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PorusWorld
  • 14 hours ago
How to Invest As a Teen With $0
Transcript
00:00This video is gonna create future millionaires
00:02because I'm gonna explain exactly what you need
00:04to be doing at ages 13, 14, 15, 16, 17, and 18
00:09so you can get financially ahead.
00:11And if you're older, then use this as a checklist
00:13to make sure you're on track.
00:15I promise if you just implement a few of these things,
00:18you'll be so far ahead of everyone else,
00:20they won't even believe you.
00:22I managed to become a millionaire in my 20s.
00:24However, if I watched a video like this when I was younger,
00:27then I'm sure I could have made my first million much faster.
00:31Don't just watch the part of the video that's for your age.
00:33You need to do all of these things.
00:35And if you skip steps, you might end up regretting it.
00:39Right, let's kick this off with age 13.
00:43When it comes to investing,
00:45the hands down most important thing is time in the market.
00:49But what does that actually mean?
00:52Well, put simply, you wanna have your money invested
00:54for as long as possible,
00:56so it can start growing rapidly,
00:58like a snowball rolling down a hill
01:00and eventually turning into an avalanche.
01:03So if you're actually 13 or younger
01:05and you're watching this video right now,
01:07I think all us oldies would agree
01:09that you're in the best possible position.
01:12So how do you actually start investing at this age?
01:15Well, as you're currently not of legal age
01:17to invest on your own,
01:18you're gonna need to convince a parent or guardian
01:21to open up something called a custodial account.
01:24Now, I understand it might be hard to speak to your parents
01:27about money and investing.
01:29My parents never ever spoke about money at all,
01:32let alone investing.
01:33So if you want to, feel free to show them
01:35the next 30 seconds of this video
01:37so I can help persuade them to open up one for you.
01:40A custodial account is an investing account controlled
01:44by an adult for the benefit of a minor,
01:46typically a family member.
01:47These have different names depending on where you live.
01:50In the UK, we have something called
01:52a junior stocks and shares ISA,
01:54which lets your parent or guardian invest up to 9,000 pounds
01:58a year on your behalf.
01:59Now, of course, they don't have to do this much,
02:02but just think, every birthday or Christmas,
02:05you could ask them to put some money into the account
02:07and invest in some stocks and shares.
02:09I'm not a financial advisor,
02:11and this shouldn't be taken as financial advice.
02:14However, over the years,
02:15I've just invested in a simple low-cost S&P 500 index fund.
02:20This invests your money across just over 500
02:22of the biggest public companies in the USA,
02:25so you don't have to worry about picking individual stocks.
02:28The historical average yearly return of the S&P 500
02:31is 12.58% over the last 10 years,
02:35as of the end of May, 2024.
02:38Of course, investments can go down as well as up.
02:41If you've got a junior stocks and shares ISA,
02:44then you'll be able to start managing it for yourself
02:46from the age of 16,
02:48and you could start to withdraw money
02:49from the age of 18, if you wanted to.
02:52But if you're anything like me,
02:54once you've got the investing bug,
02:55you'll probably wanna keep it growing.
02:57In America, you have two main options,
02:59a UGMA and a UTMA.
03:02These both have unlimited contributions,
03:05but you could trigger gift tax
03:07if your parent or guardian puts in
03:08more than $18,000 in one year.
03:11The only real difference between these two
03:13is that with a UTMA,
03:15you can also invest in real estate and fine art.
03:18A custodial account can be set up
03:20with most banks and brokerages.
03:22My favorite is Vanguard for both the UK and the USA,
03:25as they've pretty low fees,
03:26and they've certainly been around for a long time.
03:29So if you're younger than 18,
03:30then please, please, please promise me
03:33you talk to your parents about getting one of these accounts,
03:36as it gives you such a head start.
03:38Right, moving on to age 14.
03:42Besides time, another huge advantage you have at this age
03:45is that you probably don't have to pay rent
03:47and other monthly bills.
03:48This means you have the freedom to try different ways
03:52to make money since you don't need a reliable income
03:55every single month.
03:56You should go out and try everything from cleaning driveways
03:59with pressure washers to competitive sports.
04:02Not everything has to be about making money.
04:05You can learn a lot from other activities,
04:07which you can use to make money when you're older.
04:09My son Curtis used to get up at 4 a.m. most mornings
04:13for swimming practice.
04:14Of course, he didn't earn any money from this,
04:16but it did teach him discipline.
04:18So when he started his business at 18,
04:21he could outwork his competition.
04:23I speak to so many teenagers
04:25who tell me they don't have a talent,
04:27but when I ask them what their hobbies are,
04:29they can't even name a few they've tried.
04:31You can't expect to find your talent
04:33if you don't try a wide range of different things.
04:36If it doesn't work out then, that's absolutely fine.
04:39Just try the next thing and the next.
04:42When you find something you're naturally good at
04:44or enjoy getting better at, double down on it
04:47and make it your mission to become one of the best.
04:50Next, age 15.
04:53One of the things I miss most about being younger
04:55is birthday and Christmas presents.
04:57Not that I got a lot as my parents weren't very wealthy,
05:00but I definitely got more than I do now.
05:03That's just the reality of growing up,
05:05especially for young men.
05:06So instead of asking for presents like PS4 games
05:10and other things that you're not really gonna care about
05:13in less than a few months,
05:14a huge life hack is to ask for cash whenever possible.
05:18I'd also highly recommend going and getting a Saturday job.
05:21Now, don't be too picky at this stage.
05:24Even working in a retail store behind a counter
05:26can earn you a nice bit of extra money.
05:28You'll also learn a lot of useful social skills
05:31that will prepare you for the real world.
05:33Doing both of these things will help you
05:35start stashing away cash
05:37as long as you avoid the temptation to spend it.
05:39I like to use the word stash instead of save,
05:42as I have a problem with the way most teenagers
05:45approach saving money.
05:46They will save for months and then go and spend it all
05:49on a new game console or a day at the theme park.
05:51Now, obviously we all like a roller coaster, that's for sure.
05:55This shouldn't be what you're stashing your cash for though.
05:58Of course, you should spend some of it to have fun.
06:01However, see your stash more like a launch pad
06:04that you can use to make even more money.
06:07The hardest thing in the world
06:08is starting with $0 to your name.
06:11So if you can avoid that,
06:13even if you have as little as $100,
06:16then it's gonna make everything so much easier.
06:19Oh, and I almost forgot,
06:20go and apply for your provisional driving license.
06:23In the UK, you can do this
06:24when you're 15 years and nine months old.
06:26So it's worth getting,
06:28even if you don't intend to start using it right away.
06:31Right, now it's getting serious, age 16.
06:35You've got a two year window before you enter the real world.
06:38So it's time to really think about what skills
06:40you're gonna start focusing on and developing.
06:43By now, if you've done all the things
06:44I've mentioned in this video,
06:46then you should have a pretty solid idea
06:48of what you're good at.
06:49These may seem unrelated at first,
06:52but pick a handful of them
06:53and start stacking your skills on top of each other.
06:56When I was younger, I was talented at selling,
06:59designing mechanics and woodwork.
07:01So I invested my money into different things
07:03that would help me get better at those skills.
07:06Now, I had no idea how I'd link them together,
07:09but I trusted that in the end, it would all make sense.
07:12I'm not really talking about buying courses,
07:14as there's so many fake gurus out there
07:16just trying to scam you out of your money.
07:18With that said, there are some good ones around as well.
07:21Even better though,
07:22if you can find some sort of community to join,
07:24where you can chat and learn, so much the better.
07:27However, the majority of your money
07:29should be invested in equipment.
07:30I remember when my son bought his first iMac
07:33for $500 from his uncle.
07:35He did this with the money he'd saved
07:37from doing part-time jobs.
07:39Because that was the biggest purchase
07:40he'd ever made at the time,
07:42he would sit at that Mac
07:43and learn everything about it.
07:45This led to him teaching himself
07:47how to edit videos and use Photoshop.
07:50Investing in tools like this
07:51can really open so many doors.
07:53Between now and 18,
07:55your biggest aim should be
07:56to develop these different skills
07:58that you can later use to make more money
08:00than someone that just decided to play video games.
08:03This is because you can come into the real world
08:05with some actual value to offer.
08:07This heavily cuts down the amount of training
08:10a company needs to give you,
08:11which takes the burden off them.
08:13Onto age 17.
08:16Now listen to me very carefully.
08:18You need to pass your driving test.
08:20Yes, I know you probably don't need
08:22to drive anywhere at 17,
08:23but trust me, the sooner you do this, the better.
08:27In some states in the USA,
08:29you can do this as early as 16.
08:31Remember, you only need to do it once.
08:34Not being able to drive is one of the biggest things
08:36stopping most people from starting a side hustle.
08:38I mean, what if you have the chance to work with a client,
08:42but they live 30 minutes away
08:43and you can't get a lift every week.
08:45You'd have to rely on public transport
08:47and we all know how unreliable that is.
08:50You'll probably end up getting a bad name for yourself
08:52and coming across as unprofessional,
08:55leading to that opportunity going out the window.
08:57One of my key rules to this day
08:59is to be early is to be on time.
09:02To be on time is to be late.
09:04And to be late, well, that is unacceptable.
09:06So if you're watching this now
09:08and considering driving lessons, do it.
09:10Please don't be that person
09:12that regrets not jumping on it sooner.
09:14Yes, it might be a bit scary at first.
09:17I thought it was really exciting to be honest,
09:19but think about the bigger picture.
09:21Once you've learned,
09:22you can use some of that money you've been stashing away
09:24to buy yourself a cheap starter car,
09:26then nothing's holding you back.
09:28Now it's time for the big one, age 18.
09:32The world really opens up to you once you turn 18.
09:36Now you're officially classed as an adult
09:38and there are so many things you can do
09:40to get financially ahead.
09:41I wish someone had sat me down on my 18th birthday
09:45and told me exactly what I needed to do.
09:47So that's what I'm gonna do for you now.
09:49I've made a checklist of seven things you need to do
09:52to set yourself up for success.
09:54Even if you're over the age of 18,
09:57it's super important you do all of these things sooner
10:00rather than later.
10:01Let me know in the comments how many you've ticked off.
10:04Number one, open your own bank accounts.
10:06Having your own bank accounts that only you have access to
10:09is the first logical step you should take
10:11once you're over the age of 18.
10:13I say accounts because really and truly you should have two.
10:17The first is a current account
10:19or as the Americans call it, a checking account.
10:22This is where your money should flow in and out.
10:25For example, let's say you got yourself a job
10:27at a coffee shop.
10:29The coffee shop pays your wage into your current account
10:32and then you can use that money
10:33on whatever you want really.
10:35The second is a high interest savings account.
10:38This is where you should start building up
10:40an emergency fund of three to six months
10:42of your living expenses,
10:43just in case something out of your control happens
10:46and your income dries up.
10:47It's like when you've chug a big pot shield potion
10:50on Fortnite, but keep some minis handy.
10:53So where should you open up these accounts?
10:55Well, you need to be looking for banks
10:58that don't charge high fees.
10:59I remember I used to get charged
11:01for stupid little things all the time.
11:04Having these accounts shouldn't cost you money.
11:06I also think you should have two accounts
11:08with different banks as it makes your savings
11:11way less easy to spend.
11:13When it's out of sight, it's out of mind.
11:15If you're in the UK, then I'd recommend going
11:17with a challenger bank like Monzo for your current account.
11:20Now this isn't sponsored, but their app is genuinely very good.
11:24For your savings account, Chase is a great option
11:27as they're currently offering 4.1% interest on your money.
11:30So you'll get paid for just leaving your money
11:33in the account.
11:34In the USA, I'd recommend looking at Ally Bank
11:36or Bank of America because they offer minimal fees
11:39and have really strong online banking service.
11:42Number two, get a credit card.
11:44When I was younger, I believed that if you never borrowed,
11:47you'd have an amazing credit score since you never took
11:50out a loan or made any late payments.
11:52It makes sense, right?
11:53Well, that couldn't be further from the truth.
11:57Taking out a credit card when you turn 18
11:59is the perfect tool to build up your credit score.
12:02You can do this by using your credit card to pay
12:05for the things you would normally pay for in cash,
12:07like paying for the gas in your car, for example,
12:10and then paying the card off in full every month without fail.
12:14Using it this way will ensure that you never get charged
12:17any interest at the same time
12:19as building up your credit score.
12:21A credit score is kind of like your Uber rating,
12:24but for money.
12:25Banks look at this and then they decide whether or not
12:28they're gonna give you a loan.
12:29And if they do, what interest rate they're gonna charge you.
12:32Now, lots of people are against the idea
12:34of getting a credit card because they're taught
12:36from a really young age that debt is bad.
12:39I know this because that's exactly what I was taught.
12:42My dad would always say, never a lender or a borrower be.
12:47This was a saying that originally came from rich people
12:50years and years ago to keep the workers down.
12:53As they knew by borrowing, the working class
12:56could create wealth for themselves.
12:58The rich wanted to keep getting richer
13:00and keep the poor in their place.
13:02If I had a credit card when I was 18,
13:04it would have been much easier to get a mortgage sooner
13:07and buy my first property.
13:08I would have also been able to borrow more money
13:11at lower interest rates.
13:13Now, that may not sound significant,
13:16but over a long period, like a mortgage,
13:18this can really add up.
13:20Number three, open an investing account.
13:22The key is to open the correct type of account.
13:25You'll often hear people throwing around terms like,
13:28Roth IRA in the USA, stocks and shares ISA in the UK,
13:33and TFSA in Canada, and supers in Australia.
13:36So if you don't have one of these accounts,
13:38then you're missing out,
13:40as they allow you to avoid having to pay taxes
13:42on your investments,
13:43but they do have limits because they're extremely powerful.
13:47Nowadays, opening an investing account is very simple,
13:50but you can do it all from your mobile phone.
13:52A great thing about these investing apps
13:54is that it actually gives you the ability
13:55to buy fractional shares.
13:57So rather than having to pay $220 for an Apple share,
14:01you can invest as little as $1.
14:03Now, I wish I had this option when I was younger,
14:06as it would have allowed me to get in some early experience
14:09with investing without having to take any big risks.
14:12One of my favorite investing platforms is Trading212,
14:15as they offer fractional shares
14:17and also stocks and shares ISAs.
14:19Since I was planning to talk about their app anyway,
14:21I reached out to them to see if they'd be interested
14:23in sponsoring this portion of the video.
14:26They agreed and are offering a free stock
14:28worth up to a hundred pound to anyone
14:30that uses the code Tilbury when they create an account.
14:33Plus you can get more free stocks by inviting your friends.
14:36Both of you will get a free share
14:38as long as they fund their account.
14:40If you aren't quite ready to invest for real,
14:42one of the really cool things about Trading212
14:45is they let you practice investing with fake money.
14:48You can get familiar with the markets using real data
14:51without risking any actual money.
14:53So if you're a little uncomfortable with investing
14:55or just wanna try out some strategies
14:57before putting your own money on the line,
15:00this is a great way to get started.
15:02Also, don't worry if you've already opened an account
15:05within the last 10 days,
15:06you can still use the promo code Tilbury in the app
15:09and receive your free share.
15:10So feel free to pause the video right now,
15:13get your free stock and then continue watching.
15:15Number four, carefully consider university.
15:18So many teenagers have asked me,
15:20is going to university a scam?
15:22My answer is always yes and no.
15:26On one hand, for some careers,
15:27you certainly need to go to university
15:29like doctors, nurses, and teachers.
15:32There is a direct result
15:33from doing university courses like this.
15:35You get a degree and the career path opens up to you.
15:39These professions play critical roles in our society,
15:42directly impacting the way we function.
15:44So are absolutely not a scam.
15:47I actually think these types of courses should be free
15:50and reserved for the people with the best grades and passion
15:54for following one of these careers.
15:55However, on the other hand,
15:57there are a lot of other courses out there
15:58that don't open up job opportunities directly.
16:01And therefore, why waste your money,
16:03and more importantly, your time studying at university
16:07for something you don't really need.
16:09Skill traits like plumbing, entrepreneurship, and tech,
16:12well, they don't require a degree.
16:15It's more about how good you are at what you do.
16:17Your track record and results will speak for itself.
16:20I mean, I read through my comments on here,
16:23and I've seen lots of people claim they've learned more from me
16:26than they did in their business degree.
16:28Now, that really says a lot.
16:30For me, and for a lot of other employers,
16:33it's more about your practical experience and attitude
16:36than anything else.
16:38So please, don't be pressured into going to university
16:41to study something you don't care about
16:43and waste four years of your life.
16:45I mean, I heard there's a golf management degree now.
16:48How ridiculous.
16:50Personally, I love golf.
16:51I just won a major competition
16:53called the Duke of Edinburgh Cup.
16:55I didn't need to go to university to learn how to play,
16:57or manage the game.
16:58It's laughable, it really is.
17:01Look, if you really don't know what to do with your life,
17:03my advice would be to get an apprenticeship.
17:05They were huge back in my day,
17:07and they're coming back and getting more popular than ever.
17:10Plus, you get paid while you're learning.
17:12It's a win-win situation, if you ask me.
17:15So although schools and maybe your mates
17:17will try and push you to go to university,
17:19think about what you really want.
17:22Think about the 60 to 100K debt
17:24that you could have wrapped around your neck,
17:26and ask yourself,
17:27is it worth paying that off for the whole of your life?
17:30Number five, avoid bad debt.
17:33Debt is like a heavy anchor that drags you down,
17:36slowing your progress,
17:37and holding you back from reaching your full potential.
17:40Don't get me wrong.
17:41In some cases, you can use debt to your advantage,
17:44like when buying a property, for example.
17:47Taking on a mortgage to buy real estate
17:49can be a really smart investment,
17:51because property can go up in value as time goes by.
17:54By using this debt strategically,
17:56you can leverage this borrowed money
17:58to have access to these assets
17:59that will hopefully increase your long-term net worth.
18:02The same goes for having your own business.
18:05If you borrow money to start your own business,
18:07and it takes off, you can make some serious profit.
18:10Without that initial money, you might never be successful.
18:14I know that was the case for me
18:15when I opened up my first radio control model shop.
18:18Without a loan, I simply couldn't have started.
18:20However, there is a type of debt you should avoid
18:23at all costs, and this is consumer debt.
18:26If you can't afford to buy something outright
18:29that isn't going to create wealth,
18:31then you shouldn't buy it.
18:33A lot of people finance their cars,
18:35and this is just one example of where borrowing money
18:38actually leaves you worse off in the long run.
18:40Here in the UK, a shocking 2.2 million drivers
18:44finance their cars, and I'm willing to bet
18:47most of them are stuck in this money trap.
18:49I understand that you might want to drive a certain car.
18:52Now, I love cars, so I totally understand that.
18:55I get it, but is it really worth it?
18:58Just something for you to think about.
19:00Number six, start a side hustle.
19:02Most people's advice when you turn 18 is go and get a job.
19:06They make it sound so miserable,
19:08and it's like you get no choice with your life.
19:11That's what you're expected to do.
19:13Go to your job and be miserable.
19:15Well, let me tell you, it doesn't have to be this way.
19:18You don't have to wake up every morning
19:20thinking that you're stuck and not progressing.
19:22If you follow this video so far,
19:24you'll have some valuable skills,
19:26and you can use them to start a service-based side hustle.
19:29This type of side hustle is great.
19:31Think copywriting, video editing, videography,
19:35web development, and community management.
19:37All of these require very little startup money.
19:40You just need to master the skill inside and out.
19:43If you haven't got a high-income skill yet,
19:45then you really need to catch up.
19:47So no matter what job you go and get, leverage it.
19:50Use the skills it gives you and the money you make
19:53to transform your daily grind into a launch pad
19:56for greater things.
19:57Even if you can't learn any skills from it,
20:00use it as motivation to put in the extra work on the weekend
20:03to learn a valuable skill and improve your current situation.
20:07Start viewing it like this.
20:09Every shift you dread is the investment towards your future.
20:13Number seven, invest for the long-term.
20:16Compound interest is an extremely powerful law,
20:19especially when it comes to investing.
20:22It means that not only will you earn interest
20:24on your initial investment,
20:25but you also earn interest on the interest
20:28that you've already earned.
20:30This can lead to your money growing bigger and bigger
20:33over time.
20:33It's like when you create that snowball
20:35and roll it down the hill,
20:37it just keeps getting bigger and bigger and bigger,
20:39the more snow that's packed onto it.
20:41For example, let's say you invest $250 a month at age 18
20:46into a Roth IRA or a stocks and shares ISA.
20:50Assuming an average yearly return of 8% by the age of 65,
20:54your investment could grow
20:55to approximately $1.5 million tax-free.
20:59Now, if we compare this to someone who starts investing
21:02in the same amount at age 28, by the age he's 65,
21:06their investment would only reach around $679,000
21:11under the same conditions.
21:13That's less than half the amount.
21:15See, those extra 10 years of compounding
21:18really boost the final amount
21:20because there's more time for interest
21:22to build on interest.
21:24So the younger you start, the better.
21:26Not only will you have time on your side,
21:28but you'll also typically earn less at a younger age,
21:31placing you in a lower tax bracket.
21:33This means you'll keep more of your earnings
21:36because you won't be taxed as heavily
21:38compared to when you earn more later in life.
21:40If you wanna dive deeper into how to pick the best stocks,
21:43then watch this video next,
21:45but don't click on it just yet.
21:46Make sure to subscribe if you wanna grow your wealth, okay?
21:49I'll see you over there.
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