. We will always recommend the warm buffet approach of buying over 500 stocks at once, creating what we call a diversified portfolio. We are going to cover the 10 most pressing questions. One. What is a stock to? How do you make money when you buy a stock? Three. What is the stock market for? What is a broker? Five. What's the difference between a private and a public company? Six. How do you buy a stock? Seven. What is the biggest risk when investing? A. How do you avoid the biggest risk when investing? Nine. Where's the best place to start investing? And 10. How much should you invest at the end of this course, you'll know how to invest $10 in over 1000 companies and have the same investment for polio as your teacher son Hot. I'm a chartered financial analyst and a certified public accountant, and I use the same approach. We're covering my entire portfolio. Let's get started. 2. 02 What is a stock: So what is a stock? A stock represents a small percentage of ownership in a company. It gives you certain rights, but the one we are most concerned about is that it gives you the rights to profits in the company. So when a company makes money, you should as wealth. And you probably heard the term bond. A bond is buying debt of the companies you get. Fixed interest payments for Loney and company money and bonds are usually considered less risky than stocks because of that fixed interest payments that you receive. 3. 03 How do you make money when you buy a stock: So how do you make money when you buy a soft, you can make money on a stock in two ways. One way is that the price of that stock goes up and you sell that stock for profit or to the company pays A dividend dividend is a share of the company's profits for the year. We talk about why stocks move in price in our follow up class investing 102 But the main just is that stock prices move because of supply and demand for that stock. What you want to do is by hundreds of stocks and see the overall price go up over the course of 10 to 15 years, depending on when you plan to retire. 4. 04 What is the stock market: What is the stock market? The stock market is a collection of what we call exchanges, where stocks are bought and sold. There are hundreds of stock exchanges across the world, but we'll focus on the United States. Pretty much every developed country has a stock exchange. All exchanges are electronic, and you can buy and sell stocks over the Internet through a broker. The two main major stock exchanges in the United States are the New York Stock Exchange and NASDAQ. Now you know the main stock exchanges in the United States. We will talk about what I broker is next. 5. 05 What is a broker: What is a broker? A broker is a company that facilitates buying and selling of stocks. You've heard of them? Companies like E Trade, TD Ameritrade, Betterment and Vanguard are all brokers. Tobias, sell the stock. You create an online account with one of these companies and then place an order with them . The broker will fulfill the order and then you will have your first stuff. Each broker charges different commissions to fulfill your order. So you want to make sure you understand how much it costs. Thea. Other thing to consider is how much you will need in a minimum deposit with the broker will talk about this more in the last section where we teach you how to actually invest. 6. 06 Differences between public and private companies: What's the difference between private and public companies? Both private and public companies have shares or examples. Brady money is a company that has shares, but they are not on a publication, so in a private company you cannot buy shares. Rating. Public companies have shares that are traded on many of the exchanges. Think about companies like Facebook and Apple if the company is a public company that anyone can buy or sell their shares. They're also regulations around these companies, like reporting financial statements and having public monitors. That is the difference between public and private couple. 7. 07 How do you buy a stock: How do you buy a stock? Well, first, it's all through the Internet. And as we said earlier, you must use a broker toe fire. Tell a stock for an account on one of their websites. Let's say you choose E trick, then look up the public company and buy a share of their stuff. You'll find a company using their tickers. For example, Ticker symbol is G 00 G. L. Into this traded on the NASDAQ exchange in the United States, many of you probably already owned shares of companies your employers for one cake, which we will cover shortly. 8. 08 Biggest risk when investing: What is the biggest risk in investing when talking to my sister in my students, they're worried about the risk of investing rightfully so. So I'm going to tell you the biggest biggest risk when investing and that you will tell you a little boy with every fiber in your body is putting all their money in one company Century city, all of your eggs in one basket. Many people will think that they are really smart and put all of their money in one company . That's a terrible idea and creates a lot of risk to recount. Investing all of your money in one company or even five days that the biggest risk you can take you are in an average investment. And so on my way. We're not privy to a significant amount of information, and that's OK. If you put all of your eggs in one basket, you are now gambling and not investing. So how do you avoid this risk? We're going to cover that in the next section 9. 09 How to avoid the biggest risk when investing: How do you avoid the biggest risk in investing? You avoid the biggest risk of investing by investing in at least 500 companies. Thing sounds complicated, but it is not. Companies like Betterment or your employer's 41 K allow you to invest $10 in 500 companies by using a thing called Index with an index fund you only a fraction of a share of absolute by investing in over 500 companies using an index fund, we create a diversified portfolio and move away from unsystematic risk, which is the unique risk of a single company will cover index. And in Declan's in the next section, Warren Buffett is the greatest investor of all time and recommends this approach for almost every investor. His approach is the same approach I take as a season's demands professional and likely the best for you. 10. 11 Index and Index Funds: index and index funds. First, let's cover one in indexes. An index is just a calculation. It's not a company or an entity. However, you can buy an index directly through a financial instrument called an index fund. Let's cover the most popular index, called the S and P five. There are other indices like the Dow Jones and NASDAQ composite, but we'll cover the S and P 500 today. It is one of the most commonly followed equity indices and many considered one of the best representations of the U. S. Stock market and a bellwether for the U. S economy. It uses the largest 500 companies based on their market capitalizations. Market capitalization is the amount it would cost you to buy 100% of the outstanding shares of the company. So the larger the market capitalisation mawr impact. The company has a meanness and P 500. For example, as of August 2018 Apple made up 4% of the S and P 500 index. Microsoft's 3% Amazon, 3% Facebook, 2%. In Berkshire Hathaway, which is warm. Clough, it's company, 2%. There are 495 other companies in this index that account for the remaining 86% of the S and P 500 index. So now you know what it index is. And specifically you know about the S and P 500 index. So how do you buy the index directly? Little financial instruments created by Wall Street, called an index fund. An index fund is a mutual fund with the portfolio constructed to match the exact contents of the index it is tracking. Put another way, an index fund is a thing you buy toe on a very small percentage of the S and P 500. It gives you ownership in over 500 companies and very low operating expenses. So why does the best investor of all time Warren Buffett recommend the S and P 500 to it? Average investors like me and you because it gives us a diversified portfolio, broad market exposure, incredibly low fees, and our returns will be most hedge fund. Warm buffet actually bet against hedge fund managers to beat his S and P 500 portfolio on December 19 2007. He gave them 10 years to beat the S and P five point and guess what happened. Buffett won the bet, and it wasn't even close. The S and P 500 returned 8.5% each year and the hedge funds earned between 0.3% in 6.5% each year. It wasn't even close. Warm Buffet was so sure that the S and P 500 index fund would outperform these high fee managers that he bet $1 million. And since he's also a great guy, he took the $1 million that he earned off this bet and gave it to a non profit called Girls Incorporated, which provides after school care and summer programs to girls. Let's end this section with a verbatim quote from Warren Buffett on his advice. My advice couldn't be more so. 10% of the cash in short term government bonds and 90% in a very low cost S and P 500 index . I suggest Vanguard's I believe the trust's long term results from this policy will be superior to those attained by most investors. Whether pension funds institution for individuals who employ 11. 12 Where to start investing: where's the best place to start investing? Because I lived in the United States. I can only recommend what works here. If you have a 41 K at work, start investing through your 41 K and look for something that is similar to the S and P five. If you don't have a 41 K and I would start by using better because it allows you to invest a small amount like $10 a month in the S and P 500 index. They put your investment in the S and P 500 government bonds pretty much following the Warren Buffett approach. And they do it for very very. I personally use betterment and receive no compensation for recommending better than I only recommend them because I believe in there. 12. 13 How much to invest: How much should you invest? I would start with around $10 a month. This is not a lot of money to most people and will allow you to see how the investing engine. Over time, you'll feel more comfortable. And as you learn more about personal finance and investing, you should increase how much you invest each month. That's it way. Hope you enjoy this quick introductory course. If you wanna dive deep, burn in its watch, investing 102 vibrating. If you have any questions, post them below until next time, stay home.