Investing 101 Jaspreet Singh Minority Mindset www.theminoritymindset.com
Table of Contents i WHO AM I & WHAT IS THE MINORITY MINDSET? ii FOLLOW US iii DISCLAIMER 01 HOW DO YOU MAKE MONEY WITHOUT WORKING? 17 STOCKS - HOW DO YOU MAKE MONEY? 03 MAJORITY MYTH #1 18 STOCKS GETTING STARTED 04 HOW DO YOU DO IT? 19 REAL ESTATE INVESTING WHAT IS IT? 05 EXAMPLE 1 20 REAL ESTATE HOW DO YOU MAKE MONEY 07 EXAMPLE 2 21 REAL ESTATE GETTING STARTED VS. STOCKS 09 WHAT THE HECK IS A SEED? 22 REAL ESTATE VS. STOCKS? 10 MAJORITY MYTH #2 23 IMPORTANT INFORMATION - BUYING 11 DELAYED GRATIFICATION 24 IMPORTANT INFORMATION - SELLING 13 NO, IT WILL NOT BE EASY. 25 COMPOUNDING YOUR PROFITS 14 START WITH THE END 26 COMPOUNDING DEMONSTRATED 15 START WITH THE END (PART 2) 27 THIS WAS JUST THE BEGINNING 16 STOCK MARKET INVESTING WHAT IS IT? 28 LEARN AND ADVISE
Who am I & What is the Minority Mindset? Hi Guys, My name is Jaspreet Singh. I started Minority Mindset because when I was growing up I was always told to get good grades so I could get a "good" job. Now after some business successes and failures, I am on a mission to teach others what no one told me about money, business, and entrepreneurship. When I launched my last business, I was scammed and lost a lot of money. I wanted to teach entrepreneurs how to start a successful business without falling into the same traps that I did so I created a free YouTube channel for entrepreneurs. It costs money to eat and it costs money to feed people. If we have more good people with money we will have more good in the world. Don t be the majority. #ThinkMinority i
Follow Us Subscribe to our channel: New Youtube videos every week Instagram @MinorityMindset Periscope @M2JaspreetSingh (I m live every Saturday morning, 11am EST) Snapchat @M2JaspreetSingh Twitter @M2Jaspreetsingh ii
Disclaimer BE SURE TO CONSULT WITH AN ATTORNEY TO SEE THE LOCAL RULES AND REGULATIONS IN YOUR AREA. AND TALK WITH AN ACCOUNTANT TO COME UP WITH THE BEST STRATEGY FOR YOU. I CAN T TELL YOU WHAT TO DO. BUT I CAN SHOW YOU THE OPPORTUNITIES. iii
How do you make money without working? MAKE YOUR MONEY WORK FOR YOU. The majority of people work hard for their money. They rely on their jobs to survive financially. The minority have their money work hard for them. They make money through their job or their business, and then they have their money work hard for them. 01
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#1 Majority Myth I need a lot of money to make my money work for me. WRONG. YOU CAN START WITH UNDER $100. Earl a parking attendant never made more than $12/hour. The most he made was $20,000/year. He started with just a few dollars, and has turned his small savings into $500,000!! Learn about Earl here: https://www.youtube.com/watch?v=qluioxqr3bo 03
How do you do it? : Buy Seeds : THINGS THAT MAKE YOU MORE MONEY. : Don t Buy Bananas : Things that use up money. The bananas we eat have no seeds. So when you consume a banana, everything is gone, just like your money. 04
Example Majority John wants to buy a new car. So he goes to the dealer and buys or nances a $20,000 car. As soon as he drives the car off the lot, the car loses 11% of its value. Every year John has to put more money in the car for maintenance while the price of the car goes down. 05
Example Minority Nancy wants to buy the same car. She takes the $20,000 she has and buys seeds (more about what to buy coming soon). She lets her money grow for a few years. Now she takes the money she made from her seeds and buys a car. She has a car, the original $20,000, and her seeds are still making her more money every month. Watch now: Why The Rich Will Get Richer 06
Example Majority: John wants to buy a $250,000 house. He takes the $50,000 he has and uses it as a down payment for the house. He pays $1000/month in mortgage payments. 07
Example Minority: Nancy wants to buy a $250,000 house. She takes the $50,000 she has and uses it to buy seeds and lets her money work & grow for some time. She uses the money she makes from her seeds to pay for most of the down payment, and then uses the money she makes every month from her seeds to pay for her mortgage. 08
What the heck is a seed? A PASSIVE investment. Something that will pay you money for owning it. You do the work nding and buying the right seed. Then you let it pay you every year regardless of whether you work or not. The most common examples: Stocks & Real Estate 09
Majority Myth #2 People don t do this because they don t know how. WRONG. Many people know investing their money can make them more money. They don t do so because it requires two things: patience and delayed gratification. We live in a society where when the majority of people want something they want it now, they aren t willing to wait for something bigger in the future. Don t be the majority. 10
Delayed Gratification Yes you may get made fun of for living below your means. Yes people will think you are weird for avoiding credit cards. Yes people will laugh when you drive that ugly car. Yes people will think you are crazy for not trying to t in. YES PEOPLE WILL SAY YOU ARE OUT OF YOUR MIND WHEN YOU TELL THEM WHAT YOUR DREAMS ARE. 11
The majority wants to t in and be accepted. YOU HAVE TO BE WILLING TO SACRIFICE NOW FOR A BIGGER GOAL IN THE FUTURE. 12
No, it will not be easy. I am not here to sugar coat it like most get rich quick programs that sell you hopes and dreams of making money. G E T T I N G R I C H A N D BECOMING FINANCIALLY SUCCESSFUL IS HARD WORK. IT TAKES A LONG TIME. THAT S WHY THE MAJORITY WILL NEVER BE ABLE TO DO IT. Loading up on debt to buy a bunch of investments does NOT make you rich. It makes you liable for a bunch of payments. Being financially secure means having no liabilities (payments to make), and money coming in every month. 13
Start With The End How much money do you need every month? $1,000? $10,000? $100,000? ADD UP YOUR CURRENT EXPENSES AND ADD IN YOUR DREAM EXPENSES. Now see how much money you need. Be honest with yourself. Let s say you want to make $10,000/month. Now work backwards. If you need $10,000/month, how much money do you need working for you? If your money grows by 20% annually: $600,000 If your money grows by 15% annually: $800,000 If your money grows by 10% annually: $1,000,000 Watch now: You Are Guaranteed To Go Broke If You Do This 14
Start With The End (Part 2) NOW YOU KNOW HOW MUCH MONEY YOU NEED. IT S TIME TO COME UP WITH A PLAN ON HOW TO GET YOUR MONEY WORKING FOR YOU. Remember you don t need a lot of money for this! Earl has $500,000 working for him, he makes only $12/hour. It takes patience and delayed gratification. 15
Stock Market Investing WHAT IS IT? What is a stock? Companies are divided into shares. Companies then sell some of their shares to raise money. You, as an investor, can buy some of these shares on the stock market. When you buy shares of a company, you become an owner of the company. So when you buy 1 share of McDonalds for $120, you are one of the owners of McDonalds. That doesn t mean much, but you make money when McDonalds makes money. Watch now: Budgeting 101 16
STOCKS How do you make money? APPRECIATION: YOU BUY STOCKS OF A COMPANY BECAUSE YOU EXPECT THE COMPANY TO BE MORE VALUABLE IN THE FUTURE. When a company becomes more valuable, the stock value goes up. So if you buy one share at $120/share and it goes up to $200/share. You just made $80 just by holding the stock. Dividends: Many large companies want to incentive you to invest in them. So they pay you to invest in them through something called dividends. This means a company will pay you every quarter (3 months) or every year as a thank you. 17
STOCKS Getting Started You buy stocks through a brokerage account. You can open one up very easily online through websites like www.etrade.com or www.tdameritrade.com. Find what is best for you and do your own research. Every time you buy or sell shares of stocks, you will have to pay commission to your brokers. For online brokerages this is typically between $7-$10 per trade. So if you sell 100 shares of a stock worth $1. You will make $90 from the sale. $100 from the shares - $10 commission. I recommend you start with virtual trading to see what it is like. You can practice investing with fake money to understand the ins and outs of stock investing. There are many of them out there, here is one that I found: http://studentstocktrader.com/ 18
Real Estate Investing WHAT IS IT? Everyone needs a place to live, companies need office space, parking lots need land, restaurants need buildings, and stores need retail space. You can make money on this by buying, building, or rehabilitating property and renting it out to consumers who need the property you own. CAN YOU START THIS WITH NO MONEY, NO EXPERIENCE, AND NO INCOME? Sure, using a creative investment strategy. But I don t recommend loading up on debt to buy real estate. I invest to buy cash flow, not a headache. Find partners who have money but no time, use your time to compliment your partner s money resources to buy a property together. You can find partners at Real Estate Investment Clubs in your area. No it isn t going to be easy. Yes you will have to work hard. And yes, you can do it. 19
Real Estate How Do You Make Money APPRECIATION: You buy real estate with the expectation that the value of the property will go up. This is much better than buying a car because the value of a car keeps going down with time, while the value of property in a good location should go up with time. RENTAL INCOME: This is like a dividend. Tenants pay you every month to live in or use your space. This is my favorite income source. The amount of money you make is predictable and it goes up every year when you increase rent. When I do my financial analyses, I don t count on appreciation because you can t estimate appreciation. I focus only on the money I make from rent. And if the property goes up in value, that is just icing on the cake. 20
Real Estate Getting Started vs. Stocks IF YOU WANT TO INVEST IN REAL ESTATE, you will need to have the following members on your team: a real estate attorney, a real estate accountant, a property manager, a contractor, a real estate agent, a title company, a real estate investment insurance company, and a bookkeeper. IT SOUNDS LIKE A LOT, BUT ONE MEMBER OF YOUR TEAM WILL HELP YOU FIND THE NEXT. IT IS A MORE SOPHISTICATED FORM OF INVESTING BECAUSE YOU NEED MORE RESOURCES TO DO THIS. 21
Real Estate vs. Stocks? It is more expensive to get started in Real Estate Investing than it is Stock Market Investing. But the advantage of Real Estate Investing is that you own a tangible asset. With the stock market, you have no control over what is happening with the company you own. And if the company you invest in goes bankrupt, you have nothing. In Real Estate Investing, on the other hand, you own a piece of property that you can control. If things are not going well, you can make changes to the property. And the value of your property will almost never go to zero. And keep in mind that most rich people store their wealth in real estate. 22
Important Information Buying Regardless of whether you are buying Real Estate or Stocks, the key is to be patient. Never chase a stock or a property. It is very tempting to buy when the news reports an investment growing very fast. DON T BUY WHEN EVERYONE IS BUYING. Wait for a buying opportunity when everyone is selling. That is when you will be able to buy the investment cheap: Ford (F) came down to $2 during the stock market crash. Now its trading for $13/share. A 600% increase. SOME Real Estate was selling for 10-20% of what it was just a few years prior to 2009. Then the prices jumped back up in a couple years. 23
Important Information Selling Don t be greedy. What goes up must come down. IF YOU ARE LOOKING TO SELL, DON T WAIT FOR THE PERFECT MOMENT You will never predict the highest selling price. A profit is a profit. It is better to have some profit than a loss. Once you sell, don t look back. It is history. Don t worry about how high the investment price has come. Take that money and invest it somewhere else to make you more money. 24
Compounding Your Profits THE POWER OF INVESTING AMPLIFIES WHEN YOU TAKE YOUR PROFITS AND RE-INVEST IT. That means taking your dividends and buying more stocks and taking your rental profits and buying more real estate. Now, your money is making you money & the money your money makes is making you money. Albert Einstein once said that compound interest is the most powerful force of all time. But again, the majority will not take advantage of it because they don t want to wait for something bigger in the future. 25
Compounding Demonstrated If you invest $4/day from the day you turn 18 until you turn 65, with a 9.9% return you will have over $1,000,000 If you invest $10/day from the day you turn 18 until you turn 65, with a 11% return you will have over $5,000,000 If you invest $20/day from the day you turn 18 until you turn 65, with a 12% return you will have over $14,000,000 ALL THE ABOVE REQUIRE YOU TO RE-INVEST YOUR PROFITS. 26
This Was Just The Beginning We have barely scratched the surface on how both of these strategies work. For more FREE information: Subscribe to our channel: New Youtube videos every week Instagram @MinorityMindset Periscope @M2JaspreetSingh (I m live every Saturday morning, 11am EST) Snapchat @M2JaspreetSingh 27
Learn Advise & This e-book is just to demonstrate that it isn t just how much money you make, but what you do with the money. FIND WHAT IS BEST FOR YOU. There are a lot of other things (legal, economical, logistical) that go into investing that we did not go into. So continue to learn and be sure to advise with an attorney for the local laws and regulations in your area. And talk to an accountant about the best tax and financial strategies for you. 28