- 6 months ago
Everybody talks about investing in the stock market and earning passive income, but nobody shows you how to actually do it... Today, I cover EXACTLY how to start investing for beginners in 2025 - Enjoy!
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00:00What's the best way for beginners
00:01to start investing online with just $100?
00:04As a millionaire investor,
00:06this is something I get asked all the time.
00:08And because of that, four years ago,
00:11I set out to answer this question
00:13by creating a video where I invested $100
00:16into five different things.
00:18Today, I'm gonna compare the results
00:20from those five investments
00:21that you can make from your laptop
00:23and try to finally answer the question once and for all.
00:26We're gonna be using this grid
00:27to judge each one in these categories.
00:29First up, learning curve.
00:31This is how long it takes
00:32to learn the ins and outs of each method.
00:34Ideally, we want this to be as short as possible.
00:37Next is passive income potential,
00:40which is how much money an investment
00:42can earn for you passively while you still own it
00:44without needing to sell it.
00:45Then there's tax efficiency,
00:48which refers to the specific tax advantages
00:51or benefits available for each type of investment
00:54that can help you pay less tax.
00:56After that, we have risk level,
00:58which is about how likely you are to lose money
01:01and how much the investments value might go up or down.
01:04And finally, we're looking at the results.
01:07This is where I'll reveal my percentage return
01:09over the last four years
01:11and exactly how much my $100 investment is now worth.
01:14Before we jump in, please remember,
01:16I'm not a financial advisor.
01:18I'm just sharing my own results and strategies
01:21that have worked for me over the years.
01:22Please also do your own research.
01:28Okay, first up is individual stocks.
01:31Individual stocks give you the chance
01:33to own a piece of a company you believe in.
01:35This can be really exciting
01:36because you're directly investing in businesses
01:39that you think will grow or succeed.
01:41For learning curve, I'm gonna say this is high.
01:44If you want to be successful picking individual stocks,
01:47then it's not just a guessing game.
01:48You'll need to dig into the nitty gritty
01:50of a company's fundamentals.
01:52This includes looking into the financials,
01:54who's leading the company,
01:56and how well known the brand is.
01:58When I invest in individual stocks,
02:00I look through income statements, balance sheets,
02:02and cash flow statements.
02:04So when I invest in a stock,
02:05I'm in it for the long haul,
02:07which means at least two to 10 years.
02:09A great way to learn how to do this
02:11is by using an investing app with a demo account,
02:14which lets you play around with fake money
02:16until you're confident with your strategies.
02:19For passive income potential,
02:21I'm gonna say this is good.
02:23You see, when you own a stock,
02:25there are two ways you can make money.
02:26Firstly, if the price of the stock goes up
02:29during the time you own it,
02:30you can sell it for more than you paid.
02:32Secondly, you can receive dividends.
02:35Dividends are regular payments to shareholders.
02:38Not all stocks pay dividends,
02:39but if they do,
02:40this means you can receive money
02:42without ever selling your stock.
02:43This is essentially passive income.
02:46Now for tax efficiency.
02:48This is great.
02:50If you use the right accounts,
02:51then you can reduce your tax burden.
02:54In the UK, these are called stocks and shares ISAs.
02:57You can set one up on most investing apps,
02:59and any profits you make are safe from taxes.
03:02In the USA, there's something similar called a Roth IRA.
03:05These accounts work like a shield,
03:07protecting your profits from the tax man.
03:09While there are different rules depending on where you live,
03:11the idea is the same.
03:13Please bear in mind that I'm not a tax advisor,
03:15and you should do your own research
03:17as everyone's circumstances are different.
03:19So what's the risk?
03:20This is definitely high.
03:23Back in 1995, during the dot-com boom,
03:26I got lucky and picked a few great stocks.
03:28I sold them at the right time
03:30and made a lot of money in a short period.
03:32But when the bubble burst,
03:34some of the other companies I'd invested in,
03:36ones that cost me very little,
03:38went out of business completely,
03:39even though I ended up making money overall.
03:42It just shows how risky investing
03:44in individual stocks can be,
03:46especially if you put all your money
03:48into just a few companies.
03:49If they fail, you could lose everything.
03:52So let's look at how much
03:53my $100 investment is now worth.
03:56Let me refresh your memory.
03:57Here's what I invested in.
03:59So I'm gonna throw a dart at the board,
04:00and as you can see,
04:01I've randomly selected 20 different stocks,
04:05and wherever the dart lands,
04:06that's what I'm gonna invest in.
04:08Now I've just gotta put on a blindfold.
04:09Okay, here we go.
04:13Right, let's see what we got.
04:15And we've gone into Samsung.
04:18That investment is now worth $67.66.
04:23But don't forget my dividends.
04:25Over the four years, I made 10 cents.
04:28So that leaves me with a total of $67.76.
04:33That's a negative 32.34% return.
04:39This example perfectly shows how hit or miss
04:41individual stock investing really is.
04:43That dart could have just as easily landed on Apple,
04:46Microsoft, or Nvidia.
04:48So let's have a look at how much I would have made
04:50if that dart had landed a bit differently.
04:53A $100 investment in Apple four years ago
04:56would now be worth $170.
04:59The same investment in Microsoft would be $188.
05:03And, drum roll please, Nvidia would be worth $908.
05:09Those stocks have boomed in recent years,
05:11and luckily I have some of those in my personal portfolio.
05:15But this just goes to show,
05:16you can't just leave individual stock investing down to luck.
05:20You have to be strategic with your stock picks.
05:22And even then, the market is unpredictable.
05:25If you wanna try this out, just download Trading212.
05:28It's a great app for beginner investors
05:30because it lets you use a demo account
05:32to practice trading with fake money.
05:35This way, you can learn how it all works
05:37without risking any real cash, just like I mentioned earlier.
05:40It also lets you set up a stocks and shares ISA
05:43if you're in the UK,
05:44which protects your investment returns from taxes.
05:47But again, I'm not a tax advisor,
05:49so please do your own research
05:50as everyone's situation is unique.
05:52Trading212 also lets you buy fractional shares,
05:56which means you don't have to buy a whole stock.
05:58That's how I was able to own just 0.07 of a Samsung stock,
06:03instead of having to buy an entire share.
06:05As I was gonna mention Trading212 anyway,
06:07I reached out to see if they'd be interested
06:09in sponsoring this portion of the video.
06:12They agreed and are offering a free fractional share
06:14worth up to a hundred pound to anyone that uses the code
06:18Tilbury when they create an account.
06:20Plus, you can get more free shares by inviting your friends.
06:23Both of you will get a free share
06:24as long as they fund their account.
06:26I'll leave the link in the description if you're interested.
06:28Second is a real estate investment trust,
06:35otherwise known as a REIT.
06:36I know this one sounds pretty complicated,
06:39but it's actually quite cool.
06:40Imagine your friend collects $100 from 3,000 people,
06:44giving him $300,000.
06:47He then uses that money to buy a property,
06:49rents it out and shares the rental income
06:52with all 3,000 people who helped him buy it.
06:55That's a simple way to explain a REIT.
06:58It allows anyone to invest in properties
07:00without needing to buy one themselves.
07:02Think of it like you own the front door,
07:04someone else owns a window and a few others own the bricks,
07:08which means together, everyone owns the entire property
07:11and shares in the profits.
07:12The learning curve, I'm gonna say it's moderate.
07:16And that's because getting started with REITs
07:18is much easier than buying physical property.
07:21It's not like you need a huge down payment or a mortgage,
07:24and there's no need to deal with agents or solicitors.
07:27However, you do need to understand how REITs work.
07:30They own things like offices, shopping centers,
07:33apartments, hotels, and much more,
07:35and they get their income through rent.
07:37For passive income potential,
07:39I'm gonna say this is great.
07:42REITs are well known for paying high dividends.
07:44This is because the law says they have to pass on
07:47at least 90% of all their profits to investors.
07:50So as long as the REIT is doing well
07:52and its properties are rented out,
07:54you can earn a steady stream of passive income.
07:56Most businesses sign long-term leases
07:59on their commercial properties.
08:00Therefore, most of the time,
08:02income is pretty stable and reliable.
08:04But of course, just keep in mind that your earnings
08:07depend on the REIT you pick
08:08and the types of properties it owns.
08:10For tax efficiency, I'm gonna put this down as great.
08:14This is because in many countries,
08:16REITs offer great tax benefits.
08:19For example, in the UK,
08:20you can hold REITs in a stocks and shares ISA,
08:23which means you don't have to pay taxes
08:25on your profits or dividends.
08:26In terms of risk, I'd have to say this is medium.
08:31REITs are generally less risky than buying a single property
08:34because they invest in multiple properties
08:36spreading out the risk.
08:37However, they're not risk-free.
08:39If the real estate market takes a downturn,
08:41or if the REIT struggles to keep its properties rented,
08:44you might see both a drop in dividends
08:47and the value of the investment.
08:48So what's my investment worth now?
08:50Let's flashback to me making the investment four years ago.
08:54As I'm in the UK, I'm gonna use the Trading212 website
08:57to put $100 into a similar REIT.
09:00Ready for the moment of truth?
09:01Looking at my investment now,
09:03I can see it's worth $98.59.
09:06So that's a small loss of 1.41%.
09:10This shows that even though REITs are normally more stable
09:13than individual stocks,
09:14they're not guaranteed to perform well.
09:17My REIT likely underperformed
09:18because it invested in commercial real estate,
09:21which struggled during the pandemic.
09:22But that's not the end of the world,
09:24as I made $11.93 back in dividends,
09:28meaning I'm actually $10.52 up.
09:31So that's...
09:3210.52% up.
09:37Third is cryptocurrency.
09:42Imagine a form of digital money
09:44that isn't controlled by any government or bank.
09:47That's what cryptocurrencies like Bitcoin and Ethereum are.
09:51These currencies run on the blockchain technology,
09:53which makes them secure, transparent,
09:55and almost impossible to counterfeit.
09:58Cryptocurrencies have created massive wealth for some people,
10:01with Bitcoin being the best performing asset
10:03of the last decade.
10:05But on the flip side,
10:06it's highly volatile,
10:08and people have also lost fortunes.
10:10That's why I'll describe crypto
10:11as part investment and part speculation,
10:14and not for the faint-hearted.
10:16For learning curve,
10:17I'm gonna say it's moderate.
10:19Crypto might sound complicated,
10:21but I'll break it down for you.
10:23First, you'll need a wallet.
10:24This is where you store your crypto.
10:26Think of it like a digital piggy bank,
10:28and there are different types.
10:30First are online wallets.
10:32These are easy to use,
10:33but you'll need to protect them
10:34with very strong passwords.
10:36Second are offline wallets,
10:38like hardware wallets.
10:40These are the safest
10:41because they're not connected to the internet.
10:43Next, you'll need to pick an exchange
10:45to buy and sell your crypto.
10:47Some popular ones are Coinbase and Binance.
10:50These platforms make it simple to trade,
10:52but make sure to choose a trustworthy exchange
10:55to avoid any issues.
10:56Then there's tokenomics.
10:58This just means understanding
10:59how the supply and demand of a coin works.
11:02For example, Bitcoin has a limited supply,
11:05which is why it's often called digital gold.
11:07For passive income potential,
11:09I'm gonna also say this is moderate.
11:12Unlike stocks or REITs,
11:13crypto doesn't pay dividends,
11:15but there are ways to earn passive income.
11:17The first is called staking.
11:19This is when you lock up your crypto,
11:21like Ethereum, to help the system work
11:23and process transactions.
11:25In return, you get paid rewards,
11:28kind of like earning points for helping out.
11:30The second is yield farming.
11:32This is when you lend your crypto out to others
11:34and earn interest on it,
11:35similar to how a bank pays you interest
11:37when you save money with them.
11:38These methods can generate decent returns,
11:41but they do come with higher risks.
11:43If the coin's value drops
11:44or the platform you're using gets hacked,
11:47your income could disappear along with your crypto.
11:50That's why I personally don't mess with any of this
11:52and just hold mine on a ledger wallet.
11:54For tax efficiency,
11:57I'm gonna have to say this one is poor.
11:59Taxes are a tricky part of crypto investing.
12:02In many countries, even swapping one cryptocurrency
12:05for another counts as a taxable event.
12:08And if you earn staking rewards,
12:09those are also taxed as income.
12:11You also can't hold crypto in tax-advantaged accounts
12:14like ISAs or Roth IRAs,
12:16which makes it less tax efficient than stocks or REITs.
12:20In terms of risk, I'd have to say it's very high.
12:24Crypto is one of the most volatile investments out there.
12:27Prices can soar 1000% in a year,
12:30but they can also crash just as fast.
12:32Personally, I just invest in Bitcoin and Ethereum,
12:35as they're more established
12:36and often referred to as blue chip cryptocurrencies.
12:39Smaller altcoins can be far more risky.
12:42You've also got to be cautious of scams.
12:44Since crypto isn't regulated,
12:46if someone hacks your wallet
12:47or tricks you into sending your coins,
12:50there's no way to get them back.
12:52So keeping your crypto safe is just as important
12:54as learning how to invest in it.
12:56So what's my investment worth now?
12:58Let's rewind to when I made this investment four years ago.
13:02So I'm going to jump onto the most popular Bitcoin app,
13:04which is called Coinbase,
13:06and invest my $100 in Bitcoin and forget about it.
13:11Ready for the reveal?
13:11The $100 I invested in Bitcoin is now worth $652.24.
13:18That's a return of 552.24%.
13:24Now, I know what you're thinking.
13:26That's insane.
13:27And it is.
13:28But I have to stress that this kind of growth is not typical.
13:31Bitcoin has been the best performing asset
13:34of the last decade,
13:35but most cryptocurrencies don't see these kinds of returns.
13:38Many lose their value entirely.
13:40In my opinion, crypto is exciting,
13:43and the technology behind it
13:44has the potential to transform industries.
13:47However, it's not for everyone.
13:49It's highly volatile, speculative,
13:52and requires a strong stomach
13:53to handle the wild price swings.
13:55Just remember, crypto is all about high risk
13:58and high reward.
13:59So if you're going to dive in,
14:01make sure you're doing your research
14:02and investing wisely.
14:07Fourth is gold.
14:09This is one of the oldest and most trusted ways
14:12to store and protect wealth.
14:14Gold is often called a safe haven
14:16because it's a great way to protect your wealth
14:19during uncertain times,
14:20like when inflation is rising
14:22or the economy is struggling.
14:24For learning curve,
14:25I'm going to have to say it's low.
14:27Learning how to invest in gold is pretty simple.
14:30You have two main options.
14:32First, physical gold.
14:34This includes gold bars and coins.
14:36Many people also think
14:37you can buy gold jewelry as investments,
14:39but you'll often pay more than the gold is actually worth
14:43because sellers add a markup for their craftsmanship.
14:45For this reason,
14:46I personally stick to gold coins.
14:48Just bear in mind,
14:50if you pick this option,
14:51then you'd have to store it somewhere safe.
14:53Second is gold ETFs.
14:55These are funds that let you invest in gold
14:57without physically owning it.
14:59For example,
15:00in the UK,
15:01you can use Trading212 to buy shares
15:03in something like the iShares Physical Gold ETF.
15:07It's quick, easy, and you can buy or sell it
15:09with just a few clicks.
15:10Passive income potential is absolutely zero.
15:15Unlike stocks, REITs, or crypto,
15:18gold doesn't pay any passive income.
15:20It's not an income generating asset.
15:22It's purely a store of value.
15:24For tax efficiency,
15:26I'm going to put this as good.
15:28If you buy physical gold,
15:29like gold coins or bars,
15:31the tax rules can be a little tricky.
15:34For example,
15:34in some countries,
15:35certain gold coins like the UK's gold Britannia's
15:38are considered legal tender,
15:40which means you don't pay capital gains tax
15:43when you sell them.
15:44However, this doesn't apply to all gold coins or bars,
15:47so you'll need to check the specific rules
15:49in your country.
15:50For gold ETFs,
15:52they're generally more straightforward.
15:53In countries like the UK,
15:55you can hold them in a stocks and shares ISA,
15:57which makes any profits completely tax-free.
16:00Interestingly,
16:01physical gold has another unique advantage.
16:04It can be used to transport wealth
16:06across borders discreetly.
16:08That said,
16:08this approach comes with risk,
16:10such as theft or legal restrictions
16:12on transporting large amounts of gold across borders.
16:16While it's not something I'd necessarily recommend,
16:18it's worth mentioning as a unique aspect
16:21of owning physical gold.
16:22In terms of risk,
16:24I'd say this is a medium.
16:26Gold is one of the safest investments you can make.
16:29It's been used as a form of money for thousands of years,
16:32and it's known to hold its value during times of inflation
16:35or economic uncertainty.
16:37However,
16:38the opportunity cost of investing in gold can be a downside.
16:42While it's great for protecting your wealth,
16:44it doesn't have the same growth potential
16:46as other investments like stocks or crypto.
16:49So, what's my investment worth now?
16:51Let's flashback to when I made this investment four years ago.
16:54I'm going to invest using trading 212 in a similar share.
16:58And with just a click of a button,
17:00there you go.
17:01I'm now Mr. Goldman.
17:02So, what's Mr. Goldman's investment worth today?
17:06Well, it's currently sitting at $140.10.
17:10That's a return of 40.1%.
17:13Now, that's not as exciting as Bitcoin's performance,
17:17but it's solid, steady growth.
17:19This shows how gold is better for protecting your wealth
17:22rather than rapidly growing it.
17:24Fifth is index funds.
17:29Imagine owning a tiny piece of the largest companies
17:32like Apple, Microsoft, and Amazon all at once.
17:36That's exactly what an index fund allows you to do.
17:39It's a basket of stocks that mirrors the performance
17:41of a specific index like the S&P 500.
17:45So, you're investing in the overall market
17:47rather than betting on individual companies.
17:50For learning curve,
17:51I'm going to have to say this one is low.
17:54Unlike individual stocks where you need to dig into
17:56the financial statements and company performance,
17:59index funds are passive investments.
18:02You don't have to pick and choose stocks
18:03as they're already bundled together for you.
18:06Getting started is simple too.
18:08Platforms like Trading212 let you buy index funds
18:12with just a few clicks.
18:14Once you've invested, all you need to do is sit back
18:16and let the market do the work.
18:18For passive income potential,
18:20I'm going to say this is moderate.
18:22Index funds don't directly pay high dividends like REITs,
18:26but they still provide some income.
18:28Many companies in the fund pay dividends,
18:30and those are automatically distributed to you
18:33or reinvested back into the fund, depending on your choice.
18:37While the main focus of index funds is long-term growth,
18:40the dividend income can be a nice bonus,
18:43especially if you're investing in funds
18:45that focus on dividend paying companies.
18:47For tax efficiency, I'm going to say this one is great.
18:51If you hold index funds in a stocks and shares ISA in the UK,
18:55or a Roth IRA in the USA,
18:57you can avoid paying taxes on dividends
18:59and capital gains altogether.
19:01This means you get to keep more of your profits over time,
19:04which can make a huge difference
19:06when you're investing for the long haul.
19:08In terms of risks, I'd say it's pretty low.
19:11Index funds are much less risky
19:13than investing in individual stocks
19:15because they're diversified.
19:17Instead of putting all your money into a few companies,
19:20you're spreading it across hundreds
19:22or even thousands of stocks in different industries.
19:25Historically, the S&P 500 has delivered
19:28average annual returns of around eight to 10%
19:31over the long term.
19:32While the market can go up and down in the short term,
19:35if you hold onto an index fund for 10, 20, or even 30 years,
19:39it's one of the safest ways to grow your wealth.
19:42However, of course, there are still risks
19:44like with any investment.
19:45So what's my investment worth now?
19:48Let's rewind to when I made this investment four years ago.
19:51If we head over to Vanguard's website now
19:53and we find the S&P 500 and deposit some money
19:57and then click, there you go, job done.
19:59Right, so time for the reveal.
20:01Today, that investment is worth $179.57.
20:07That's a return of 79.57%.
20:12This result shows why index funds are such a great option
20:14for most investors.
20:16They're simple, low cost, and consistently deliver solid
20:19returns over time.
20:21Personally, index funds are my favorite investment,
20:24which is why I've allocated the majority of my money there.
20:28However, I also understand the importance
20:30of diversification, so I spread smaller percentages
20:34across all the other investments we've discussed today.
20:37This way, I can balance growth, stability,
20:39and risk in my portfolio.
20:41So whether you're diving into individual stocks,
20:44buying some REITs, exploring crypto, getting into gold,
20:47or sticking with the steady reliability of index funds,
20:51each investment has its pros and cons.
20:53Some are better for growing your wealth quickly
20:56while others are designed to protect it over the long term.
20:59The most important lesson is to start early.
21:02Even small amounts like the $100 we've been working with
21:06can grow into something significant
21:08thanks to the power of compounding.
21:09Time is your best friend when it comes to investing,
21:12so don't wait to get started.
21:14If you want to know what the laziest way
21:16to make money online is, then I'm going to leave
21:18that video right up there, but don't click on it just yet.
21:20Make sure to subscribe if you want to grow your wealth, okay?
21:23I'll see you over there.
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