Investing for Beginners Part 2 | Growth, Humility, and Compound Interest | Rob Armbruster | Skillshare

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Investing for Beginners Part 2 | Growth, Humility, and Compound Interest

teacher avatar Rob Armbruster, Investing and Personal Finance

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Taught by industry leaders & working professionals
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Watch this class and thousands more

Get unlimited access to every class
Taught by industry leaders & working professionals
Topics include illustration, design, photography, and more

Lessons in This Class

10 Lessons (47m)
    • 1. Introduction

    • 2. The Power of Compound Interest

    • 3. 401k vs IRA vs Brokerage Account

    • 4. Why Prices Change

    • 5. Finding the Right Opportunities

    • 6. Where to Find Good Info

    • 7. Stocks vs ETFs

    • 8. Getting It Right Even When You Get it Wrong

    • 9. Making a Long-Term Goal

    • 10. Next Steps

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About This Class

This class is a deep dive into the basic fundamentals of investing. It will teach you how to achieve long-term growth by harnessing the power of compounding interest. You may have heard of my class "Investing for Beginners." This class is a sequel to that class and will give you a full perspective of the whys, and hows of investing. I'll cover the following topics:

- Compound interest

- 401k vs Roth IRA vs Brokerage Accounts

- What to do after you get an investment wrong

- Where to find the best investing information

- How to make a long-term goal

Class Resources:

Robin Hood


Yahoo Finance

Buying and Selling for Beginners (Another Rob Class)


This lesson is not considered licensed financial advice. It is purely for educational purposes to help you to manage your own investments. Future trades that you make are done at your discretion.

Meet Your Teacher

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Rob Armbruster

Investing and Personal Finance


When I was 24 years old I was sitting in an office with a financial advisor. After he showed me the fees associated with him investing my money, I left the meeting feeling uncomfortable with his proposition. This is how my investing journey started. I began to research how to successfully manage my own investments and found that it was easier than I thought. Today, I'd like to pass on what I have learned over the past seven years of managing my finances to you. 

I have a passion to help people from every race, ethnicity, and background discover their ability to make great wealth! My classes provide the basic fundamentals of making great long-term financial decisions. Please follow this page so that you won't miss any of the great resources coming out in the future!

... See full profile

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1. Introduction: Hello and welcome to investing for beginners part two. My name is Rob our Brewster and I created this class to give you a deeper dive into the basic fundamentals of personal investing. You may have seen my first-class, which is called Investing For Beginners, part one. I created this class because there was more to say and more to give you about being successful long-term investing. In this class, we'll be covering the power of compound interest, what brokerage account to get when you're just starting out, I'll be teaching you why investment prices change and how to find the right opportunities I'm gonna go over. This is one of my favorite lessons, where to find the best information investing. Then I'll show you how to get it right. Even when you get it wrong, everybody makes mistakes investing, but it's how you choose to handle those mistakes which separates you from the pack. And then I'll wrap it up by talking about making money long-term and setting that long-term goal for your investments. 2. The Power of Compound Interest: In this first lesson, I'm going to show you the incredible power of compounding interest. Now, compounding interest is really the reason why investing is a worth it in and of itself. So make sure to tune in for this whole lesson. Because it's important to know why you're doing what you're doing as you're investing. Compounding interest basically means interest earned on interest. For example, say you invest $1 a year from the time that you invest $1, that $1 turns into $1.10, you keep that $1.10 in your account. And the next year, the $1.10 doesn't turn into a $1.20. It actually turns into $1.21. And that's because you've earned interest on the interest that you've earned. So I'm about to take you into an investment calculator that will show you a bunch of different scenarios for how you can use compounding interest to your advantage. So here we're going to look at this investment calculator over here. I'm going to take us through a few different scenarios here for what your investments Look in the different amounts of years that you choose to invest for. So the starting amount I'll put for each of the scenarios is $0. Say you invest for ten years and you put $500 a month into your investment account. And you do this every month for ten years. Let's see what the breakdown is. So at the end of ten years, $500 a month gets you a $110,900. Wow. And this is the key thing right here, is this, this breakdown between what you've earned with interest and what you earned with your own contributions, 54% your contributions and 46% interest. So effectively, ten years of investing at 12% per year will double your money. And that's the, that's the total balance is this line. It's showing in this line graph right here. I highly recommend this calculator. It's really nice. It gives you a breakdown of what you put into it, what you earn, and what the ending principle is right there. So let's do another scenario. So say you invest $500 per month. You don't just do this for ten years, but you do it for 20 years. Let's calculate it and see the difference. Wow, it just went from a $110 thousand to around a $0.5 million, assuming that return rate is 12% Which by the way, 12% is the average return rate for investing in the S and P 500 over the past 100 years. That has been the average amount of returns that people get from the investments. All right, now let's look at the breakdown of this, this contribution that you made to the investment was only 26%. And then all of what you earned made up 73%. To be more specific, $335 thousand wasn't part of the contribution of 500 per month, but that was earned on interest. So now you can start to see the power of compounding interest through the years. The longer that you have the investment in the account, the more it earns you over the long haul. If you don't, believe me, just ask a man named Warren Buffett. He'll tell you, I'll tell you all about it. He has a net worth of about $60 billion. So, yeah. So let's go to the third scenario that I wanna take you through. Say you're invested for 30 years at $500 every month and you're contributing that into your retirement or any type of investment. This is when it gets a really, really beneficial. So you can see this in this breakdown chart. This is pretty crazy. Your contribution over the 30 years is a $180 thousand. The contribution from the investment itself is $1,000,300 thousand total. And you can see that broken down up there. And by the way, all of these are with a starting amount of $0. And I made it that way specifically to give you hope. And specifically so that you would see that it's never too late to start. And where you're at right now in life is the perfect time to start. You're not too late. You're not too early. Just right now is a great time. And so you can see that this graph, the balance accumulation graph gets even more dramatic. And this is your, this is your contribution total right here. And this is your total balance in the account. So as you, as you go through 25 years and 30 years, this curve gets even more and more dramatic. Now, with this fourth example, you're gonna see the curve get even more dramatic. So example number four, I want to do this for, say, a millennial who's 30? Say you're 30 years old. You're just beginning investing. You know, you don't have the best job yet. You don't have too much disposable income. So you are going to choose to give $250. Into your investment per month and say you start this at 30, you ended at 70, so you continue this investment for 40 years. What is it going to be when it gets to the end? Alright, wow, this is a whopper. Alright. So you get, you have 2 million, about $2.4 million at the end of 40 years, investing only $250 per month at a twelv percent return rate. And this breakdown graph is really dramatic here. So what you actually contribute to the account is a $120 thousand, which is only 5% of what the total account amount the account earns at the end of the period. And 95% of it is earned interest to the tune of $2.3 million. This is how people become billionaires. You don't become a millionaire overnight. You become a millionaire by starting to do the right thing and being consistent with it throughout your whole life. Alright, now I'm going to talk about the last example. Say you're a Baby Boomer. And what I mean by a Baby Boomer say you're 60 years old and you're cramming for your retirement exams, as in Gavin saved anything for retirement yet. There's still time for you. So you want to save as much as you can during this time. And if you are 60, you probably have a lot more disposable income. And say you're wanting to really catch up and make the most of your investments until you get to be 70 years old. So we're going to have this investment run for ten years. But instead of 250 a month, you're gonna put 1500 into your investments every month. This is cramming for exams. It's still ends up being worth it. I mean, see you put in that 1500, you earn at the end of ten years, you have around $300 thousand. And the breakdown here is, you know, you have 46% interests, 54% contribution. You can see the line graph here. What I would say is it's still worth it. It's never, it's never too late to start investing. And look at this. I mean, the total contribution is a 180 thousand. But what you end up with is 332 thousand, like that is totally worth it. Alright? And then with the last scenario, what if you start at 20 years old and you invest until you're 70, and when you're 20 years old, let's just put in $250. And you keep doing that consistently for 50 years straight. This is going to be the most fun one here because it really, between ages 4050, you can see the curve in this line really elevates and goes to a whole new level of what the, you're earning in your compounding interest. So what you put into the account is only a $150 thousand throughout your whole lifetime. I mean, anybody can afford that. What you end up with is $7.5 million. Oh my goodness. What? And the total interest that you earn is 98%. And the contribution that you actually have to pay into the investment throughout the years is a 150 thousand. Yeah. So beautiful. It's amazing the power of compounding interests. So I want to encourage you, don't be discouraged by where you're at. Be encouraged that there's always time for you to be able to invest no matter where you're at in life. I would just encourage you start now, get educated, take more my classes, and get to it because it is a great opportunity. 3. 401k vs IRA vs Brokerage Account: In this lesson, I'm going to teach you what the different investment accounts are and which one is best for you to use. So the three different investment accounts that you can get is a traditional 401K, a Roth IRA, and a brokerage account. But traditional 401K is unique in the sense that all contributions that you make into the account, you can withdraw from the account until you turn the age of 60. If you're a person who knows that you need an incentive and something to keep the money into the account because you know that you're going to want to take it out, then it might actually be the best account to get, because it's traditional. It will give you a large penalty if you tried to withdraw from the account before it has mature by the age of 60. The other unique thing about a 401K versus a Roth IRA is that contributions to the account are taxed upon withdraw, but they're not taxed when you put them into the account. So say you're 35 years old and you give $2 thousand into the account, that's $2 thousand that you give towards the account before being taxed. A lot of employers offer for one case to people, which is, which has a nice feature. The thing is, you will then be taxed when you withdraw from your 401K at the age of 607080 when you're taking out of the account. So just keep that in mind. A Roth IRA is a little bit different than a 401K, but it is a retirement account. You can put up to $6 thousand a year into your Roth IRA. There's unlimited withdrawals from the account throughout the life of it. And so if you get in a tight spot financially, you can sell stock or whatever you're invested in and withdraw from the account. Use that finances for other things. That might be a good thing, that might be a bad thing, like I talked about in the compounding interests slide. You really want to keep the money in there and as long as possible and do your best not to touch it at all. The great thing about a Roth IRA, I recommend that everybody gets one of these accounts. By the way, the money that you put into a Roth IRA is taxed when you put it in. It's part of your after tax income. That is a great feature because, you know, what I'm making now at the age of 31 is probably going to be less than what I'm making it the age of 60. I pay less taxes right now for the income that I'm putting in versus the income tax that I would pay when withdrawing it when I'm 60. So that's a nice feature with it. The other nice thing about a Roth IRA, so you can give $6 thousand into the account. The $6 thousand that you invest in a Roth IRA will not be subject to capital gains tax. You might ask, what is capital gains tax? Capital gains tax is a tax that the government puts on the percentage gained in your investment account. In the previous lesson, you learned about compounding interest. So the tax would be put on the interest part of that section of what you're earning in the account. So that's a nice thing to avoid. Capital gains. Taxes start at 15% and go up from there. So it's just something to think about. A big advantage of an IRA account. The third account that you can get is a regular brokerage account. And this is offered by a number of stock brokers. They're often online accounts like Robin Hood. They're not specifically designed for retirement, but they offer a lot of great tools, a little bit more flexibility than a retirement account offers, like the Robinhood app. I've got the Robin Hood app and I'm investing with that and it's super fun. But I just found this out. Is that what I earn through my Robin Hood app is actually subject to the capital gains tax that I was talking about when I do sell my shares of stock with my brokerage account. The difference between what I bought the share for and what I sold the share for. That difference that I earned is going to be taxed. Whereas with ira, it won't be. When I found this out. I was like, oh man, I have to make sure to put as much as I can into my IRA focused on that firsthand and then use my brokerage account from there, which is the same thing that I would recommend for you. A great place to get your IRA, your Roth IRA through is fidelity. And they have free trading so you can buy all these different stocks and ETFs and great investments through fidelity and invest them in your Roth IRA, a great brokerage account is Robinhood and the good thing about them is they have what's called fractional shares. For example, if you want to buy Google, it costs you $1300 and that not many people have that amount to just put in one share of stock. But you can put whatever amount of dollars that you want with your Robin Hood account, which has an advantage over the Roth IRA. So I have both kinds of accounts. If you're feeling like, Hey, my employer offers a 401K, you could get that account, you could get all three of them. But it's key to understand the tax advantages of each account. So I hope that helps you your account mix and what you choose is going to be the best for you. And I'm so excited seaway, each use. 4. Why Prices Change: In this lesson, I'm going to teach you what changes the price of your investment. There are a variety of things that can shift the price and the perceived value of what you're investing in. And it's key to understand this. It's kind of like a Dr. understanding what disease or, or what is going wrong with the person's body. It's the same thing for understanding what is affecting the price of the investment. There are five different things that affect the prices of investments. The first thing is global events, the second is national events. The third is industry changes. The fourth is company perception from the outside. And the fifth is company performance. I'm going to break this down a little bit for you. Sometimes we can look at our investments and think that the company is performing bad when there's actually a global event happening that's decreasing the amount of that investment. So for example, G is a really healthy company. They have really good financials. They make great cars, but they went down because of the global pandemic that was happening. What's affecting the price of the investment? You have to do a little bit of research and figure out before automatically thinking it's something because it could be something else. It example of a global event, something that happens on a multinational scale. So the Olympics, the pandemic, a worldwide recession. These are all global events and these can affect the prices of your investments. The next one is a national of that in the US, say there's an election, you know, say there's a holiday or Christmas or something like that. This can affect the price of your investments too. If something is happening in your nation, if people are feeling afraid, that usually affects investments negatively. The third thing that affects your investment price is industry changes. And so for example, your investment could be increasing because of greater demand in that industry as a whole, the healthcare industry has been growing for the past ten years. And so a lot of the investments are doing well because industry itself is an in-demand industry. However, there are industries that have great companies, but they're also in an industry that's not growing. That's another thing to keep in mind, is watching the price is, is this company's industry growing, then I'm investing? It is a great question to ask. The fourth price change factor is company perception. And this is the way that the public perceives the company from the outside. It doesn't have anything to do with what's happening in the company. That's what I'll talk about next. Prices of investments are determined by the amount that somebody's willing to pay for that investment itself. Say there's a company like Nike, they're perceived as the best and the greatest. Say there's something more going on behind the scenes at Nike, for example. I'm not saying that on purpose. I don't know anything about that. But just for example, all the people on the outside are viewing Nike as amazing. And then there's something potentially bad going on inside the company. The perception is different than the reality, but it's still affects the price. The fifth thing would be the actual company performance. Every company lists their profit at the end of each core. And you can see their income. You can see how many assets they owned, you know, how much money they borrowed. All of these things are great things to look at. And as these things change, so does the investment price. You invest in a company and they report a loss in income, That's going to affect the price negatively. If they report profit, that's most likely going to affect the investment positively. I would say that out of all the things to look at, the company performance is the most important and is the strongest indicator of long-term growth of an investment. So that's what my classes focus on, is researching and looking at company performance. In the next lesson, I'm going to talk about how to find the right opportunity and the right thing to invest in. 5. Finding the Right Opportunities: In this next lesson, I'm going to teach you how to find the right opportunity to invest in. And you might be asking yourself that very question. Like, there are all these companies, all these ETFs, how do I find the right one to invest in? The answer is, you have to focus on an area that you're familiar with. If you're into retail and clothing, focus on retail and clothing and your investments, pay attention to brand names and products that you're using that you find valuable. Pay attention to what your friends are buying. Oftentimes those companies are the companies that are poised to grow in the future. It's just so important to invest in what you know, and not have to venture outside of that to try to find something. With that, I do want to add this caveat is that you should always be expanding your knowledge and always, always be willing to invest in that, that one thing that stretches you a little bit. One of the things I really know is the car industry. So I invested in GM. I know what's going on in that industry, and I feel confident investing in that. But one thing that I don't really know a lot about is Disney and the entertainment industry. A couple of months ago I chose to invest in Disney. What I'm saying is invest in what you know, but also expand and go beyond what you know to. So I want to share this story with you because it is such a great example of what leads my investments. So this past summer as coded was happening, my stepsister, she drove up in a brand new Chevy blazer. And I was like, what? This car is incredible. The car was awesome. And it just looks so good. And Chevy is actually owned by GM. And so I was like, man, if GM's making cars like this, I'm going to buy some of their stock. What I chose to do is I bought stock in GM. And now that's working out really well for me. I want to paint this picture for you. Think of investing like being the batter during a baseball game as your batting. You're watching the pitches come by and you only want to hit the pitches in year sweet spot. You don't want to be swinging at the pitches that might look good, but they're a little high, a little low. You don't even want to swing at the pitches that are in the strike zone. But you know that you have a low percentage chance of hitting the ball. The reason for that is because you want to choose the pitch that has the most chance of you getting a hit and getting a home run. It's the same with investments. You know, you might see your friend is going to come up to you. I guarantee you this is going to happen. Your friends gonna come up to you and be like, hey look, I invested in this, they name a company that's not in your sweet spot that you don't know anything about. And they're like, look, it went up 50% in two weeks. Can you believe that you should invest in this? Don't go for it because it's a shiny distraction. It's gonna get used swinging at a pitch that isn't in your sweet spot. And so I want to encourage you as you begin to invest and make choices. Let pitches fly past. Let him fly past. Because there's always more pitches that will come by. And it's so true, there's always great opportunities for investments coming your way. So make sure to be selective. Which opportunities that it take. Stay tuned for the next lesson. It might be one of the most important ones. I'm going to show you where to find the best information on companies and different investments. 6. Where to Find Good Info: So in this lesson, I'm going to show you where to find the most valuable information to guide your investment decisions. In the next couple of minutes, I'll show you a variety of websites where I personally find the stuff that I use to find fundamental information's on stocks and other investments. So the first one here you can see This is kind of like Wikipedia for investments. And if I click on the Education tab, it has a large investment dictionary and say, I want to search EPS and I come across that term and I'm like, what does EPS mean? I can look it up in the dictionary and see, oh, it means earnings per share through the dictionary and the definitions, you can see the calculation of it. Everything that you would need to know about earnings per share is here. They also have fun one-minute videos that you can look at that defines at to. The other resource that I want to show you is Yahoo Finance. And this is a really good one that allows you to pull up financial information on specific stocks and ETFs. So if we look at Target Corporation, we can pull up their financials. You pull up this financials tab, and you can see that the total revenue of Target has increased for the past four years. And then you can look down and you can see the net income. It also has helpful graphs right over here. And all this information is free of charge. And then the other thing you can look at is the balance sheet. Balance sheets measure assets, liabilities, and equity. And so I can see, oh yeah, target has always been financially healthy, healthy because they've always had more assets than liabilities. And then the other resource that I wanted to show you is And really any platform that you choose to open an account with will have professional level tools for you to access. Fidelity is a great example of this. They have this visual of the day range and the 52-week range right here. Which is nice because it tells you the lowest price that the investment has been in the past year and also the highest price. And then shows you where the price is currently at in relation to those two prices. The one thing I don't really like about fidelity is their graphs aren't that good looking. It's not really a clear looking graph, but there are some great tools in here. Here's their earnings per share. What the consensus prediction was that they would earn per share. And then it lists what they actually earn per share here. Here's the company profile. This is always a good thing to look at. You can click the Show More and read specifically about what Bank of America does. This top competitors chart is nice too, because it takes the most key metrics. You look for and compares them between CitiGroup, JP Morgan, Chase, Wells Fargo, US Bank Corp.. So that's really nice. And then the other one that I like a lot is the fundamental analysis. And so this takes fundamental financial data and gives it a rank compared to its competitors. And so the valuation, you can see Bank of America, right now they evaluate it as slightly undervalued. And then if you look at the bottom, the financial health Matrix is at 98%, which means it's a very financially healthy company. When you look at their debt and interest obligations compared to their income, it's very healthy. This is also nice to look at, is the top ETFs exposure to. So an ETF is a fund that has chosen to have Bank of America as a main holding of it. All of these funds here have chosen to have Bank of America as significant holdings in their funds. Which tells me something important. It tells me that professional level investors are making Bank of America a significant part of their strategy. That just gives me a little bit more piece. Well, I'm investing in them. If you go up to the top, you have the basic numbers right here. Annual dividend yield $0.72 per year per share. You know, that's not a lot, but if you talk about having 2 thousand shares, then that's a different conversation. This is what fidelities tool looks like, but I would encourage you to take advantage of the tool that you have. And if you don't have an account, fidelity or Robin Hood are great places to open up an account. Here's Robin Hood. I just want to briefly show you what the Robin Hood app looks like and what information you can find here. It's more made for beginners. These graphs are actually absolutely gorgeous. Looking like this graph is amazing. I like how the lines are just closed in. Here is just the basic bare bones information. The dividend yield, the total volume. Here is some analyst's ratings. Here's what the earnings predictions have came out to be and some news and it's very bare bones. But what they've done is they've taken and condensed information and made it really easy to read for a beginner level. And sometimes when I just wanted to stare at a beautiful graph, I'll go on Robinhood and look it up. I'd encourage you to take advantage, especially of Investopedia, The first one that I told you about. Take advantage of this when you see a term that you don't understand. Look it up in Investopedia. And then before making an investment, it's always great to just check this financial information, the company before investing in them. In the next lesson, I'm going to talk about stocks versus ETFs and compare both of those investments. 7. Stocks vs ETFs: In this lesson, I'm going to teach you the difference between a stock and an ETF. Stocks are a single share in a company. The price change happens based on the perceived value or changes that happen in the company itself and tend to fluctuate more than ETFs. It is a higher risk investment, comparatively, an ETF is a collection of different stocks all bundled together in a fund. Etfs usually represent a certain industry or geographic location, such as an India ETF or an automotive industry. Etf, One of the most popular ETF's has the ticker symbol of violino. It's called a zoo. And it measures the S and P 500. The prices of your investments in ETFs fluctuate less because they're more diversified than a singular stock. Let's look at Yahoo Finance Again. Thank you, Yahoo Finance for an example of this. So what I've done is I've taken this graph and I've added target in red. And then I've added the retail ETF in blue for you to see how price fluctuations happen between stocks and ETFs. So right here, the stock and target Colvin had hit. And actually the ETF stock price improved faster than target. It didn't fluctuate as low as target did when Cove it hit as the market rebounded. Target actually passed the ETF around September of this year and has continued on and is growing faster. Now that the market is growing, you can see both of them are growing. But now that the market is working in a positive way, target grows more. When it goes negative, target goes more negative and the ETF goes less negative. So I just want to show you that great example, the fluctuation of prices of an ETF. So which is better for you, it depends on your risk tolerance. Now if you want to be taking higher risk than stocks are a better thing to invest in if you want to be taking lower risks than ETFs are the investment for you. Now what I would encourage you to do is have bowl in your portfolio. So you can have some ETFs and some stocks. So that as the market goes up and down and up and down, you can have that baseline of ETFs. But then also when you find those great opportunities with stocks, you can take advantage of those two. Here's what I'll say to, as nobody knows exactly what their risk tolerance is, it's like you have to experiment and hop in and experience the market for yourself to determine what your risk tolerance is. I remember when I just started out, I chose to start out investing in oil commodities, which is a very high risk investment. And I actually ended up losing money. But what happened was I learned a lot. I learned to invest in what I know by also was able to experiment with something outside of my risk level to help find what type of risk level I was comfortable with. So I'd encourage you to do the same thing as you go forward in the next lesson is called getting it right. When getting it wrong. What to do when you buy a stock, that's price is going down. 8. Getting It Right Even When You Get it Wrong: In this lesson, I'm going to show you how to get it right, even when you get things wrong. And now this is so important because you're going to make investments that you lose money on. But it's what you choose to do after the investment starts going down that really can make a difference for your portfolio. So how do you decide whether this is a losing investment or a winning investment? So this example right here, I'm looking at the company called Zoom communications. And you may have heard of this company during the corona virus, the price of the stock increased greatly because of the demand for video communication software. You know, chances are you downloaded zoom during the coronavirus. I wanted to buy zoom and I was looking to buy it in December of 2020. And i actually bought it at around $400 per share because I thought at the time that zoom would be continuing to increase in the share price, zoom would always be part of our lives for video communication, which may be true. I didn't take into account, was the fact that a corona virus vaccine was coming out. And it actually came out faster than we thought it was going to. So you can see here, when the vaccine started to get administered in November, early December, it went down and then it went down again at the end of December. I can't remember what the exact date I invested in it was, but it was somewhere around here. And what happened was it went all the way down to here. At the end of December, I lost about $50 and I was left with the choice, do I sell or do I keep zoom? And that's when I decided to do more research and find out what is happening with this stock in the commercial telecommunications industry. It's a lot more competitive. And so there's Microsoft, there's Cisco, and a few other players in that industry. And I just wasn't aware of this. And so knowing that I was like ES zoom might go up in the future, but knowing what drives its revenue changes my forecast for it. So even though I've lost money right here to here, I'm going to choose to sell the stock. So I sold it at like 350. And of course, it did go up a little bit more, but I'm actually really glad that I sold it. I'm really glad that I got right, getting it wrong. One of the things that you have to have as a portfolio manager is humility. You're not gonna get everything right. If you do your homework, you're going to get most things right. Nobody can predict the future, unfortunately. But there's a lot of things that you can do to help you make a really good decision about the future, even in situations where you're like, What should I do with this stock? It's not making me money. 9. Making a Long-Term Goal: In this lesson, I'm going to talk about making money over the long term and how to make specific goals. I'll just start out with this example. So for me, my goals are different than my friends financial goals because I'm actually thinking about 30 years from now. Most of my friends are actually thinking about five years from now, or buying an engagement ring or something like that, that affects the different choices that we make with investments. One of my friends right now is invested in a small gas company that has really gone up a lot over the last year. I'm choosing not to invest in that same gas company and invest in bigger companies in 30 years from now. I know those companies will be there and I don't know anything about this gas company. If there'll be there if they won't if gas will be obsolete by them. I just don't know. Pick your investments based on the time period of your investing goal. And I would recommend a more long-term goal because that puts it in perspective for you better. And example of a great goal to make would be to make $275 thousand in 20 years. What you would do is you'd break that down and take the 12% average return rate, divide that up and figure out how much money per month you need to invest in order to end up with $275,000.20 years from now, that dollar amount is actually $300 per month. And so when you break down your goal into the monthly target that you need to hit to invest, it becomes a lot less intimidating than, Oh my gosh, I gotta make $10 thousand by next month and it leads you to make a lot better decisions. Cider recommend setting your target return rate at 12%, because that is what the average return of the S and P 500 has been for the past 100 years. And make sure that after you set your goal, you stay faithful to it. I guarantee you there's going to be shiny things that come along that tried to distract you from achieving your goal. And so a friend will come to you. This is, this is going to happen without a doubt. Friend's gonna come to you and say, hey, I invested in this and it's up, huge, USA invest in it too. But it's not the right investment for your goals that you've set for yourself. So make sure to stay faithful. And I'm so excited to see what different goals you come up with and you achieve those goals of investing. 10. Next Steps: And here is what I'd like you to do with what you've just learned in this class. These are important steps to take to help you get the most out of this class. So I've designed a class project for you to do an interact with that has you creating a long-term investment goal, create a goal for 2040 years out from now. Do the calculation of what return, what monthly amount you're gonna put into the account, and what the total amount at the end that you want to end up with will be, I'd recommend using the investment calculator that I used in lesson one to achieve this homework assignment. After you finish the homework assignment, please take a screenshot of what you've come up with and post it this class so that others can see what goal that you've come up with. I love to see the different things that you guys come up with. We all as a community want to support you and champion you as you start investing and making goals. The second thing that I would like you to do is leave a review for this class. Let me know what you liked about it. These reviews are so helpful for other students who are looking at taking the class to be able to know that it is valuable information and they can find value in it. That would be much appreciated. The last thing I would recommend for you to do is to watch my class buying and selling stocks for beginners. It's a really great class. You know, say this class is beginner level. It's probably like intermediate between intermediate and beginner. And it shows you different trading strategies that you can take with you that are very helpful. The reason that I create all these classes is I have such a passion to see every person regardless of their race, ethnicity, or background, or wherever they've come from, discover the power that they have to make great wealth. And so there's going to be more classes coming out in the future. Make sure to follow this channel. And I'll see you in the next class.