The Complete Steps to Invest in Stocks

The complete guide, in detail on how to invest in the stock market.

Join us inside Investing Bootcamp, get support along the way and become a confident investor here: www.investingbabe.com

xo
Simone

-----------

As always, Kiss My Money and Ms Wealthy exists purely for educational purposes only and should not be considered financial or investment advice in any way.

Listen in here, and where you get your podcasts:

Prefer to read the transcript?

You're here because you want more out of life, more money, pleasure, flow, and freedom, luxury. We are all about an unwavering Southwest and a network. You love to talk about. My name is Simone Mercer-Huggins. I'm your resident unapologetic wealth queen. So far I've built seven figures from the ground up. And these community is now doing the same. Ms. Wealthy movement is here to help you be more of the bad-ass queen. You were born to be so tune in for everything, investing money, energetics, millionaire, mindsets, and everything in between. If you want to be a powerful player in the money game, in the right place. Welcome to the kiss, my money podcast.

Sure.

Welcome back beauties. Hey, it's been a second. Since I've been on here, um, a lot's happened, I've been featured on Yahoo finance. I kind of jumped into the tic-toc bandwagon. That's been fun and interesting. Um, what else? You know, just some summer starting in Australia and later to Christmas, and now I'm really seeing that. I need to provide you with some clearer step-by-steps to really help you put the one plan in one place. So I do have a couple of episodes previously, where I've taught, I've spoken about how to invest, and obviously I know a bunch of you binge listen, and I love hearing from you when you tell me these amazing stories. And when you tell me that you found me on the podcast and I love how this has just been spreading to so many areas of the globe. Recently, I got the Spotify, what do you call it?

Info on the podcast reach and it's listened to in 26 countries. So I'm just humbled and grateful. And honestly, if it weren't for you, I wouldn't be doing it. So thank you for tuning in and for being here and for supporting it. And remember, I would absolutely love it. If you could head on over to Apple, honestly, wherever you do your reviews and drop a review, iTunes is the best area. Most people listen to Nigerians, but I would love a review. Think of it as an early Christmas present. I would love it so much and make sure you drop me a note on Instagram and let me know. And, um, it really helps to spread the word and help other women invest and normalize money for women. And start this conversation early. The earlier we do it as, you know, the more we have combined interest to grow money and make more money.

Okay. This episode is going to be the six steps to invest. Obviously it's still going to be an, I have a full program called investing bootcamp, which teaches you the in depths of it. So whilst this is an overview, I want you to at least see this as the stepping stone or as the basics, or as even just you using the first step and just seeing what it kind of looks like. Okay. So I'm going to go through each one in a little bit of detail, and then let me know what you need more detail on a lot of it. It really is, and this is partly why I have the programs. It is a little bit difficult to talk about without showing visuals of what things actually look like and to actually navigate things, um, the websites or brokers or breakdowns of different things.

But I'm going to give you the overview so that you have the exact step-by-step plans at plan, and let's go from there. Okay. So the first thing, first things first always is to get your money, sorted. That means your Mo your accounts. So actually managing your money correctly. Now this is the precursor to investing, but it's also a requirement of you becoming a long-term investor. Yes, you could start investing, but if you don't have your actual how to manage money, just as a, like a basic, uh, it's not going, it's going to feel hard. It's going to feel like you want to tap into your investment account when hits the fan or an emergency happens, or you don't have money necessarily right there when

You're in

A rock and a hard place. And then you might be tempted to dip into your investment account. And that's not the point we want to invest with money that we are not planning on touching. Now I know that depending on your goals, that'll be different. Maybe you want to say for a car, I never want to say for a house and switch your investments from stocks to property. And that's totally fine. But if we are using an investment account as kind of like another money account, that's not the point. And so the reason that you also have to get your money, sorted is because you have to understand debt for one, but also moving through as you become an investor. It's not a one-time thing. None of this is a one time thing. Okay. I cannot say that enough. I can't stress it enough.

I really want you to think of investing as you do it consistently over your entire life. This is the start of your journey. If you haven't started, started investing in stocks yet. And many members in that have joined bootcamp have actually gone on to become traders. And I know that you've probably heard me spoke about me, myself, becoming a trader after I became an investor, because I had the investing knowledge as a solid base. Um, because they have that as a base, they can go on to become a trader. You don't have to, it's an option, um, for, for you to become a trader, not a day trader, but a system trader, um, to understand the markets even deeper. And it obviously it's more time consuming. It's only suited to some people, but none of that can happen unless you're really clear and confident with your day to day money, particularly as a female entrepreneur, separating your business money with your actual personal income and getting clear on, uh, paying down really any debt over 8%.

So we want to have two things, a buffer account, meaning an emergency account, start with a thousand dollars and then move on to about three, three months of, um, income to cover you. I'm going to be a hundred percent transparent. And I've said this before. I don't have three months of income, partly because we we're just set up. Now I did early in the early days because I was also not the best to say with money and money flow, but now I am very confident in my ability, if something, if something were to hit the fan and things were to just blow up in my face, that we have a couple of things that we, when I say we, uh, my husband and I, because I manage our investment accounts, I manage our combined money. We invest together. Yeah.

And some things is separate. Um, and so

Basically I just, I don't have three months because I don't stress about money in that way. And that's partly a mindset thing. It's partly that I'm just, I don't manifest emergency emergencies happening in my life. Um, I, you know, that I'm deeply spiritual and I talk, I talk about the quantum field and what we are our intention and what we actually put out into the world. And I talk deeply about that in abundance align my other program. Um, but as a practical standpoint, depending on who you are as a person and how you run your life. For example, if you have a business or if you're a freelancer where your income does fluctuate, then obviously having a lodger buffet is going to be more important. If you have things where you do shift work, or you're a casual and your income fluctuates, if, uh, for example, you are uncertain about your partner's finances and you manage your finances together.

If you are really sure that you have some upcoming expenses and you're kind of stressed about if that's going to cost more than you are budgeting for, then obviously having more of a buffer is important. It's going to depend on the person. And this is where I say partly trust yourself, but also work on your money mindset too, because they, they, they work hand in hand. But I really want to point out that when you get your practical money sheets ordered your accounts, sorted, how to manage your money, it really does help with your actual mindset. They, they work in reverse and together. Uh, so work on both as well. I have a lot of, um, mindset books, money, mindset, books, to help with that head over to Instagram. I have the full list there. And I also have a button to align when you want to, if you ever want to work deeper into uncovering your blocks and working through your money mindset, but they really do work hand-in-hand.

So what is the money set up that I would encourage, uh, because I would need to be super clear. I don't encourage buds budgets. I think that they don't work at all. They're kind of like restrictive diets when you yo, and then you rebound, and then you ended up putting on more weight and you just end up more in debt and then you freak out and then you beat yourself up. And then it creates this like ridiculous emotional cycle that puts you more into that. And restriction never works because what happens with the brain, the way the brain works. When you tell it, you can't have something is gray. Now I want more of it. Kind of like a toddler is literally your inner child. You want unhealed in a trial and it's normal. So restriction and crappy bushes don't work at all. Um, I also don't encourage using like spreadsheets where you have to track every single dollar, like wha who has time for that.

Um, also don't work. There's a lot of data and research around how they, most, for most people, the majority of people, it just it's, it's not something that is useful long time. It's not something that people can stick to. It. It's not something that you are excited about. So the money system set up the money management mastery set up that I teach that you get as a bonus inside investing bootcamp is essentially based on the 50, 30, 20 rule. I have kind of my own version. You probably heard it from other people. If you're in Australia, would have heard it from Beth investor. Um, if you are in the U S you would have had her from a bunch of other people that teach it as well, but it's basically that you have about 50% for living expenses, about 30%, um, for, you know, future wants and needs and stuff like that.

And then 20% also for financial, for your financial freedom account, there are different methods to use this. And this way I broke it down a little bit further, um, by separating kind of wants and needs a little bit more and different things in my life have different accounts, meaning sub accounts. And this means that using a system 50%, 30%, 20%, uh, it means that it actually grows with you and works with your income, so that as you progress, and as you earn more, it grows with you, right? And ideally, as you earn more, your income, doesn't increase, sorry, your expenses don't increase proportionately. Um, so they might increase a bit like, you know, you move into a nicer place or maybe you'll get, you know, nicer clothes you'll have got to nicer restaurants, of course, but it won't necessarily increase at the same percentage, meaning maybe it'll only increase, you know, 5% or whatever, and then you'll have more left over.

It'll feel more luxurious living that life. And it won't feel so, uh, restrictive or annoying that you can't put savings away. So most people say at this point, Oh, 20% to save for financial freedom, meaning investing. When I say save, I don't mean like save for future, um, desires because that's in the 30%, I mean, literally say for your financial future to grow assets, build up assets, meaning a stock portfolio, real estate, or both, or other assets as well that pay you an income. Once they reach a certain amount, really any asset can pay you an income, but obviously the larger that asset value is the more it can pay you. Right? So when we think about dividend stocks as passive income rental income from real estate, the more that you build that up and grow that the more that you have to live on and pay you.

So the point is to build up, up, up as much as you can, as fast as you can so that you can leverage compound interest because it's insane. And then you're in a position where you don't have to work, or you can work if you want to or whatever, that's, that's the aim, that's the goal, but also doing it where you're still living your freaking life. This is not about insane restriction or not going out to dinner ever. Or if you have debt like credit card debt, or student loans, or a personal loan or anything like that, telling yourself that you can't still buy nice things, you can't still go out to dinner. You can't still have a coffee, or you can still buy an item of clothing that kind of Dave Ramsey advice is unfortunately restrictive, which again comes back to that whole restrictive diets that don't work and then actually make us rebound more.

But also it puts you in a shame cycle where, how could you possibly have spent that you're such a bad person for spending that money. You shouldn't going out to dinner because you have some credit card debt. Okay. Here's the thing it's about both. There's technically no such thing as balance that exists. I know that that word is thrown out a lot, but essentially as close as we want to get to it, it's about balancing living now and still enjoying the things of life and why we are actually living and still building for our future. At the same time. It's not all one. And you will become resentful if you put all of your money and into everything, into paying off your debt, for example, uh, or investing and not actually having any to enjoy now, which is why that the 50, 30, 20, or any combination of that works so beautifully.

And so well, because it still allows you to do that, to live life now and save. Now, if you're at this point where it's like, but I can't save anything right now, 20 saving 20% for our financial future or to invest is like crazy. Now, I always say that that FFA account, that 20% first goes off to pay down debt, particularly debt over 8%, because with the stock market, you can, you know, between eight and 10%, I mean, they say 10% on average year on year. And yes, that counts, you know, after we've had crashes like 20, 20 COVID and the 2008 global financial crisis, um, housing market bubble crash that does still include when we have crushes like that. You can, it's a, it's about 10% over the period of when the stock market first began. So when I say eight to 10%, it's meaning if you're investing in other assets, not all a hundred percent stocks, for example, bonds, because you might want to be more conservative with your approach in terms of your risk tolerance.

Okay. I know I'm kind of going off on many tangents, but I want to explain why, because they all are so interrelated with each step. So that's why we say, uh, debt, any debt over 8%. Now you can use two methods here, the snowball method or the avalanche method, um, both have their merits. I encourage you to Google and look up both. I talk about both in investing bootcamp or sorry, in the money mastery program. And sometimes there's a really large psychological benefit to using one over the other it's individual for the person. And I really don't want to discount the impact of mindset here. When you have such a strong mindset, because you are celebrating yourself and you're so happy that you pay down, you know, whatever that chunk of a credit card or that one Afterpay thing. And it really builds momentum for you to continue.

Then that is really worth it. So it's not always just about the, when it comes to snowball over lunch with debt payoff, that what is the best one in terms of numbers, the mind mindset piece really does play a freaking huge part of it. Okay. So once you've used all of that and you've got your accounts set up and you've paid down your debt over 8%, and you're really happy with, you know, your buffer account, and you're pretty comfortable with your money flow. And you've got some now money in a FFA account or financial freedom account in savings. Now you're ready to start investing. Yeah. So I kind of say between 500 to a thousand dollars to start investing with, can you start with less? Yes, you can. You can buy really one stock or you can buy one ETF. Uh, here's where I don't necessarily encourage that one being broker fees.

Now, then the question comes in, but what about really low cost brokers? Like Robin hood? I don't encourage Robin hood. Um, it tries to game-ify people, um, to try and make it uses the platform uses different things from a psychological perspective. And don't think that this isn't true because it is literally how Instagram and Facebook was built to make you addicted to the platform, right? It uses different psychological tactics to encourage you to trade more meaning, buy and sell, and they essentially make money off the spreads. The difference between what money, what someone is buying or selling for when someone is buying for. So there's always a small percentages. So don't think the not making money because they are just because you're not charged as a fee. You are still paying money. I don't encourage that as an app for long-term wealth building. There are many others that I talk about in investing boot camp.

And I'll talk about it more on step five in this episode, which we're getting to soon. Uh, but the first step is actually not choosing a broker. The first step is going okay, what do I have to invest in? So you can start with smaller. Uh, however, I encourage you to kind of build up at least ideally 500 to a thousand dollars and then get really clear on all right, what are my financial goals, which is step number two. So once you have that, building that money in a buffer account, you're funny, what are your financial goals? And this is really important because it dictates how you are going to invest, dictates you as an investor. So what I'm seeing a lot on Instagram, YouTube tick-tock is people basically spamming each other with just go to Robin hood and sign up with my link and you get a free stock.

And I really want that to stop. I can't stress that enough. The reason being is it's not actually encouraging first and foremost, how you want to be as an investor. You might not even decide that you want to invest that way using a broker, because you don't have to use a broker as an investor. And so it's not actually setting you up successfully long term. It's kind of really like quick reactive. Oh my God, which is the exact opposite thing of how you build to become a wealthy, successful impact investor. It's not rich mindset. I know that sounds really harsh, but it's just not. And I want you to see the investing at the long-term thing, not reactive. This is something that I learned from my trading mentor. And he said to me, I learned this in, when it came to kind of like trading and it was way after I became an investor, but this quote is just so brilliant and so perfectly true that I really use this in so many parts of my life now.

And it's this, when our emotions go up, our intelligence goes down. So our emotions and intelligence are inversely correlated is the fancy way of saying it, which is the actual court. But essentially when we have heightened emotions, our intelligence drops because we're in the moment are intelligent that part of our brain and we are all intelligent. So don't think that you don't have that in you. But when, when in heightened emotions, when not using the intelligent part of our brain, we're not using the rational part of our brain, which we actually need to make informed, intelligent decisions when it comes to investing. So things quick. So I don't have to Robin hood and jumping straight to this is, this is the broker you need is actually a, the wrong answer and B not solving the problem because we're not first looking at what are you doing this for?

What are your goals? What do you want investing to do for you? And there are a couple of strategies, one being growth. So you can invest in a way that builds wealth rep more rapidly, um, or you can invest for passive income. And that starts shifting as you get to a point where you have amassed enough assets, where you now want your assets to just pay you an income like rental properties, they pay you income, right? So there are different strategies and it's going to be different based on you as an investor and what your goals are. Maybe you want a combination of both because of your risk tolerance and how you want to determine, um, how to balance your portfolio. I know this might seem a little complicated, but it's actually quite basic. Uh, and we just have to get clear on what that is for you.

Some people are much more adverse to risk and they want to take on a more conservative approach. And some people are much more open to taking on massive risk, but also with what, with that comes a potential upside for more reward. Now, I want to point out too, that depending on what your goals are like, for example, if you want to build a stock portfolio to then eventually buy a house, or if you are investing for your kids or really anything, I want to look at like what your goals are here, but also how you want to be as an investor. Maybe you're a mom of three and you run your own business and your partner isn't around a lot because he flies in, flies out for a job. And so you want to take on the investing responsibility, cause maybe he's not interested. And so you're like, I don't have time for it.

I want to do it, but I didn't have time to be in it. Right? And so that's where apps like Robin hood or more hands-on brokers are not going to be the option for you because you need something that is more direct, more automatic, which Robin hood is not. So things like automatic index funds where you can invest regularly. And you literally do not have to touch anything because it's an automatic transfer that goes from your bank into the index fund. That can't happen with a broker, particularly a low-cost, um, broker like Robin hood. So this is where we, why, why we're going to get really clear on our goals. What am I doing? How do I want my investments to actually work for me? Not the other way around. So how, who do I want to be as an investor? That's step two goals.

And who do I want to be? And how, how do I want this to look for me? Then? Step three is your risk tolerance. Okay. How much risk am I actually willing to take on? How conservative am I? How scared am I? How fearful am I? Part of that does come into your knowledge and education around investing. And once you have more, the more confident you are genuinely trust me, I've taken enough women through investing bootcamp. Now that they go from I'm so scared. I don't even know what an ETF is and that's okay if you don't too. Oh my God. Oh my God. I've just grown. I've just literally gone from a thousand dollars to $40,000. I keep putting money in. I've increased my risk tolerance. I'm putting more money into more growth stocks. Like I don't even care about micro fluctuations. I don't even care when I see the news or things dropping.

I totally understand how the market weight, like the turnaround is very rapid. Once you have the knowledge that I guide you through, but also when you're surrounded in the group by other women doing the exact same thing, and that becomes your norm. So your risk tolerance will change. Okay. So don't get too caught up on this, but it's essentially, am I more conservative? Um, this is based on a couple of factors. Firstly, it really is a personal thing around your psychology and how you approach things. It's also based on your age. It can come into it. But also I have a member in investing bootcamp that is in her sixties and she has a more aggressive risk tolerance, mean meaning she invest purely in growth stocks with no other, um, lower risk options like bonds, for example, and other people that, uh, in the thirties, uh, more conservative with their approach.

So age can play a role, but it doesn't have to. The other one is what is your setup in terms of your family? Does that play a role? Uh, do you have expenses coming up or major life things coming up, for example, like maybe if you're having a baby or your income is going to change, uh, and is that going to determine your risk tolerance and how you're going to be as an investor remembering too, though? A lot of people think about risk tolerance in terms of a short term thing, just because you're more conservative doesn't mean there aren't going to be dips, right? Um, just because you take on a more conservative approach, but if you are more conservative, but you're going to be investing for 20 years, then there's actually a balance of, well, why don't we put you more into a growth investment because you're not going to be touching in any way.

And then as you approach towards the end of when you might want to be taking that money out or using that as income, then you can start moving or switching your investments to something that is more conservative, right? So you can change as an investor. And as you get older, you can start putting more money instead into growth assets, into more conservative assets. And so your portfolio starts shifting more towards something that is more conservative as it progressive and as you grow it. So there are just because you start off one way doesn't mean that you actually have to continue that way. Investing is a very dynamic thing. You can shift it at any time and you can change your strategy anytime. And you know, you can, you can move it and rearrange it and it's perfectly normal. And okay, so those two things, number two, and number three, your financial goals and how you want to be as an investor and how you want it to work for you and your risk tolerance essentially inform step four, which is why we have to do it in this order.

We have to do it in one, two, three first before we get to step four. Okay. And stiff or his assets. So what assets are you actually going to invest in? There are many different assets, but obviously we're talking here about the stock market. Now, when I say the stock market, it doesn't necessarily mean stocks. So it's often a misconception that the stock market is just purely stocks and it's not, you can buy many things on the stock market. One of them being bonds. So that is government backed. Essentially. It's an IOU, it's a loan from, from the government, the government saying I'm borrowing money. And it's essentially one of the, to safest aside from cash, um, ways to invest the challenge right now is that bonds are not yielding a lot because interest rates are so low yielding, meaning paying a lot in terms of growth or income.

So it's not currently in an investment that is really paying off for the longterm because so many governments have deepened debt, but it's not very valuable. And you'll also probably be seeing that also with savings accounts that most people think that a high yield savings account is the way to go, but it's never going to build your wealth. It's probably also at the moment you're losing money because inflation is higher than the return you're getting in a savings account. So you're actually theoretically going backwards in terms of your net worth over time, unless you're actually investing in higher growth assets, like the stock market, specifically stocks or, or, and, or real estate. Now you can invest in real estate on the stock market. You can also invest in commodities on the stock market. Commodities are things like silver, gold rice, you know, beans metal, um, all around the world, internationally with trading commodities to build and create and eat and everything like that.

So commodities that are very specific asset type. Um, and it's not necessarily something that you need to invest in unless you are particularly not the knowledgeable in an area. But when I talk about the stock market, I tend to talk predominantly about stocks. And obviously you own a piece of the company. You literally are a shareholder, you own a share. So you own a slice of that pie, a slice of that company. And as a result, the company that you're investing in gets to grow and build and re-invest and hire people and pay dividends to its shareholders, meaning you, or invest back into the company so it can grow and evolve, right? So normal companies like Google and Amazon and Apple and everything else in between. So you can invest in many different assets, real estate on the stock market, uh, can be things like you can invest in something called, excuse me, colder REIT, real estate, investment trust, meaning you of pool money and, um, invest into a fund that invest in real estate, like things like commercial or even residential property.

And then the aim is to most of the time pay you an income in the form of a database dividend. Um, the strategy here is a little bit different because it's not focused necessarily on growth most of the time, most of the time it's focused on income. So it's not always something that I tend to look at. I talk more deeply again about this investing bootcamp in terms of what rates are. And if this wants to be something, part of your strategy that you like, some people just prefer property. I have a physical investment property that I invest in as well as a stock portfolio. Uh, and I prefer doing it as a physical, um, in physical real estate, but stocks are definitely still my preferred way of growth. I see a higher return on stocks. They're a lot less costly in terms of they're expensive.

I mean, expenses, the amount of money we've had to sink into one of our investment, Oh, a current investment property. We were looking at buying a second has been actually a lot. There's a lot of upkeep and management expenses and ongoing expenses. And that just doesn't tend to come with the stock market. Then we had a tenant that didn't pay rent for a really long time. So to me, real estate is way more of a headache, um, to, to grow and manage. I much prefer stocks, but it's sometimes it's personal preference. Anyway, the point is step four is determining your assets. And that is going to be on two and three, which is your risk tolerance and how you want to be as an investor. Okay. So most of the time it's, most of the time is going to be a combination of stocks and bonds, if not a hundred percent stocks.

So then we move on to step five, which is actually investing. So what happens here? This is where most people and a lot of there's a lot of misinformation in the market about investing in the stock market. So a lot of the misinformation comes from people, Trump or well, firstly, believing that you have to stock pick, meaning, analyze, and look into individual companies and pick the right next Amazon, or pick the next Google pick the next Facebook and on and on and on, uh, and trying to determine which stocks you're meant to buy, to build a stock portfolio. Right? And so there's so much noise, so much misinformation, so much information about how to stock pick, essentially, here's the thing I want you to hear this 96% of fund managers fund managers don't beat the market. So people whose full-time job is to pick the right stocks they've gone to and got formal qualifications on to, uh, get the knowledge on the way the economy works and how the stock market works.

And literally building a portfolio, um, and deep analysis into the stock market and individual companies. This is kind of like the Warren buffet way, right? But Warren Buffett is a unicorn. I'm trying to explain it really simply without using like boring technical jargon, that really is irrelevant. And doesn't matter. Uh, Warren Buffett is a unicorn and he's, he literally literally started when he was 11. So most people are kind of get to their thirties. You know, Warren Buffett has 20 years, 20 years on people. Uh, but so if 96% of fund managers don't beat the market, what makes you think that you can pick the next stock? But most people do it this way because it's literally a psychology, psychological bias that happens in most people. Most people think they're more intelligent. Most people think they're a better driver than everyone else. Most being that thing, cook a bit, chef, all that sort of stuff.

It's actually a proven psychological bias that keeps people in this loop of thinking that they know what the next stock is going to be. 96% of people that do professionally and as a full-time job, don't beat the market, the market, meaning the index, the S and P 500, for example, even Warren Buffett himself bet with a hedge fund manager that, um, they would not be able to beat the index the market, uh, over 10 years. And he won the bet because it's proven time and time and time. And again, there's so much data on it. It's like it's insane. And yet most people would try and stock pick and pick companies that are going to be the next big thing, right. And they lose money, or it doesn't go their way, or maybe it makes a little bit better money, but they don't actually check it against the index of what they could have made.

Um, so this is where a lot of the misinformation happens. Thinking you have to stock pick, which is a lot of honestly, a lot of the daunting and overwhelming and confusing information because who wants to even anyway, spend their time analyzing companies in terms of company reports and P E ratios and different financial numbers to determine the health of a company, to determine how well they're doing, really essentially try and predict whether that company is going to be a potential growth. Now, can you make money doing it this way? Yes. I do know some people

Who

Have the ability because of what they've studied, they have a very analytical mind. Um, they enjoy spending all of their time doing that. They have old con every conversation they have is, you know, talking to other people, uh, about how different companies are working. They're deeply interested in macro trends of the world. If that's not, you, there's nothing wrong with that. That doesn't make you a investor. That doesn't mean that you can't become wealthy. And anyone who tells you that you can't doing it that way, please run because it's not true. There are so many ways to build wealth and it's not through stock picking if that's not what you're deeply interested in and want to spend all of your time doing. So what is the way is what is called index funds or ETFs and index fund is a collection of different companies that are top performers in terms of market capitalization and growth.

And they essentially fit well. Um, they are the top, for example, 500, like the S and P 500 S and P stands for standard and poor. It's a company that has been around for decades and decades, that it's essentially a ratings agency and they use different metrics to determine what fits into the top 500 company based on a cut a few metrics. And so what happens is only the top companies sit in that index and there are lots of different indexes around the world. There is an index for every single stock exchange Australia, uh, the different, the two different indexes that exist in the U S the NASDAQ and the NYC, the London stock exchange, literally every single index. Okay. And then there are different indexes. So we have specific sector indexes. You might have a tech index. You might have, um, you know, a medical index. You might have a different, like a real estate index. You might have lots

Of different ways

That you can analyze different metrics.

You'll have to excuse the noise. I have all of the windows open because it's so muggy.

So hot here at we're heading into summer. And,

Um, so

Because a lot of noise going on in the street, because what else, her approaching Christmas, and which is a fun time of year, but

I'm just going to go with it. So

What happens is when the companies are not in the top market cap or top performing, then they fall out of the index over a period of time, depending on the index. That kind of re-evaluated every three to six, sometimes 12 months, like the Dow Jones, for example, um, which is the top 30 companies is something that is a lot more, a lot slower to analyze and

Pull we'll put in new

Companies or take out new companies at what is considered the top 30. The Dow Jones is just another index, really. Um, sometimes I think they do it every one to two years, but that's not cause for concern because when you're looking at these companies, these are standing companies that are building over time. Remember investing is a long-term play. Uh, you know, Facebook was around, for example, in the stock market for years before it started to gain any traction, same with Amazon, same with Google. Um, same with Bitcoin, like all of these exists before it starts gaining mass traction. And so people think that, you know, they've only exploded onto the stock market. Not always, not necessarily. So the way really is through index funds or ETS, unless you want to be a deep leap into becoming a fundamental

Investor. And there are ways to do that. There are books to do that. Fundamental investing is what was working at before deeply analyzing stocks to determine a portfolio, but you can't just do that on one, you cannot buy just one stock, one company, because you're not diversified. What if that one company that you've banked all, everything on doesn't perform well. So the worst thing you can do is put all of your money in one basket. So you have to do it for multiple companies, but you don't just have to do it for buying. You also have to make sure that you're on top of those companies and determined when you exit those companies. And this is why index funds and ETFs works so beautifully because you don't have to do any of that stuff. It is done for you. And is it is the market.

And remember 96% don't beat the market. So it is the way to become a lazy long-term investor and still build wealth and grow wealth exponentially over time. It's proven time and time and time again by wealthy investor, after wealthy investor, after wealthy investor, the challenge here, as I'm telling you, this is, there are so many indexes around the world, and there are also so many ETFs around the world, literally thousands, thousands, and thousands, and thousands of ETFs around the world. And indexes, not as many indexes, but ETFs definitely. Now that the only difference between an ETF and an index fund is an ETF is a fund trade traded on the stock exchange, just like a stock. So, um, it means that essentially they can come up with different ways to package all of these top into different ETFs, right? It doesn't make them wrong, but there are definitely some ETFs out there that are not advisable.

There are some ETFs out there that charge huge fees that literally when you look at the companies that are actually in them and not actually the way to go. And so this is now what we're starting to see as the danger, when people start going, just buy an ETF isn't that is actually only part of the equation, right? So the question then becomes, well, do you want to invest in ETF or do you want to invest in index? And then which one, firstly, come back to step four. When we look at what your actual assets, um, because then we go, right, let's find the index or ETF that matches that. And we want to look at the top companies, companies like Vanguard or BlackRock that offer these index funds that have been around for decades and decades, Vanguard being the longest standing index fund provider.

In fact, the wealth first, um, they have been established for so long. Warren Buffett even calls the founder of Vanguard, Jack Bogle, literally his hero. So, you know, when they first came out 40 years ago, I think it was, it was, you know, people, um, he was criticized for it as most things happen that way when it's something new and people are scared of it. But now of course, everyone says, invest in index funds. The challenge here is you have to understand which option is going to be best for you in terms of an index or an ETF, because one is a little bit more,

Hands-on

Being an ETF because you have to have a broker to buy an ETF with an index fund. You do not have to have one. You can buy direct three directly through index fund providers, such as Vanguard. So you can go direct in the U S you can start with $3,000 in Australia. It's,

Um, it

They've just introduced something new. Actually it was $5,000, but now you can actually, uh, start with $500 through Vanguards platform, but only through ETS. So it's still $5,000, um, through index funds, but you can start with 500 through ETFs for free on Vanguard's ETFs. In, in that platform, uh, in the UK, it is, it was 3000 pounds, but I think they've actually dropped that recently to 5,000 pounds I'm would get, I don't have the details in front of me, but I have all of that information in my little black book, which I provide of the exact ETFs and index funds too. Because like I said, there are thousands to sift through of what I see as being the top and the best and the longest standing and the lowest fees, because that's such a big part of it. Um, which is what I teach again, invest in boot camp.

So that is kind of where we get to with step five, it's determining which method is best, meaning index funds or ETS. Then determining if it's an ETF choosing a low cost broker, I still really love Vanguard. Um, there are different options depending on where you are in the U S or the UK or in Australia. And I have a list of them, but which I talk about for different reasons. Um, and I think I'm probably going to do a post in it because it involves a little bit more information, but I talk deeply again, I mean, investing bootcamp about which broker, uh, then once you actually do that, then you start investing in, invest in your chosen fund that is matching your asset allocation, which we determined in step four, based on step three and two, you starting to see how, why it's really important to get all of the earliest steps done before we get to this point.

And so once you are done with that, once you start investing, whether it's with 5,000 or 3000 or $500, then you set up a plan to continue beyond that. Because what did I say at the very beginning investing is not a one-time thing. We don't do it once. That's not how you build wealth. It's actually built over time by doing something called dollar cost, averaging dollar cost averaging essentially means you regularly contribute money ongoing over time regularly that the key word here is regularly. Basically you want to do it regardless of what happens in the stock market, regardless of crashes or corrections or dips, or literally anything. The point is that you average out the dollar that you invest by taking advantage of every dip or correction. Sometimes you are buying at the high before a dip, and sometimes you are buying at the bottom of a dip, and sometimes you buying halfway up the rally on the other side, when you're coming out of a dip or a correction.

But the point is that you average out the dollar that you were investing in because no one can predict the market. No one holds a crystal ball, anyone that does say that they can, and they do know what's happening. No, very few people, very few people can actually predict what is going to happen with the market. Uh, for example, uh, I got, I love this movie. I just watched it again the other day. And I remembered how amazing the movie is. It's called the big short, if you haven't watched it yet, go and watch it. I think it's on Netflix. It's such an incredible movie in it. It tells you essentially the lead up to what happened to a few people that predicted what was happening and saw what was happening with the 2008 global financial crisis and corrections like that. Mako crashes like that happen on average every seven to 10 years.

So the one that we had just had in 2020, which is by the way, pretty much, depending on where you are in the world, in the U S it's already rebounded and gone past where it was before it's started dipping in Australia. It's now approaching. So depending on where you are, the market's almost already completely re corrected when it's happened. So incredibly fast, faster than any other rebound correction that certainly I've looked at and the previous, you know, decades of the stock market. So no one can predict no one could have predicted COVID has, is it a black Swan event? Meaning, is this something that just happens out of the blue that no one could ever imagine? No, because we've had things like the Spanish flu before. So the whole idea of having influence there, and the whole concept of this happening has definitely happened before in the history of being human.

So it's not like it's completely, Oh, my God, accommodates has happened. It's just, it happens very rarely. Um, and so obviously it instigated the crash and no one could have predicted when that kind of thing would have happen. So the point of dollar cost averaging is to continue regardless, because no one can predict no one can predict when the next correction or crash is going to happen in might be in two months time, the point isn't to avoid corrections or crashes the point isn't to, um, think that it's never gonna happen again, because it will, the market does fluctuate. Volatility is normal. It's how it works. And if you are not comfortable with things going up and down, you shouldn't be in the stock market and you shouldn't be as an investor. You shouldn't be an investor, but also know too, that real estate does the exact same thing.

It's just that it's. So I'm not even going to go into real estate. That's a whole nother discussion, but the point is, if you're not comfortable with it, don't be in it, but just know that it's the way to build wealth. Okay. And not taking risk means that you're essentially just sitting in a high yield savings account where remember your money is going backwards. The point isn't to avoid risk, the point is to understand it and manage risk, which you do through this whole process that I'm taking you through, that I have taken you through. Uh, and also it's, it's about understanding it to a point of that risk does not equal loss. So many people equate the same thing as equate risk and loss as being the same. And it's not just because the market goes down and the value of your portfolio is down at that point is actually kind of irrelevant.

It's actually, it really is irrelevant because you weren't going to necessarily exit then, right? You weren't going to cash out your entire portfolio if you were approaching retirement. And you were literally just about to at the edge of the crash then yes. Sure. But the correction happened so fast, particularly in 2020 that you were unlikely to cash out everything. Maybe you wanted to rely on some of that as income, but it was only going to be a small portion anyway, and now it's corrected six months, literally less than six months later. So the point isn't that we determined that risk equals loss. It's not, and remember it's a long-term things and everything almost rebounds. It always rebounds. I cannot say that enough lacks, rebounds individual stocks don't necessarily. And that is why you have to be village vigilant if you buy individual stocks, because you have to be aware of what your actual exit plan is, but when it comes to index funds and ETFs, the whole point is that it keeps that top performance, right? So it's done for you.

So the market always rebounds, okay,

Always new companies, new technologies, new trends, new new ways of how to make money and new companies emerging because of that.

So

You manage risk, you don't avoid it. And, you know, as an investor, that risk does not equal loss and that it's a longterm play anyway. And with every dip and correction comes with new opportunity of making more money because there's a rebound, right? And it reminded me again, when I watched the big short that the guy that ran the fund, his name was [inaudible], uh, that ran a fund. He doesn't run it anymore. He closed it down that it was a private fund and he had, you know, a bunch of investors and he predicted the 2000 and group global financial crisis because he saw how housing the housing market was built in terms of loans and how those loans were being sold as investments. Anyway, he predicted that was going to happen. And then at the very bottom of the market at the crash, he started buying back in and then he was criticized again by all of his, and literally sued by some of his investors again at the bottom of the crash, because they're all saying, why are you buying? Why are you buying? Um, th you know, it's, it's crazy

Since it's crisis, but obviously

He knew. And as every informed investor knows

The market rebounds, it's going to go back again. It doesn't

Stay at the bottom.

And it was just a reminder to me that people still get into that loop.

Remember the, when emotions are high intelligence is low loop of thinking that this is, this is the end all, and this is the be all. And this is crazy to invest. But at the bottom of a market is when it is the biggest opportunity. And that can only come from having some risk and volatility, meaning up and down

Around the mock-up. So your final step in step six is dollar cost averaging and using compound interest. Now

It's a word that I'm sure you've probably heard it

Before, but I want to explain what it is because it's so good,

Fundamental to your wealth building, that you have to understand it. And I think it's Warren buffet, maybe it's Benjamin Graham. That has one of the quotes that basically says, if you don't understand compound interest and the way it works, then you S you pay it. And when you do, you earn it, meaning if you don't understand how compound interest works, you pay it, meaning you pay it in credit cards, you pay it in car loans. In Peyton student loans, you can pay it in interest because you don't understand. You don't understand that it's costing you hundreds of thousands of dollars, literally that is not an exaggeration.

So, um, compound

Interest is essentially interest on interest, but you don't start seeing it in the first year. You only start seeing it in after the second year. And even then it's small, depending on your account. And really the magic happens at kind of six, seven, eight, and beyond years, the longer, the more it happens. So, as an example, it's a little bit difficult. I'm such a visual lineup, but I'll explain it for those that are auditory learners say you started with a thousand dollars, right? And you deposited, um, $500 a month. And then you continued that and you kept going, you kept doing that exact same process, kept depositing $500 a month. And let's just say, you make 10% return and you do this for 20 years. So at the end of year one, you've got $7,387 because you've earned interest on the money that you've put in.

You started with a thousand dollars, 500 a month, okay? Then in the end of year six, you've got $50,873. So that's seriously increasing a lot. And then you keep going. But after the year 20, after 20 years, you have 387,000 at the end, but you've only put in $500 a month. So you've only put in collectively cumulatively, $120,000. It's taking you 20 is now that's a house deposit, right? But it's taking you 20 years to do that. But you end up with $387,000. That is what compound interest is. You've actually, you put in about 120,000, 121. The return, the compound return is actually 319%, 319%. That's the total compound return, not a boring eight to 10% return that we all talk about that I talk about that other people would talk about when it comes to the stock market, which is about what you get. That's boring. 10% is

Boring, but 320%

Is a little bit more wouldn't you agree? So that's the kind of money that we're talking about, and it works with any amount of money. It doesn't have to be $400 a month. Uh, it can be more, it can be less. You can, what have you start with and whatever you continue with is perfect. But that is the point of understanding that you can get 320% return, which I genuinely don't know where else you can get that aside from real estate, if you buy well. But again, I've heard so many horror, real estate stories. It's not funny.

So once you understand this, I hope that's okay.

State guidance for you to go, Oh, I need to be in this right now.

So once

You do all of that, they are your six steps and you just continue to

Process. And then your view every year, if you want to, every two years, if you want,

Maybe your life circumstance has changed. Maybe you want to change your job. Maybe you want to go work less. Maybe your family changes, whatever,

But you can change it and shift it

As you go. And as you continue as an investor, so they are the six steps, that's it, I've covered literally everything for you. And I know that there's a lot in there, and that's why, again, I have a program that talks about it, and I go into deep information inside investing bootcamp to cover everything, but really the point beyond just the knowledge and education. So you can have the confidence, um, of the program is actually the ongoing support. That's what it's there for. That's what the community is for

Community is really what is, sorry,

Different about so many others, because it becomes your normal. You're surrounded by people who are doing the, exactly the same thing. And I can't tell you the number of bootcamp, investing boot camp members that say things like, Oh, just my family. Don't get it. My family don't get it. They tell me it's crazy. And then, you know, months later, they most in the group and go, Oh, now my family want to know, because my account's now at 40,000, but they thought it was crazy when I was just starting and

That, and I get it because

My family didn't teach me how to invest in the stock market. I have a degree, not in finance. I had to learn everything myself through mentors and coaches and trainers and seminars and books, and more coaching and training and learning the platform and finally getting a mentor and still my family don't do it. So when it's not your norm around you, your environment really does matter because it changes you as a person, as an investor. It determines your money mindset. Literally what you believe in is based on the thoughts that you think on a consistent basis, and those thoughts are given to you. You're not born with them. So they're given to you from childhood, from friends, from acquaintances, from family, and that forms literally how you live now. So every belief that you have is not actually true. It's just a thought on a consistent basis.

That's now become a belief that you believe to be true, but it's not because someone else doesn't think the same thing, a slight tangent, but you get it right. I talk deeply about that in buttons aligned, um, because it really is so important. I still do my own fricking walk around it because I still have limiting beliefs. Technically all beliefs are limiting in some way. All right. So there are the six steps. Firstly, getting your money account sorted, pay off debt over 8%, have a buffer. And then, um, use your FFA account to build up to at least 500 or a thousand dollars or even three to $5,000. If you want to start with an index fund, depending on where you are in the world, um, and continuing to use your money management system set up, because that is the way that you can use it for life, because it grows with you.

Then you determine your financial goals and how you want to be as an investor, how you want your money to actually work for you and what your lifestyle, you know, what you actually want, uh, your risk tolerance, then step two and three and form number four, which is what asset allocation, uh, you want to move forward with. Then you decide in step five, if you're going, how you going to invest in index funds or ETFs. And again, step two is going to determine kind of step five, really? And then you continue through that. Through statistics six, you set up a plan, you continue to dollar cost, average your way through using the same money system set up that you use in step one, by taking the money from your FFA account to continue to invest, and then you continue to grow. And it really does happen way quicker than you think it will.

It's mind blowing how ha how fast it happens. That's probably the most common thing I get in investing boot camp of like, Oh, it's happening way faster than I thought I had this goal. And like, now I've already reached it. And like I realized, my goal was through low and I just, that's what lights me up. I just love seeing more women, wealthy women, more confident around their money, women, more happy around their finances, more women not feeling so fearful that they don't have financial independence or financial security because the, the cycle and especially the shame cycle that so many women are great at. I'm great at it. I self shame all the time, getting way better at it because of all of the work, you know, work that I do on myself, but we're always so busy. And we always think that we should be so much further along and that fear and the worry about not feeling financially secure really does create a more emotional trauma in our body.

And that perpetuates this feeling of really feeling stuck, feeling paralyzed and not being able to do anything. And then feeling overwhelmed and daunted by all of the noise in the market, by people telling you to do it one way or to stop pic or people telling you that you should just be in it now quickly open a Robin hood account or people telling you that you should have done it years ago, or you beating yourself up because you haven't done it years ago. And that really does perpetuate everything. Then it feeling overwhelming all of the technical jargon being mostly male-dominated industry. And for me, that was quite daunting when I was first starting and it still is very much male dominated, more women are investing. Um, now thank God, but there's, I feel like there's still a way to go. There's still a gender investing gap and it's okay where you are.

I just want you to know that it's okay where you are right now and know that you can move from whatever place you were at. It is never, never too late to start investing. I really want you to hear that. I hear people ask me, people still ask me that question when they were in their thirties. And when the first time I saw that it shocked me because I was so amazed that someone thought that they, that they don't have 30 years to build wealth. And they can't, or that's not enough. Like it was crazy. It was, it was crazy to me, but now I see it more and more. And now I get it. And I'm here to tell you it's not too late. Even if you're in your forties or fifties or sixties, it is not too late to set up a financial plan to invest, to build wealth.

You've got this and you know where to find me, you know, where to join the program. If you want to join us in the community. And if not, then continue being around me in Instagram and following the podcast. If you want to join investing bootcamp, head to www dot investing, babe.com, you can get all in the information to start even for as low as I think the payment plan is $250 us. So you can get started at a super low amount. All right, babe, I hope this has been helpful. In fact, I'm not even gonna say that. I know this has been helpful. Um, so many people have been asking about that, asking you about this exact method and set up. And I wanted to redo this as an episode, uh, make sure that you share it with friends and make sure that you continue, you know, you being the guide for other people too on showing them that financial freedom as possible for them too, because the more that we do this for more women, the more that we all become wealthy together. I love you. I will see you in the next episode.

[inaudible]

If you are not part of the Ms wealthy movement yet, make sure you head over to Instagram and hang out with me. There I am at Ms. Wealthy official. And if you need anything else, head to Ms. wealthy.com and get all the info that you need. Find us on Facebook as well. And I'd also love if you can drop a review on iTunes, it supports us massively, and it means the freaking world

[inaudible].