Ex-Banker Explains: How to Invest for Beginners in 2025

Cult Insight

In this video, I’ll show you how to invest as a beginner in 2025 - cutting through all the confusing headlines to give you a clear, tested strategy that actually works.  DISCLAIMERS & DISCLOSURES  This content is for educational and entertainment purposes only. I does not provide tax or investment advice. The information is being presented without consideration of the investment objectives, risk tolerance, or financial circumstances of any specific investor and might not be suitable for all investors. Past performance is not indicative of future results. All investing involves risk, including the possible loss of principal.   Thank you for your support!  *T&C's apply

Transcript

00:00There are so many headlines right now telling you to start investing, buy gold, save 15% of your

00:05salary for retirement, but also avoid tech stocks because an AI bubble is about to burst.

00:11Which of these headlines are right and what should you actually do? I've spent almost a

00:15decade in banking and in this video, I'm going to cut through the jargon that I spent years learning

00:20to give you a tried and tested strategy that works. I'll tell you exactly what you need to

00:25be doing, not only to protect your finances, but also to make sure you come out ahead in the long

00:31run. Let's start with part one, the basics. What is investing and why does it matter so much?

00:36At its core, investing is just using your money to make more money. That is it. Why do you need it?

00:43Why do you need your money to make more money? The first is inflation, which makes your cash lose

00:47value over time. Prices rise, but the money sitting in your account doesn't. So if you've got 1,000

00:53sitting in your account in a few years time, it might only buy you 800 worth of stuff. Doing nothing

00:59feels really safe, but it's actually a slow way to lose your money. The second reason you want to

01:05invest is because it is the easiest way to get rich and build wealth. Because we are living in an

01:10economy where owning assets like property, like stocks, like businesses is rewarded far more than

01:16simply earning a salary. If you think about it, someone who bought a house over 20 years ago has

01:21probably seen its value more than double. Someone who invested in the stock market has seen their

01:26money grow around eight to 10% a year on average, if they did it correctly. But salaries, they haven't

01:33been as oppressive and they have barely kept up with inflation. And so if you want to stop feeling

01:38like you're constantly falling behind and in this cycle of just earning, spending, earning, spending,

01:43you need to understand and start using this to your advantage. You need to be investing. By the way,

01:49we are covering how to invest as a beginner in this video. But if you're really looking to take

01:53this whole investing thing very seriously and start making your money work for you, I've got a

01:58completely free live workshop coming up this Sunday, the 26th of October. Doors close in less than three

02:06days. It is the only investing workshop I'll be doing this year. Completely free to join. We are going

02:11to cover what to invest in, how to do it safely in the current market, and how to compound your wealth

02:16over time in a way that is as close to a guarantee as you can get. It's 45 minutes, completely free.

02:22You can sign up at nisha.me forward slash invest or click the link in my description. Let's move on to

02:29part two. How does the stock market work? All right, so now we've covered why investing matters. Let's

02:33talk about how the stock market actually works because it's one of those things everyone's heard of,

02:38but very few people really understand. When you buy a share, you're literally buying a small piece

02:45of a company. So if you buy one share of Netflix, you now own a tiny fraction of Netflix. So you're

02:51basically saying, I believe this company will keep making great products and keep becoming more

02:56valuable over time. And I want to make money from that growth. Once the company has decided to offer

03:01shares to the public, you can buy those shares on the stock market, which is basically just a

03:06marketplace where people trade tiny pieces of thousands of different companies. And those prices

03:11go up and down all day based on what people think that those companies are worth. Now, there are two

03:17main ways you can make money from this. The first is when you buy a stock and the price of that stock

03:22rises. So if you buy a share in Netflix for a hundred, and then a few years later, it's worth 150,

03:27you can sell it and make a profit. It's that simple. The capital gain, that is your profit. The second way

03:34is through dividends. Some companies share their profits with investors by paying them dividends on a

03:40regular basis. Some companies pay dividends every three months, but others are also annually. It's

03:46basically the company's way of saying thank you for being a shareholder and to encourage people to keep

03:51investing in them. Now, you're probably thinking, okay, well, that's all well and good. But what

03:55actually do I invest in? Do I invest in Netflix? And you could do, but it's a bit risky. Even though

04:02Netflix is one of the biggest companies in the world, it's risky because even the biggest companies can go

04:07out of flavor or struggle for years at a time. For example, remember when we all had a BlackBerry?

04:13If you bought one BlackBerry stock for $144 back in June 2008, it would be worth $4.52 today. Back

04:21then, we all thought that it was going to be the next big thing. Very few could have predicted that

04:26within a few short years, we would ditch BBM for iMessage or WhatsApp. Even if you spend your evenings

04:33reading company reports and analyzing balance sheets, which realistically not many of us want to do,

04:39it's incredibly hard to know which companies will do well in the long run. That's why most successful

04:45investors don't bother trying to analyze and guess the winners. Instead, they just buy all of these big

04:51companies at once through something called an index fund. An index fund is basically a big basket of

04:58hundreds or even thousands of shares designed to track the overall stock market. So for example,

05:04you can invest in a fund that tracks the S&P 500, a stock market index that includes the 500 largest

05:09companies in the US, including Apple, Microsoft, Amazon, Google, Tesla, and so many more. And here

05:16on the screen, you can see how it's performed over the last 30 years. If you invested $100 in the S&P 500

05:23at the beginning of 1996 and reinvested all of your dividends, you'd have about $1,764. That's a

05:31return on investment of about 1,664% or roughly 10% per year. Or if you're taking into account

05:39inflation, it would be around 7.52% per year. So instead of putting all of your eggs in Netflix's

05:45basket or Apple's basket, you can reduce your risk and build a diversified portfolio by investing in an

05:51S&P 500 index fund. If some companies go down, but others go up, you still benefit from the general

05:57upward trend of the market over time. You'll own hundreds of businesses across dozens of industries,

06:03including tech, including energy, including healthcare, including finance. And you might look

06:08at the S&P 500 and look at what it's made up of and think, why don't I just get the best performing

06:13companies in there, invest in the main ones. And for instance, the Magnificent Seven. And by that,

06:19I mean, Apple, Microsoft, Amazon, Google, Meta, Tesla, and NVIDIA. They have dominated the US stock

06:25market in recent years. So I get why you'd want to just focus on those. They are the ones that have

06:29had the biggest gains. Why don't you just go all in on that? But looking at the S&P 500 between 1980

06:35to 2020 shows the biggest companies have changed a lot over time. Back then, the market was dominated

06:42by completely different companies, General Electric, Walmart, ExxonMobil, which just goes to show how risky

06:48it is to depend on a small number of companies. There is absolutely no guarantee that today's

06:53winners will still be in the lead a decade from now. Looking back even further in the 1960s and early

07:0070s, American Express, McDonald's, Kodak, Coca-Cola, they were the big names and investors assumed

07:06they would keep growing. But the bubble burst in the mid 1970s, with many seeing a huge drop in share

07:13price, Kodak's fell by more than 90%. So that's the point I'm trying to make. You just don't know

07:18which companies are going to be at the top. Something else to keep in mind is that the US

07:22economy has its own uncertainties right now. So it may make sense to invest in funds from other

07:26parts of the world too. No one knows which country or which company will lead the next decade. So by

07:32owning a little bit of everything, you can reduce the risk and have a really concrete long-term plan.

07:37And now let's move on to part three, which is how to actually invest. Because now you know what to

07:42invest in, how do you actually start? So here's what you need to do step by step. First, you'll need

07:47to pick an investment platform. Wherever you are in the world, this is just the website or the app

07:52you'll use to buy and manage your investments. The key thing to look at here is that or to make sure

07:58is that it's regulated, reputable and has low fees because over time, the smallest fee difference can

08:05massively eat into your returns. Before signing up, have a look at the different types of accounts

08:09available on that platform. Some offer general investment accounts where you may have to pay

08:13tax on your profits. Others will provide tax efficient accounts such as the stocks and shares

08:18ISA in the UK, the TFSA if you're in Australia or Canada, NISA if you're in Japan. If you have access

08:24to a workplace pension, this might be even more rewarding than a tax efficient account as in many

08:30parts of the world your employer will also match your contributions to. So if your employer does

08:38match that, look into this option first so your portfolio can grow even quicker. Step two, once your

08:43account is open, you'll need to add some money, usually by bank transfer or by debit card. Step three,

08:50then you want to choose your investments. Remember what I said earlier about index funds generally being

08:54less risky than individual stocks? As tempting as it may be to build a portfolio with your

09:00favorite companies individually, you'll usually make less money that way than you do or than you would

09:06with funds. That's what you want to do. Start with global diversified funds and then as you learn more,

09:11you can get more nuanced and increase your returns by adding more structure to your portfolio. Step four,

09:18here's the part that most people overlook, automation. Instead of trying to pick the perfect moment to

09:23invest, you can set up a monthly direct debit. So a set amount that is invested automatically,

09:28100 a month, 200 every month. By investing small and manageable amounts regularly, you can smooth

09:34out the highs and lows of the market. This is known as dollar cost averaging. Some months you buy when

09:39prices are high and other months you buy when they're low. But over time, it tends to average out and most

09:45importantly, you remove the temptation to mess about with it. And then part four, the million dollar

09:51question, what if it all goes wrong? Before you dive in, let's talk about this. What if the market

09:57crashes because it's at an all-time high or the companies you've invested in stop growing? Well,

10:04the first thing to keep in mind is that if you've invested in funds rather than picking individual

10:09stocks, you are already well protected. By diversifying your portfolio, you'll find it much

10:15easier to ride out market turbulence even if some companies fail or the market crashes. That's why

10:22diversifying not only across funds but also across assets is so important. And to be honest, the biggest

10:28risk for most investors isn't actually the market itself. It's themselves. For example, let's see you

10:33see some guy on the news saying that we're heading for a crash. You might panic and sell your investments

10:38only for the expert on the news to be completely wrong. Best case scenario, you sold it for a profit and

10:44you could always buy back in. Worst case scenario, you sold it at a loss and you realize that loss

10:50and it'll cost you more money to buy the same investments again. Automating the process stops

10:55you from panic selling when things dip or for trying to wait for the right time that never ever comes.

11:01So if you've been thinking of investing but you haven't known where to start, I hope this video has

11:05given you the confidence to take that first step. If you'd like to dig a bit deeper and figure out how to

11:10choose the right funds for you and identify the best exact time to invest and protect yourself

11:16from common investing pitfalls, you might enjoy my free investing workshop. Once again, it's on Sunday,

11:22the 26th of October at 5pm UK time. Doors are closing in a few days and it's designed specifically

11:28for beginners. By the end of it, you'll walk away knowing exactly what to do next and I promise

11:33not to bombard you with boring investment jargon or overwhelm you with numbers. It's just a clear plan

11:39to get your money working for you. Thank you so much for watching. You could click the link in

11:44the description to sign up and don't forget to subscribe if you haven't already. See you in the

11:48next one.

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