DO NOT Make These 20 Investing Mistakes in 2024

Hey everyone, today we are going to have another long video that is going to be filled with lots of valuable content. If you are a regular viewer of the channel, you know that investing is the key to financial freedom. But the problem is that most people end up losing money when they invest because they end up making horrible mistakes. Warren Buffet once said, the first rule of money is, never lose money. Rule number two, never forget rule number one. But in my path to financial freedom, I have made a lot of financial mistakes that if I didn't do, I would have become financially free much faster. So here in this video, I am going to share with you 20 investing mistakes you should avoid at all cost. There is going to be a table of content in the description so you can skip to the parts that you want to learn or come back and re-watch them again. This video is a combination of many of our previous videos. But before we start, here is a little disclaimer. This is not financial advice, and everything that's said in this video is for educational and entertainment purposes. It is going to be a really long video, so grab a drink and some snacks, and most importantly, give this video a thumbs up and enjoy the video. What's the average age of millionaires in the United States? 62. So, if you are in your 20s or 30s and you are not a millionaire, don't worry because ideally, you should not be one at that age, at least according to statistics. The average net worth for adults between the age of 25 to 35 is 9K dollars, so if your net worth is higher than that, congrats, you are doing better than most people. That number is so low because your net worth is all of your assets minus liabilities such as student debt, mortgage, or credit card debt. But as people pay up their loans, they end up with a much bigger net worth. That's why the average millionaire age is so high. But what percentage of millionaires are below the age of 35? Only 1 percent. So when you see people becoming millionaires in their teen years or billionaires before turning 30, that's an exception. A lot of things have to go right for that to happen. You have to be at the right place with the right people with the right idea. Not to say that they are wealthy because they are just lucky, they definitely worked hard for that, but a lot of other things outside their control went right for them as well. The point is, if everything goes right for you and you become one at such an early age, then good for you, but if not, that doesn't mean you should give up but rather keep pushing until you make it. Wealth is something that is built gradually. That's why the overwhelming majority of millionaires are over 60 years old. That might not necessarily be in your case because that's the average. There are people who are millionaires and are above 80, and then there are people who are millionaires in their 20s, so the average is 62. No one wants to wait that long to become a millionaire. You want to enjoy that money while you are still young, and one way to do that is to avoid financial mistakes. Often people do find ways to make a lot of money. Some of you might already earned millions in your entire lifetime, but you have lost most of it, so if you want to cut your financial journey by a huge milestone, if you want to become financially independent sooner, then this video is for you. If I avoided these mistakes, I have no doubt that I would have become financially free much sooner. So I am going to save you many years of experience and share with you 5 money mistakes you have to avoid at all costs. By the way, I have a huge announcement to make at the end of the video, so make sure to stay till the end to find out. But before we get started, here is a disclaimer. This is not financial advice, and everything that's said in this video is for educational and entertainment purposes. And now let's get back to the video. 1. Not paying attention to your mortgage rate For most people, buying a house is going to be their single biggest investment. Houses are not cheap, it takes a lifetime to buy one. That's why we have 30-year-old mortgages. But what people take for granted are mortgage rates. Of course, everyone can see the difference between 1 and 5 percent, but a lot of times when the difference is like 1 percent, people don't take it seriously, they don't try to look for better deals or improve their credit score before applying for a mortgage. Let's do the math and figure out how much of a difference does a single percentage make. Let's say you want to buy a house that costs 300K dollars, and your mortgage instead of 4 percent is going to be 3 percent. Assuming you are going to make a down payment of 20 percent, you are going to save an additional 134 dollars per month. At first glance, it doesn't seem like a lot of money, but if you give it a second thought, that's a huge difference. That's an extra 1600 dollars a year, or 48,240 dollars over the course of your mortgage. For most people, that's how much money they make in an entire year. If you can get yourself a 1 percent lower rate, you can save yourself a fortune. But here is where the interesting part starts. If we count the opportunity cost of that money, that number skyrockets. Instead of saving it, let's say you are going to invest that 1600 dollars into the S&P 500 every year. Over 30 years, you are going to end up with 300K dollars, pretty much the same amount of your house. So when you are not trying to get an extra lower percentage when it's possible, you are throwing away 300K dollars, and if the price of the house is higher, then that number is going to be much bigger. 2. I cannot tell you how wrong I was. 3. beauty pays well There are multiple studies that show that, on average, more attractive people do better financially. I know that it sounds horrible and bad, and I am not saying that's right. The problem is we naturally love to deal with more attractive people, I am not just talking about the opposite gender, but overall, in general. We often criticize celebrities who have done face surgery to look more attractive, and And yet millions of people follow them after they have done that, thus making them wealthier. Multiple studies show that the better-looking men had higher starting salaries and faster earning growth in their first 10 years. For women, looks had little effect on their starting salaries but did improve their earnings growth in the long run. Some studies even indicated that better-looking people get lower mortgage rates. If you are hiring a salesperson, for example, would you hire someone who would attract more customers by being attractive and generate more sales or someone who is less attractive and would attract fewer customers? Of course, not all professions require great looks, such as sales or acting, but if you had two professionally equal options, most people would lean to hire the more attractive one. Some people are lucky genetically and natural and look beautiful, but that doesn't mean you can't do anything about it. You can change your genes, but there are plenty of things that you can do, such as dressing up properly, fixing your hair, grooming, exercising, hitting the gym regularly. You can make yourself look much more attractive than you can imagine. 3. You always have an option So here is how it works. First, you go to the kindergarten, then to school, then to college and university, and then you find a job, maybe change your job, get married, and so on. There is nothing wrong with that. The problem arises when people think that they have no choice. Once you graduate, what do you do? You look for a job. What people don't realize is that they don't have to. It's a choice to either go and find a job or do something on your own that feels more meaningful. You are not obligated to go to college. You are not obligated to take a student debt. You are not obligated to find a job. If you think that you have an idea, you can start a startup. It's a choice and not an obligation. 4. Borrowing money to start your first business Here is what freaks me out. When people have no idea how to build a business, who have absolutely no experience of what it means to run a business believe that money is going to solve their business problems. So they go out and borrow money to start a business, and then in most cases, they get themselves into a lifelong debt. Don't get me wrong. Capital is important for a successful venture, but it only solves a problem when you know how to solve it. We are no longer in the 20th or 19th century. Even back then, you could start a business with little to no capital. And today I can give you dozens of ideas of how you can start a business with a few hundred dollars at best. Once you have established your business and you have a clear plan how to expand, that's when it makes sense to borrow money, but even then, you are probably going to make enough to expand on your own without borrowing money. 5. Timing the market When you get into the stock market for the first time, you are excited, especially when you look at all these patterns. If this happens, then this is how the market is going to react, or if this is happening now, it should be followed by a boom or a correction. You spend all this time trying to predict the market, but the moment you put your money on the line, the stock plunges. With every minute that you are not selling your stock, you are losing money, and it hurts because it happens right in front of your eyes. Even if you exit your position and realize your losses, you don't give up and try to time the market again, and that's how a lot of beginners lose fortunes when they just get into the stock market. In fact, most of them start to believe that maybe the stock market is not for them or it's just one big scam. What you have to understand early on is that it's impossible to time the market. Even if we are in the middle of a bubble, you never know when that bubble is going to burst. Is there a chance that you can predict it? Yes, but it's very small, and if you are a beginner, then you can only rely on luck. So instead, dollar cost average, which means invest gradually so that you hit both the bottom and the boom, but since the market overall is rising, you will most certainly make money and not lose. On May 2nd, Warren Buffett's conglomerate Berkshire Hathaway reported a net loss of which tells us that even the greatest minds in the world of finance aren't insured against unexpected events. Even though the company managed to report a profitable quarter recently, its stock price hasn't even regained itself back to pre-pandemic levels. Buffett lost his position as the third richest man in the world. Even people like Elon Musk, who seemed quite far away from Buffett's level, have exceeded him. No matter how smart, talented, or hardworking you are, the market is unpredictable, and if you are not careful, you might end up losing everything while thinking that you stumbled on a golden opportunity that will make you a millionaire. While there are endless kinds of mistakes investors usually make, especially beginners, there are 5 fundamental mistakes that even mature and experienced investors make and end up losing a fortune. If you don't want to be one of them, if you want your investment to keep growing, if you want to build a fortune in the stock market, then you have to avoid these fundamental mistakes. So listen carefully. Confusing investing with trading Beginners who just start investing imagine that you have to find new cool stocks to invest every day or every week. And if you have spent the entire month not investing in a single company, then you are not an investor. In the world of the stock market, there are investors and there are traders. A trader is someone who buys a stock with intentions to sell it on the same day or in the next few days because the goal isn't to invest but rather buy the stock and profit from the volatility of the market. Have you ever seen how fast stock prices move? They jump up and down every single minute, if not second. The price opens at 100 dollars, for example, and closes at 105 dollars. So if you trade with 100K dollars, you can expect to make a 5K profit within the day. In theory, it seems like an easy way to make money, but it's much more difficult in practice. Stock prices are almost impossible to predict in the short run. And as a trader, it doesn't matter what stocks you are buying, even if these companies are complete trash because you are not looking to keep your money there. And that's what makes it so different from investing. Investing means buying tiny pieces of businesses that produce something meaningful and grow over time, so does the value of your investment. So if there is one company you know that's doing great, you know what is it going to be 5 or 10 years from now, you might keep investing in that company instead of reading endless financial reports and waste your time analyzing unlimited financial statements. 2. Investing emotionally Whenever a certain asset is rising dramatically, you have tons of people suddenly get interested in investing, although they didn't give a damn about it before. Remember what happened with bitcoin just a few years ago. The price rose so dramatically that people who had no idea what cryptocurrencies are, who didn't understand how blockchain works or the technology behind it, suddenly started buying bitcoins, hoping that they are going to make a fortune. I am not saying anything negative about bitcoin, blockchain, or cryptocurrencies, but investing based on your emotions is a bad idea. Usually it turns out to be disastrous. Bitcoin is just one example. Remember the mortgage crisis? Even the most qualified investors could not resist and jumped in. However, the entire thing collapsed, and some countries are still suffering the consequences of that crisis. In the late 1990s, even a giant tech company such as Yahoo made a horrible decision investing a few billion dollars in Broadcast.com, which two years later, they had to shut it down. But Mark Cuban, who was smart enough to sell his entire stake before everything collapsed. Here is the rule of thumb, if it's already in the news and rising dramatically, you missed the opportunity. Accept it and don't feel bad about yourself. By the time you get in, the cycle might be at its peak. Any investment you make should be based on rational, calculated risk. Yes, of course, you might end up missing some great opportunities, but you will avoid the risk of losing all of your wealth and build a sustainable portfolio over time. World's greatest investor, Warren Buffett missed the opportunity to invest in Google, Amazon, and a lot of other great companies. There are two types of stocks worth buying. A stock of a company that has a promising future and its current stock price does actually represent its value today and not 5 or 10 years from now. And secondly, a stock that's for one reason or another is undervalued. Everything else does not worth your money. Number 3. Waiting too long to start Investing is all about time. The earlier you invest, the more you are going to earn. 100 dollars invested when you are 20 will turn to 466 dollars by the time you get 40 while the exact same 100 dollars invested when you are 30 will turn to just 215 dollars by the time you reach 40. That's assuming if you invested in an index fund with annual rate of return of 8 percent. I know that you might be thinking that, let me wait until I figure everything out. But that time will never happen, there will always be something you don't know. It might sound a bit controversial because just a moment ago, I warned you not to invest if you don't understand what you are doing. That's true, but you don't have to be a financial genius to start. If you are not much into the stock market, invest with an index fund. Start with a fraction of your savings or monthly paycheck and then give yourself some time to learn. And once you educate yourself, you can go ahead and invest in companies you believe are going to do better than the S&P 500 in general. I know that you might not have the time, but you don't need to spend hours and hours looking for companies every day, you have to do it once or twice a month. And once you find a good investment, just keep investing there. My biggest position is in an ETF. I also invest in individual companies, but I am very careful with that because I don't want to spend a ton of my time every day to track these stocks. 4. Not being able to look outside the stock market Real estate and the stock market are the coolest investments, but they are not necessarily the best. My best investments that I have ever made were all in businesses that I started. The stock market is more to keep my money growing while I am busy growing my businesses because if I keep them in a saving account, inflation would eat them out, so I invest in stable companies that have some room for growth. Maximum what you can expect from the market is 7 or 8 or at best 10 percent. Of course, it's different every single year because there were times when S&P 500 was higher by 20 percent or more, but other times it was down by a negative percentage. But when it comes to small investment in small businesses that seems to be working, returns can be a few hundred percent if not thousands. You have the ability and the power to influence it, while when it comes to these multi-billion dollar corporations, you can't do anything. So don't be blinded by the stock market. The best investment specifically for you might be under your nose. And finally, investing what you can't afford. It's easy to get excited about investing. I get it. You see all these numbers, you want to jump in and nail it so that your bank account gets filled with these green papers, or to be more precise, with those numbers. And that was the case with me as well, but you have to consider other factors as well If you need that money in the next few months or so to cover your basic expenses, then it doesn't worth it to invest. Here is why. Since the market is unpredictable, even if it's a huge and stable company in the long run, it will probably grow, but in the short run, the stock price might fall, and if you suddenly need money to cover your basic expenses, you might end up selling your investment at a loss. So don't get overexcited. Of course, start as early as possible, but be rational about the amount you want to invest. It's better to start with something small but consistent, even if that means just a few hundred bucks a month. If you have started investing recently or you are interested, please take these mistakes into account. I don't have any other interest other than helping you by sharing my experience with you. It's just so painful to lose the money you worked so hard to earn in a blink of an eye. I am not saying that you will never lose anything because that's a fundamental part of the game, but minimizing losses and mistakes is a crucial part of success in anything, including the stock market. Are you in a better financial shape than you were a year ago? If not, then you are clearly doing something wrong. Many people think that you need to be lucky to be financially free, although there is some truth to it, but most people who have access to the internet are already lucky enough. The only problem they have is that they are bad with money. The moment they receive that paycheck, they make sure to spend every dime by the end of the month. As a wise man once said, it's not your salary that makes you rich, it's your spending habits. If you are 20 years old and put aside just 10 dollars every day for your retirement, you will end up with 1.7 million dollars when you hit 60. Imagine if you increase that number to 20 or 30 dollars a day. You can hit that number way faster than you can imagine. But to do that, you probably have to get rid of some of your spending habits. Just by eliminating your daily Starbucks coffee or eating less out, you probably can do that. Of course, there are millions of ways of how people waste their money, but we are going to take a look at some of the most controversial ones. In this video, you are going to learn why buying a 20K dollar Rolex watch is cheaper than a 200 dollar watch, how you can use your car to become a millionaire, and why you will A car is no longer merely a tool to move from one place to another. It has turned into a status symbol. The more expensive your car is, the more money you probably make. But the truth is, a 25K dollar Toyota can get the job done as good as a 200K dollar Rolls Royce. But that's not how most people waste money when buying a car. You can buy a 30K dollar Toyota and waste more money than when you buy a 100K dollar luxury car. When you buy a brand new car, the moment it leaves the dealership, it automatically loses 10 percent of its value, even though it's still brand new. Within its first year, it loses 20 up to 30 percent of its value. Within the next 3 or 4 years, it loses another 40 to 50 percent of its value. So no matter what car you buy, as long as it's new, in 3 to 4 years, it will lose half of its value. That's the single most horrible financial decision you can ever make. Because cars easily last 10, 15, or 20 years, and there isn't much innovation in this industry every single year. A 3 or 4-year-old car is not going to be different from the rest of the cars in the streets, but will save you a fortune. The average price of a brand new car in the US is almost 37K dollars, and Americans on average change their car every 6 to 8 years. If you buy a used car every 6 years instead of a new one and invest the rest of the money, let's say in the S&P 500, you can end up with almost 1.5 million dollars by the time you retire. And that's if you buy the car with cash upfront every time. Here, where the interest rates range from 4 to 20 percent, your opportunity cost would be much higher, which means you are giving up millions of dollars just to have that car. Next time before you buy a car, ask yourself, are you ready to give up millions of dollars just to have this BMW? 2. Don't buy a house A lot of people would say buying a house is one of the greatest decisions you will ever make. Unfortunately, that is not always true. If you are not going to live in that house for at least 10 years, then you should not buy a house because you will end up wasting a fortune. Now before you throw at me your angry comments, hear me out. When you buy a house, it's not just about the price tag. You have to pay taxes, insurance, inspection, appraisal fee, realtors, and so on. The closing cost is really high, so if you are not going to live there for at least 10 years, you will end up paying much more than if you rent. On top of that, when you take a mortgage, and the first 5 or even 10 years usually pay the interest and then gradually move to pay the principal. So if you take a mortgage and just live there for 5 years, you will be paying interest to the bank for loaning you that money instead of paying rent, for example. Mortgage only makes sense if you intend to own that property for 20 or 30 years. But yet, in this radically changing economy we live in, it doesn't make sense to tie yourself to one place. That's why so many people who take mortgages decide to sell that property in less than a decade and end up paying a fortune in closing costs. Just imagine if you have invested that money instead in a mutual fund, for example. You could have ended up with hundreds of thousands of dollars, if not millions. 3. The sunk cost fallacy Confused? Me too when I heard about it for the first time. Since you have watched this video, you are now financially educated, and I assume you are not going to borrow money to buy a brand-new BMW because that is financially irresponsible. But let's say you have already borrowed money to buy your allegedly dream car, but you don't use it much because you work from home and only need a ride once or twice a week, but you still have to make your monthly payments. The rational decision would be to sell that car and pay off your debts since you don't need that car, but since you have already paid a portion of that car, you don't want your previous investments to go to waste, so you keep the car. It's like when you purchase a ticket to a movie but then find out that the movie is boring, you still keep watching it because you don't want your money to be wasted. And that is known as the sunk cost fallacy, a desire not to see your past investments to go to waste. But you have already purchased the ticket, you cannot recover that. Now, you should decide what is the best outcome for your future and not what outcome will justify your previous spendings because the investment is gone, it's sunk. Or take another example, some people remain in failing relationships because they have already invested too much to leave, although the logical thing would be to leave. 4. Cheap watches To most people, buying a $20K Rolex watch is a waste of money because a $200 watch can get the job done as good as a Rolex watch. But the reality is, when you buy a regular watch, it might last you a year or two and then you will throw it away and get a new one or just stop wearing a watch like I do. On the other side, when it comes to luxury brands like Rolex or Patek Philippe, these companies make sure that there is a limited number of their products in the market, which keeps driving the price higher over time. In fact, if they end up with unsold inventory, they will destroy it to keep the status quo. So if you buy a Rolex watch where only a limited number of them were ever made, the value of your watch will only grow as time goes by. You will be able to sell it for the same amount you bought it for if not higher, whereas if you buy a $300 watch, you will throw it away once you get bored of it because there is no other use to it. 5. Finally, impulse buying. How often do you find yourself buying things you didn't plan to buy? You went to get yourself a pair of shoes, but you ended up buying a new t-shirt, a new pair of jeans, and whatever else was there on sale. But when impulse buying turns into a habit, you are financially screwed because no matter how much money you make, you will waste it on stuff you don't need. Some people even end up wasting fortunes on expensive things such as cars or phones and then question themselves a few days later, why on earth did I buy this? If there is something you feel excited to buy, especially if it's something expensive, sleep on it, give yourself at least a day or two to think about it. Once you calm down, then you should decide whether you should buy it or not. That brand new iPhone or BMW will always be there in the store, and if someone else buys it, there will always be more as long as there is demand. It seems like we have developed a tradition where every year starts with a financial disaster. 2020 started with a massive stock market crash, 2021 with retail investors pushing hedge funds to lose billions of dollars and putting the entire financial system upside down. I am just curious what 2022 is holding for us. The Fed is going to announce that it's going to launch its own cryptocurrency? I wouldn't be surprised. GameStop's stock price surged more than 1,700 percent instantly, driven by a group of amateur investors on Reddit who organized a revolt against hedge funds that bet against the company. The best part is that these hedge funds that seemed like no one can beat them at their game lost billions of dollars. A bunch of Reddit users destroyed multi-billion-dollar hedge funds that spent millions on the latest software, best accountants, and analysts to predict the market. They even caught the eye of the White House in the process. Melvin Capital, one of the hedge funds that shorted GameStop, lost 53 percent. It started the year with 12.5 billion dollars and ended January with just 8 billion dollars. It's estimated that short sellers lost nearly 13 billion dollars on GameStop alone so far this year. I guess these hedge funds will think twice before shorting another stock. However, most retail investors who purchased the stock at 300 or 400 dollars or above ended up losing most of their money since platforms like Robinhood restricted trading. To understand what really happened with GameStop, we have to understand why hedge funds shorted GameStop in the first place. How is it possible to short more stocks than the number of stocks that exist? Should you trust WallStreetBets and how to avoid the biggest financial mistake that most investors make? We will answer all of these questions and many more, but before we do that, here is a little disclaimer. This is not financial advice, and everything that's said in this video is for educational purposes. In order to make the best financial decision that suits your own needs, you must conduct your own research and seek the advice of a licensed financial advisor. And now, let's give this video a thumbs up for the YouTube algorithm, and let's get right into it. You probably heard about hedge funds, but you don't know for sure what they do because they are not allowed to market themselves since they are not regulated. That's why very few people know how hedge funds work. Hedge funds are made by the rich for the rich to make rich people richer and avoid taxes. That's all that you need to know. If you have never invested through a hedge fund before, that's alright because you need a net worth of at least a few hundred million dollars. Unlike ETFs, they take a percentage of the profit besides a percentage of the total assets you invest in. That's why they try to maximize profits for their clients. The most common investing strategy you probably heard is buy low and sell high. That's how you and I invest, but the ultra-rich like hedge funds invest by reversing the strategy. They buy high and sell low. That doesn't make sense at first glance, but it's simple. Let's say you expect a certain stock to decline, like Intel. Because you know that Apple, who is their biggest client, will announce that next week that they will no longer buy Intel chips and make their chips in-house. So you pick up your phone and call your broker. You borrow from him a single Intel stock that costs a hundred dollars and instantly sell it in the open market for a hundred dollars. Congrats! Now you have a hundred dollars in your pocket, but you still owe your broker one Intel stock. Let's say you are right, and next week, Intel's stock price drops to 70 dollars. You use that hundred dollars to buy one Intel stock for 70 dollars since the price dropped and return it to your broker and pocket the difference. Congrats! You have made 30 dollars out of a fall of a stock. It sounds simple in theory, but it's extremely difficult and risky in practice. What happens if you are wrong? What if the price doubles overnight? You still have to return that single Intel stock to your broker. Now you have to buy that stock back for 200 dollars to return it to your broker. When you buy a stock and try to sell it when it rises, the maximum that you can lose is the amount you invested in, but in the case of shorting, if the price keeps rising, your losses keep rising. Theoretically, you can make unlimited losses since, theoretically, the stock price can rise indefinitely. So when hedge funds realized that GameStop is struggling, they decided to play around with its stock and bet against it and shorted 114 of its stocks. What? Wait a second! How can you short more stocks than the number of stocks that exist? It's complicated, but here is a simplified version. Let's say Elon owns one GameStop stock. His broker lends his one share to a short-seller, Jeff. Jeff borrows that stock and sells it in the open market to Warren. Warren doesn't know that Jeff actually borrowed that stock. So when Warren's broker lends his share to another short-seller, Bill, who then goes and sells that share to another investor, the exact same share now has been shorted twice. This scenario should not have happened, but it happens. So the reddit user who was investing in GameStop since the fall of 2020 realized that all of these hedge funds shorted over 100 percent of GameStop shares, which means if everyone starts buying GameStop, the stock will keep rising, and hedge funds will have to buy these shares no matter how expensive they get to exit their position. But that will drive the price higher, which will attract more investors, which will again drive the price higher to the point where these hedge funds will either go bankrupt or at least buy back these shares at an unbelievably high price. So GameStop's stock price surged more than 1700 percent instantly. Theoretically, it made sense to buy GameStop because short-sellers had to pay interest on the borrowed stocks. If everyone held their position and didn't sell, hedge funds would have kept proposing higher and higher prices. GameStop could have easily crossed a thousand dollars. But something went wrong. Platforms such as Robinhood and others restricted retail investors from buying more GameStop shares. That's insane. Of course, they explained their actions by saying that they were protecting their clients, but I don't personally buy that. That could be the reason partly, but I think there is a lot more to this than we know. Who knows, maybe one day we will find out. Here is what I don't like about this kind of investments. First of all, it's not investing, it's trading, and it's not based on any data or logic. The people who invested in GameStop and similar companies are not investing because they did not do fundamental analysis and expect the business to grow. It was pure pump and dump. The problem with that is that no matter how high the stock price will rise, it will crash and fall back to where it started because the company didn't change or grow. At some point, when the price reaches a certain point, early buyers will sell, which will drive the price down, which will force other investors to panic and sell, which will further drive the price down, which will force more investors to panic and sell and so on until most people who purchase the stock after the hype will lose at least some of their money if not all. You could be lucky, you could be one of the early buyers, but chances that you will lose money especially if you invested once it was already all over the news are way higher. When something like that happens, when everyone is making money, when it's all over the news, it is really difficult to control yourself. The feeling of missing out will push you to invest even if it's too late. I have had that feeling multiple times, but I try my best to control myself because if I feel like I am missing out, chances that I have missed out already are 90 percent. So even if it's a great opportunity, I would rather miss it than lose the money I have earned with my blood and sweat. I am not saying you shouldn't take risks or invest. Investing is great, I do invest myself, this channel is about investing, but when investing is based on facts and data, chances you will make more money way higher, and most importantly, you can sleep peacefully at night. In 2017, the top 8 richest men became wealthier than half of the world's population. Imagine 8 people having more wealth than almost 4 billion people. That's a whole different level of inequality, and this year, that inequality got worse. The number of billionaires on Forbes' 35th annual list of the world's wealthiest exploded to 2,755, 660 more than a year ago. Altogether, they are worth 13.1 trillion dollars, up from 8 trillion dollars on the 2020 list. 2,755 people have an equal wealth as the entire GDP of China, the most populated country in the world, and the world's second-largest economy. Most of the wealth is now tied in the hands of a few people, and that's not by accident. Most people are not financially literate since that's not something we are taught at school or by our parents. We are just expected to be good with money just like that. I know that it sounds silly, but that's why most of us are doing so terrible financially. That's why most of the wealth is tied up in the hands of a few individuals. So here in this video, we are going to do something to fix that. We are going to take a look at money lessons that people learn too late in life. We are not talking about basic concepts such as inflation or compound interest. We will dig a bit deeper and find out lessons that if you learn earlier in life, you are probably going to be on the right side of the world, on the wealthier side. So if you are ready, give this video a thumbs up and make sure to check out our second channel called bloom where we also post videos about investing and money but also about other things that you will find interesting. If you enjoy this channel, you will definitely find our second channel interesting, so go ahead and subscribe. And now let's get back to the video. 1. Be an outlier When I got into investing for the first time, I started with trading. I would use all my knowledge to analyze a certain company, and I remember I invested 300 dollars into that company, all the money that I barely saved in the last few months. Imagine how nervous I was. Right after I purchased the stock, the price started falling, and I got even more nervous. I was looking at the screen and counting every dollar that I was losing, but I decided to halt, at least for another day. The next day, the price fell by 20 percent, so I got out and made a loss. I lost pennies back then, but even 50 dollars was a lot of money to me back then, but I decided not to give up and gave it another shot. Unfortunately, I lost again. That's when I thought that investing isn't for me. That's what happens to a lot of people, including myself. You try something once and compare yourself to others who are much more successful in this, and you say, maybe this is not for me, maybe I should try something else. But the reality is, you can literally be good at anything as long as you practice it enough. In fact, that's how the idea of the 10,000-hour rule has emerged. If you put 10,000 hours into anything, you are guaranteed to be good at that, and I can say that from my experience because after many years of investing and learning, I began to understand the market and started making much better investing decisions, and that's what people don't realize early in life. They jump from one thing to another thinking that's not for them, they are not good enough and perform poorly financially, when in reality, all they had to do is to stick to one thing long enough to become financially successful. 2. Wealth can be created out of nothing When you grow up in a poor family, you live in a world of scarcity and limitations. There is only so much of everything, including wealth. If I am going to be rich, then someone else should be poor. We are poor because other people have more than they should have, and that mindset literally pushes you to fight for what's already there instead of creating what isn't there. Most of the world's richest people became so wealthy by not competing in the same traditional industries but went on to create new industries that weren't there in the first place. Elon Musk is probably the best example who literally invented an entirely new industry called aerospace or electric cars. In fact, all the companies he started, Paypal, the Boring company, SpaceX, Tesla, Neuralink are all about creating something new, solving a problem that isn't solved yet. That's why his net worth is around 150 billion dollars. It's not just about him. Every successful business is about innovating something new from Airbnb to Uber. Even smaller companies like Robinhood or even Angry Birds, they added value to the world in different ways. They didn't take anything from anyone. They just made the world a better place and got rewarded for that. So stop thinking that you are poor because someone else is rich and start thinking about how you can add value to the world. 3. The paradox of choice If you are like me, then you hate going to restaurants. Because every time I go to a restaurant, I would take a look at the menu, and I would get frustrated by the number of choices they have. I would end up spending more time choosing what to order instead of actually eating. I have already spent the entire day taking decisions, and I came to a restaurant to enjoy and not paralyze my brain again. And that's known as the paradox of choice. Having a lot of choices might seem great, but it has its disadvantages as well. In fact, it's actually one of the main reasons why a lot of people can't excel at what they do and achieve some level of financial success. Take an example of investing. The market is filled with opportunities from tech stocks to biotech companies to cryptos to other financial instruments, but because there are so many of them, you can't choose to stick to one of them. As soon as you get deeper into one of them, another one hits the news, and before you even understand what's going on there, cryptos are all over the news, so you end up just following the news without actually taking action on any of them. A lot of people criticize Warren Buffet for not investing in tech companies early on or avoiding bitcoin, saying that he is an old man who is not catching up with the world, but that's not the case. He knows that there are so many opportunities, but he also understands the paradox of choice. The sheer amount of choices will get him to nowhere, so he is just focused on one sector, on a sector that he excels. That's why his net worth is over 100 billion dollars, while those who criticize him don't even have 1 percent of his net worth. Eliminate your choices as much as you can, especially when it comes to your personal life. I know people who would wake up and spend 20 minutes thinking about what to have for breakfast and then another 20 minutes what to watch on YouTube while having the breakfast. I don't want to waste so much time and willpower on stuff that doesn't matter, so I have the same breakfast every morning, and I choose from 3 sets of clothes every single day, and I spend my time doing stuff that actually matters and makes me happy. 4. Everyone is afraid A lot of people tell me, your videos are awesome, you are so good, I wish I could be making videos like you. Only if I was as good as you, I would start a channel as well if I wasn't afraid. Do you really think that I was this good when I started? Of course not. In fact, I was afraid to be judged. Just go back and watch my first videos. The animations on my videos were absolutely horrible, and my language was terrible. Putting out content where you could be judged by the entire world is something normal to be afraid of, but that's the difference. We are all talented and full of great ideas. The difference is that some of us acknowledge that fear and do it despite the fact that we are afraid, and others assume that you should do it only when you are not afraid. The most important lesson I have ever learned is, do whatever you are afraid of. Once you do it a few times, that fear either will go away or you will learn how to manage it. Once you learn how to fight your fears, you will start that business, you will start investing, you will start growing, and you will never be in that desperate financial position again. 5. Don't work hard for money If you are like most people, you grew up being programmed that you have to work hard for money, but working hard alone will never make you rich. How do we know that? Take a look at the real world. There are millions, no, make that billions of people who slave away working their tails off all day, even all night long. Are they all rich? No. Are most of them rich? No. Are a lot of them rich? No. Most of them are broke or close to it. On the other hand, whom do you see laughing around the country clubs of the world? Who spends their afternoons playing golf, tennis, or sailing? Who spends their days shopping and their weeks vacationing? Rich people, people who do not work hard but let their money work hard for them. That's how you become financially independent. Yes, you do have to work hard for your money. For some people, this is temporary, but for most people, it is permanent. So the goal should always be in your mind that you are going to make and save enough money that will keep earning you money while you are playing golf. If you have enjoyed this video, you will most definitely enjoy this custom playlist that I have created specifically for you that could potentially change your life. And now it's time to give this video a thumbs up that it deserves and make sure to subscribe and turn on your notifications, don't forget to check out our second channel. Thanks for watching and I will see you in the next one.