Stock Market For Beginners

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Who Is Ryan Scribner?
Full time YouTuber, Blogger, Affiliate Marketer.

Self taught stock market investor.

Stock Market For Beginners
Get Your Butt Out Of Debt
We Know That...
Consumer debt is at all
time highs.

Average American household

carries $16k+ in credit card debt.

Average credit card interest rate

is above 19%.

Basically, we have a lot of debt.

Hypothetical Scenario
You have $100 in the bank.
You owe your friend Bill $100.
Bill is charging you $2 a month in interest.

Paul asks you if he can borrow $100.

Paul offers to pay you $1 a month in interest.

Should you…
A. Keep $100 In The Bank
B. Pay Off Your Debt Owed To Bill
C. Loan Your Money To Paul
A. Keep $100 In The Bank
Most people would choose this answer, as it is
the most comfortable.

Average interest paid from the bank

is around 0.05% per year.

That is just $0.05 of interest earned

on $100 in 12 months.

In one hand, you are paying Bill $24 per year.

In the other hand, you are earning just $0.05

per year loaning $100 to the bank.
B. Pay Off Your Debt Owed To Bill
This is the best option, and this is what you
need to do before investing.

Bill is charging you a very high interest rate.

No matter what you invest in, it won’t exceed

what you are paying him.

The best investment you can make right now

is clearing up your debt.
C. Loan Your Money To Paul
It is tempting to loan that “benjamin” out to Paul.

At that point, you are an investor!

But… wait a second.

Paul is going to pay you $1 a month

or $12 over one year.

Bill is charging you $2 a month

or $24 over one year.

You LOSE $12 for every year you do this.

 This = You (Probably)
Bill = Credit Card Company Paul = Stock Market

The Bank
Real Life Scenario
$16,000 Credit Card Debt @ 19.24%
$3,078.40 Interest

$5,000 In The Bank @ 0.05%

$2.50 Interest

Stock Market @ 8-10% (Average Return)

$400 - $500 Return Potential

Net (Profitability)
$2,578.40 - $2,678.40 Loss
 Car 5%
Student Loans 9% Credit Card 20%
Mortgage 4% Medical 15%

0% 10% 20%
Action Steps
Share this course with a friend.

Create a list of your debts, including the amount and interest rate.

Consider what debts you need to pay off before investing.

A general rule of thumb is debt above 8% interest.

Begin knocking out the debt.

Stock Market For Beginners
In Case Of Emergency
QUESTION: Why are you in debt?
ANSWER: ______ came up.
REAL ANSWER: I didn’t plan for _____.
Eliminating The Need For Debt
Once you are debt free, or in a position where your anticipated returns exceed
what you are paying in interest,
it is time to fix the real problem.

The real problem is that you

got into debt in the first place.

Unless you are taking advantage

of rewards, there is no use for
a credit card.

The emergency fund will prevent the need for debt in the future.
How Much Money?
Most experts agree 6 months of expenses should be held in a liquid account.

This might take a while… so start

with $1,000.

Monthly Expenses: $3,000

Emergency Fund: $18,000

You DO NOT invest this money.

You put it in a CD or high yield

savings account.
Why You DON’T Invest Your Emergency Fund
The stock market is volatile,
meaning prices move up and down.

If you hold individual stocks, you should

expect to see a 20% or greater dip
at some point during that investment.

Often times, holding on to these

short term losers is the best strategy.

However, if you are short on cash, you have no choice but to sell.
Bought @ $91
Per Share

Dipped To $72
Per Share

Drop Of 21%
Savers Are Losers
For most people, saving money in the bank is a
guaranteed way to lose it.

NOT because you are going to spend it.

NOT because someone will steal it.

The reason you will lose it is because of inflation.

Inflation = Termites
Inflation
Increase in prices over time.

Decrease in buying power over time.

Loaf of bread 1930: $0.09

Loaf of bread 2018: $2.37

Over the last few decades, inflation has been

around 2% per year.
Traditional Bank Account
Thousands of locations all
over the world.

Tens of thousands of
employees.

Paper statements.

Customer service.

All Of This = EXPENSIVE!!!

Who pays for it? You.

Traditional Bank Account + Inflation
Inflation = 2%

Interest = 0.05% $1,000 $19.50

$5,000 $97.50
Net = 1.95%
$10,000 $195

$25,000 $487.50

$100,000 $1,950

$250,000 $4,875
Online Banks
ZERO branch locations.

ZERO paper statements.

FEWER employees.

Online Customer Service.

All Of This = CHEAP!!!

Who Saves? You.

Best Online Savings Accounts
#1: Betterment Everyday Savings 2.44% APY

#2: Wealthfront Cash 2.32% APY

#3: Marcus Goldman Sachs 2.15% APY

#4: Ally Bank 2.10% APY

*Rates fluctuate with the market, these are as of 8/7/19

Betterment Everyday Savings
$10 Minimum Opening Balance

2.44% APY (8/7/19)

ZERO Fees

No Minimum Carrying Balance

FDIC Insured Up To $1,000,000

Do NOT Need Betterment Investing Account

SIGN UP FOR BETTERMENT HERE!
Action Steps
Calculate your emergency fund needs.

General rule of thumb is 6 months of living expenses.

A good goal to start with is $1,000.

Open an online savings account.

Transfer your emergency fund to this account or start making weekly transfers if
you do not have one.

Emergency fund is a MUST before investing!

Stock Market For Beginners
Best Investing Strategies
What Is A Brokerage?
A brokerage is essentially a stock dealer.

When you are in the market for

a Ford truck, you go to a Ford dealer.

You don’t just call up Ford.

When you are looking to trade

stocks, you do so through a
brokerage.

You can’t call up NYSE or NASDAQ

and ask to trade a stock.
Commission Free Brokerages
In the past, you had to pay commissions to trade stocks.

Now, there is an array of commission free brokerages out there.

The good news is, there has never been a better time to invest.
Investment Strategies
There are a few investment strategies out there.

Your brokerage will depend on which strategy you plan on following.

Passive Investing - Buy broad market ETFs, hold and DCA.

Dividend Investing - Buy stocks that pay dividends, reinvest for compounding.

Stock Picker - Picking individual stocks, primarily growth stocks.

Active Trader - Trade in and out of stocks capitalizing on small price changes.

Day Trader - Trading in and out of stocks on a daily basis.

Passive Investing
In the past, this was going to a FA and investing in mutual funds.

These are actively managed collections

of investments.

Roughly 1 in 20 domestic large cap

mutual funds beat the market.

In terms of passive investing,

ETFs are the way to go.

Exchange Traded Fund - Low fee passively

managed fund that tracks an underlying benchmark like the S&P 500.
Passive Investing Struggles (DIY)
You need to figure out your asset allocations.

You need to make weekly/monthly contributions.

You need to rebalance your portfolio.

You need to determine how to sell

in a tax efficient manner.

You need to change your allocations

as you age.
Dividend Investing
Dividends are payments to shareholders for
holding on to the stock.

This type of investor is looking for safe

dividend stocks.

Remember, dividends are never guaranteed!

Reinvesting these dividends allows

for compounding to take place.

“The 8th Wonder Of The World” - Einstein

Dividend Investing Struggles
Finding safe dividend stocks
to invest in.

Using a brokerage that has

a DRIP.

Using a brokerage that

offers fractional shares.

Stomaching a dividend cut.

Stock Picker
Stock pickers try to beat the market through a competitive edge.

Statistics tell us most are

unsuccessful with this strategy.

This typically involves fundamental

analysis, which is reading and
interpreting important financial
documents to unearth potential value.

This type of investor needs to have a

higher risk tolerance, as individual stocks are more volatile.
Stock Picker Struggles
It is difficult to find inefficiencies in the market
on a consistent basis, but not impossible.

This type of investing is high stress.

Finding a platform that has the research

tools you are looking for.

Learning how to conduct fundamental

stock analysis.

Understanding how to interpret financial

documents and ratios.
Active Trader/Day Trader
While a stock picker may hold stocks for years or decades, an active trader is
looking to hold stocks for a much shorter duration of time.

In most cases, these are 2 to 5 day holds.

Active traders and day traders rely 100% on technical analysis or the charts.

In the short term, stocks solely trade based on the emotion in the market.

Traders look for certain indicators and aim to capitalize on these micro moves.

Typically looking for many small returns (2 to 5%)

Trading Struggles
This is a high risk form of trading,
and most are unsuccessful.

About 1% of day traders are

predictably profitable.

Huge learning curve to trading.

Need to be 100%
emotionless when trading.

Greed turns winners into losers.

M1 Finance
M1 Finance is my top pick overall for dividend investors, retirement and passive
investors.

They are 100% fee free and commission free.

Features Include…
Fractional Shares
Automated Rebalancing
Dividend Reinvestment (Over $10)
Prebuilt Portfolios
Retirement Accounts
Target Date Funds
Custom & Expert Pies
With M1 Finance, can follow a passive
or active approach.

The root of this brokerage is the portfolio

or “pie.”

Each pie can hold up to 100 stocks or ETFs.

With fractional shares, you can purchase

as little as 1/10,000th of a share.

This allows you to build a well diversified

portfolio from day 1 without a large investment.
$112.91 Portfolio
 $10 Balance

Pays A Dividend
Automated Rebalancing
Once you set your target allocations, your numbers will begin to drift.

This is because all stocks and ETFs

behave differently.

M1 Finance automatically rebalances

your portfolio as you add or
withdraw money.

When you add money, it is directed

towards whatever you are low in.

When you take out money, they sell whatever you are overweight in.
Target = 50% Actual = 47.9%
Target = 30% Actual = 29.4%

Target = 10% Actual = 11.8%

Target = 10% Actual = 10.6%
Expert Pies
M1 Finance offers over 30 expert pies for passive investors.

Unlike other financial institutions, they do not charge any asset management fees.

This Includes…
Target Date Retirement Funds
Stock & Bond Allocations
Hedge Fund Followers
High Dividend For Income
Responsible Investing
SIGN UP FOR M1 FINANCE HERE!
Webull
Webull is my top pick overall for stock
pickers and traders.

They are 100% fee free and do

not charge trading commissions.

Features Include…
FREE STOCK! Just For Funding With $100
Virtual Trading Simulator
Commission Free Short Selling
Extended Hours Trading
Advanced Research Tools
FREE STOCK BONUS
Webull is looking to gain market share, so they are offering new users a free stock
just for signing up.

First, you have to open an account with this link.

Then, you have to fund it with at least $100.

It is a lottery system, the stock is worth $3 to $300.

Promotion is subject to change.

Virtual Trading Simulator
Before investing or trading stocks, one of the best
ways to learn as a beginner is by paper trading.

Webull comes with a built in, fully functional

trading simulator.

This also allows you to familiarize yourself with

the platform risk free.
SIGN UP FOR WEBULL HERE!
Betterment
Betterment is my top pick overall for passive investors who want a 100% hands off
investing experience and retirement investors.

Betterment does all the leg work for you for an

annual asset management fee of 0.25%.

For comparison sake, a traditional Financial Advisor

usually charges a 1% fee.

Betterment follows a passive approach of broad market

exposure through index funds, including top quality funds
from Vanguard and BlackRock.
Betterment Features
Variety of different retirement accounts.

Automated rebalancing.

Goal based, hands off investing.

Automated asset reallocation.

Tax loss harvesting.

Fee structure is the same regardless of balance.

Betterment Premium
Designed for higher net worth investors looking
for more guidance.

Comes with in depth advice on other investments

outside of Betterment.

Unlimited access to a team of CFP professionals.

0.40% Asset Management Fee

$100,000 Minimum Balance

Tax Loss Harvesting
Sounds complicated, not really complicated.

Betterment sells investments when given the opportunity and buys back similar
ones to recognize an
“artificial loss.”

This can reduce taxable income

by as much as $3,000 per year.

Betterment has found that

Tax Loss Harvesting boosts returns by as much as 0.77%,
meaning it pays for itself.
SIGN UP FOR BETTERMENT HERE!
Firstrade - International Investors
Unfortunately, options are fairly limited for international investors.

There is one option, Firstrade, which supports close to a dozen countries outside
of the US.

Firstrade is an excellent
brokerage with zero trading
commissions, dividend
reinvestment and retirement accounts among other things.

Firstrade is the oldest brokerage on this list, dating back to 1985!

US investors are also eligible for a Firstrade account.

Stock Level DRIP
Firstrade is the only free brokerage I have come across that allows for Stock Level
Dividend Reinvestment.

Available on all shares trading

above $4 per share.

Allows for the purchase of

fractional shares, not just
whole shares.

100% commission free!

SIGN UP FOR FIRSTRADE HERE!
Cheat Sheet

Dividend Investors M1 Finance Firstrade (Stock Level DRIP)

Active Retirement Investors M1 Finance

Passive Retirement Investors Betterment M1 Finance (Zero Fee)

Stock Pickers Webull

Active Traders Webull

International Investors Firstrade

Action Steps
Determine your overall investment objective.

Sign up for Webull and get a free stock/try the trading simulator.

Decide on a brokerage, or test a few out!

Collect the necessary information to open a brokerage account.

Open and fund a brokerage account.

Stock Market For Beginners
Why Most People Suck At Investing
Principle #1: How To Make Money
Money is made through the stock market in one of two ways.

The first, relatively straightforward,

is dividends.

By collecting and reinvesting these

dividends, you are allowing your money
to grow exponentially.

The other way you make money is

through asset appreciation.

Essentially, this is buying low and selling high.

5 Year Growth
Facebook (FB) $73.63 to $188.45 +156%

Ford (F) $17.31 to $9.26 -46%

United Health (UNH)

$81.47 to $249.22 +206%

$57.09 to
Scotts Miracle Gro (SMG) +96%
$111.84
GROWTH INCOME

Not Profitable Profitable

Growing Fast Slower Growth
No Dividend 1.5% Dividend
Profitable
Zero Growth
6% Dividend
Principle #2: Buy Low, Sell High
How is money made? Through asset appreciation or dividends.

Money is NOT made by buying high, selling

low, buying something else high, selling
that next week and repeating this cycle.

This is the most important principle to

understand.

Being a stock picker is a long term

investment (1Y to 5Y in most cases).
Principle #3: Recognize Speculative Bubbles
And… AVOID AT ALL COSTS!

Speculative bubbles form when the

“herd” moves into a particular asset.

Recent examples include…

Real Estate Bubble 2008
Marijuana Stocks 2016-2017
Bitcoin 2017

If your friends who know nothing about investing are buying it, run far far away!
INVESTINGSIMPLE.COM
Principle #4: Ignore The Noise
Noise is everywhere when it comes to the stock market.

In most cases, the best move to make is to do…

nothing!

Keeping up with the stock drama is a great

way to make an emotional decision.

When investing in the stock market,

you need to make EMOTIONLESS decisions.

Turn off the talking heads, formulate your own well researched opinions and sleep
easy at night.
INVESTINGSIMPLE.COM
Principle #5: Stock Market = Pendulum
Benjamin Graham - “The stock market is like a pendulum, forever swinging
between unsustainable optimism and unjustified pessimism.”

Warren Buffett - “Be greedy when others are fearful and

fearful when others are greedy.”

As a savvy stock picker, you want to buy from the

pessimists and sell to the optimists.

Optimism = Greed

Pessimism = Fear
Principle #6: Don’t Put All Your Eggs In One Basket
One of the biggest mistakes new investors make is placing an all in bet on one
particular stock.

That may be fine… if you are investing $1,000.

That is not fine if you are investing

thousands or tens of thousands of dollars!

Diversification becomes more important

as you invest more money.

General rule of thumb is to never put more

than 20% of your money into any one asset.
Principle #7: Don’t Over Diversify
If you are looking for diversified exposure, buy an index fund.

Do not buy dozens of different stocks.

I have mentored people in the past that owned in excess of 50 stocks!

General rule of thumb as a beginner is to own no more than 5 stocks.

Keep track of earnings dates, annual reports, major company news etc.

Even owning 5 company stocks is enough to keep you busy.

INVESTINGSIMPLE.COM
Principle #8: Low Share Price Is NOT Cheap
Simple logic would tell us that a $1 stock is cheap and a $1,000 stock is
expensive, and this is 100% false!

Market Capitalization = Outstanding Shares X Share Price

Company A: $1B = 100,000,000 X $10 Per Share

Company B: $1B = 1,000,000 X $1,000 Per Share

Company A has the same value as Company B!

INVESTINGSIMPLE.COM
Principle #9: Long Term Tax Advantage
There is a significant tax advantage associated with being a long term investor
versus a short term trader.

Short term capital gains are taxed as ordinary income, the highest rate.

Long term capital gains are taxed at a lower rate, saving you as much as 20%
depending on what bracket you fall into.

Short Term = 1 Day to 365 Days

Long Term = 366 Days or more

$10,000 Cap Gain @ 37% = $3,700
$10,000 Cap Gain @ 20% = $2,000
Action Steps
Determine how you plan on making money with the stock market (income, growth
or a blended approach?)

Study a few companies that come to mind and try to determine if they are growth
or income plays.

Try to identify a few speculative bubbles that exist in this current market.

Calculate your short term and long term capital gains tax rates.
Stock Market For Beginners
Invest Like A Caveman
Build A Shelter
Just like the cavemen sheltered themselves from the elements,
you too can shelter yourself from the IRS!

No, this does not mean dodging phone calls or

creating offshore accounts.

In most cases, it is as simple as opening up an

account called the Roth IRA.

This Roth IRA is the most powerful income generating

tool you have available to you as an investor.

INVESTINGSIMPLE.COM/ROTH-IRA
What Is A Roth IRA?
This is a type of investment account that potentially allows you to earn millions, all
100% tax free.

Most people confuse this account with the

401k, which is also a useful retirement tool.

The Roth IRA is funded with post-tax

income while the 401k is funded with
pre-tax income.

With the 401k, you are taxed on the growth

on the way out. With the Roth IRA, you are
taxed on the contributions on the way in.
Roth IRA Benefits
1. Tax Free Retirement Income
2. No Required Minimum Distributions
3. High Income Loophole “Backdoor Roth”
4. Access To Contributions If Needed
5. Investment Freedom (Unlike 401k Plans)
6. $10,000 Earnings Towards First Home Purchase
Who Is Eligible For A Roth IRA?
Earn $122,000 or less as a single filer to fully contribute.

Earn $193,000 or less as MFJ to fully contribute.

Must have earned income.

If you are over these limits, look into the “Backdoor Roth IRA.”

Essentially, you open a Traditional IRA and convert it to a Roth IRA.

You can also rollover a Traditional IRA or 401k to a Roth IRA!

Why Use A Roth IRA?
$6,000 Invested Per Year From 20 To 65
10% Return = 2% Inflation = 8%

Roth IRA = $0 Taxable Account = $409,806.74

Best Strategy (For MOST People)
In MOST cases, this strategy makes sense for your investing plan.

Assuming you ALREADY have your emergency fund in place…

1. Contribute the maximum to your 401k that your employer will match.
2. Maximize contributions to a Roth IRA.
3. Put the excess in a Taxable Brokerage Account.

When in doubt, sit down with a financial advisor! You can find a fee only financial
advisor who is not making any commissions from your investments.
Best Strategy Example
John has $3,000 a month in living expenses.

His employer matches 401k contributions $0.50 on the dollar up to 6% and at this
job he earns $50,000 a year.

1. $18,000 High Yield Online Savings Account (Betterment Everyday)

2. $3,000 / Year 401k Contribution (Company Kicks In Additional $1,500)
3. $6,000 / Year Roth IRA Contribution (M1 Finance or Betterment)
4. $2,500 / Year Taxable Brokerage (Based On Strategy)
Where To Open A Roth IRA?
Option #1: M1 Finance
● 100% fee free retirement accounts.
● Expert pies include TDFs.
● Also have basic stock/bond allocations.
● Build a portfolio from scratch or invest in
one of the expert pies.
● Can put whatever investments you want
into it.
● Keep more of your money invested by
avoiding fees entirely.
M1 Finance!
Option #2: Betterment
● Sit back and relax, put Betterment in the
driver’s seat and have them build you a
retirement account.
● 0.25% asset management fee for
Betterment Digital.
● They rebalance and reallocate your
portfolio as needed.
● Added benefits of tax loss harvesting and
tax coordinated portfolio.
Betterment!
Action Steps
Determine if you are eligible for a Roth IRA.

Find out if your employer offers any kind of 401k match or incentive.

Do some research on your 401k provider to see if it is a good one or not.

Open a Roth IRA (you don’t need to contribute all at once).

Stock Market For Beginners
Why Stock Prices Change
Share Price
As mentioned earlier, share price is a representation of the total value of the
company split up into individual shares.

The value of the underlying company does

not change, but the share price does
every few seconds.

As soon as you buy a stock, that

price begins to change.

There are a number of reasons why this

Happens. Some are normal, while
others are red flags.
Reason #1: Earnings Reports
The day before, on and after earnings reports are almost always more volatile.

Publicly traded companies have to report earnings on a quarterly basis.

Wall Street Analysts (aka noise) place bets on how they expect the company to
perform.

A beat USUALLY sends the stock up.

A miss ALMOST ALWAYS sends the stock down.

Some companies choose to offer forward looking guidance, and changes to these
guidance figures can send the stock in either direction too.
Good News Gets Priced In
If a company is expected to beat expectations, often times that earnings beat is
already priced in.

As a result, the stock could be flat or even decline despite the earnings beat.

You should never assume that a beat in expectations will send a stock soaring.

Betting on earnings is high risk, and not something I would recommend.

Reason #2: Dividend Changes
Dividend changes almost always result in movement of the share price.

Remember, dividends are never guaranteed!

They can be increased, decreased or

discontinued at any point in time.

Going after high yield dividend stocks

is almost a certain way to learn this lesson.

When the share price is falling and the

dividend yield is in the double digits,
run far far away!
Is The Dividend Safe?
As an income investor, you want to make sure the dividend is safe.

This means that it is unlikely that the dividend will be cut or eliminated.

Dividend Coverage Ratio

Earnings Per Share / Dividend Per Share

Below 1 = Company Paying More Than Earning

1 = Company Paying 100% Earnings In Dividends
1 To 1.5 = Could Be Unsafe, Cut On Horizon
1.5 To 2 = Probably Safe, Healthy Earnings And Dividend
AT&T Dividend
Coverage Ratio

2017
$4.76 / $1.97 = 2.4
Great Coverage, Healthy

2018
$2.85 / $2.01 = 1.4
Could Be Unsafe

2019 (Half Year)

$1.06 / $1.02 = 1.04
Paying Almost All Earnings
In Dividends
Reason #3: Products
Information and news surrounding the products or services offered almost always
have an impact on the share price.

A Few Examples Include…

Apple releasing the latest and greatest iPhone
Chipotle lettuce recall for e-coli bacteria
Johnson & Johnson baby powder lawsuit

Pay attention to any product

releases/recalls for companies
you are invested in.
Reason #4: Layoffs
Layoffs and restructuring are not always a bad thing.

However, Wall Street usually reacts negatively to new layoffs within a company.

For example, a lot of businesses are in cyclical industries.

Reason #5: Acquisitions
If your company is acquired by another company, or if your company acquires
another company, you better bet the share price will move.
Public To Private
Reason #6: Stock Split
If you find out your stock is getting split, that is almost always a good sign.

Companies may elect to split up shares into smaller chunks when the share price
becomes out of reach for average retail investors.

However, in this era of fractional shares, this is becoming less and less common.

For Example…
On June 9th Apple completed a 7 to 1 stock split.
For every share of Apple that you owned, you now received 7 shares.
This made the share price more accessible.
Reverse Stock Split
Just as shares can come apart, they can come back together.

When shares are being glued back together or consolidated, this is almost always
a sign for trouble.

Companies that trade on the NYSE and NASDAQ have to adhere to certain listing
requirements. For example, if the share price gets too low, they can get delisted.

In order to avoid being delisted, a company can complete a reverse stock split and
consolidate many shares into one.
Reason #7: Management Changes
If the company is a ship, the management team effectively make up the captain.

Whenever there are changes in management, expect the stock to move.

In many cases, changes in management are a good thing for investors.

However, a red flag is when you see a member of the management team jumping
ship, especially if it is a CFO.
Reason #8: Other Bad News
There are a number of other types of bad news that can send the share price
falling fast.

This Includes…
Scandals
Accounting Errors
SEC Investigations
Data Breaches
Reason #9: Market Correction
90% of the time, a stock moves because of a market correction.

“Rising tides lift all ships.” - Someone

When this happens, there is absolutely no reason for concern.

If you see your stock deviating from what the market is doing, that is a reason for
concern.
Reason #10: Interest Rates
Interest rates can have a huge impact on the stock market.

Low Rates = Cheap $$$ = Stimulated Economy

High Rates = Less Borrowing = Growth Discouraged

The Federal Reserve uses the Federal Funds Rate as a gas pedal and brake for
the overall economy.

The Federal Funds Rate is the interest rate at which money is loaned to banks.
Reason #11: Unemployment
The unemployment rate is typically a good indicator of how the economy is doing.

Roaring Economy =
Lots Of Hiring =
Low Unemployment

Contracting Economy =
Layoffs =
High Unemployment
Action Steps
Pay attention to the news (noise) for a few days.

See what major events take place and what type of impact it has on the overall
stock market.

Keep track of when the stocks you are invested in are reporting earnings and tune
in to the webcast.

If a stock you own takes a dip, do not panic. Simply follow the trail of breadcrumbs
to determine what caused the dip. After that, make a sound evaluation of whether
or not you want to own this company.
Stock Market For Beginners
Beyond The Stock Market
Asset Diversification
Just as you should diversify what stocks you own, you should also diversify what
assets you own.

Beyond the stock market, there are a

number of different assets you can invest in.

This Includes…
Cryptocurrency
Gold/Precious Metals
Bonds
Physical Real Estate
Passive Real Estate
My Portfolio
Cash - $50,000 to $100,000 in liquid cash

Stock Market - Own a few individual stocks and ETFs

Bonds - Very low allocation to bonds since I am in my 20s

Physical Real Estate - Own a multi-family property as an owner occupant

Crowdfunded Real Estate - $5,000 with Fundrise (scaling up to $25,000)

Cryptocurrency - $3,000 Speculation (even split between Litecoin, Bitcoin and

Ethereum)
Bonds
As you get older, you want to take fewer risks with your investments.

Stocks, being higher risk, have higher returns.

Bonds, being lower risk, have lower returns.

In general, bonds are safer than stocks.

If you invest with a financial advisor,

Betterment, M1 Finance, you will be
investing in a portfolio of stocks and bonds.

A 20 year old might be 90/10 while a 60 year old might be 30/70.

Physical Real Estate
Owning physical real estate is one of the best investments you can make.

Real estate allows you to take advantage of something called “leverage.”

One of the best strategies for owning physical real estate is the owner occupied
real estate investor.

Essentially, instead of buying single family you purchase a 2 to 4 unit and use that
rental income to offset the mortgage.

This can allow you to direct hundreds if not thousands more to your other
investments.
My Numbers
$475,000 Property

Main House, 2 Apartments, Cottage, Barn

3.5% FHA = $23,000 Down ($10,000 Concessions)

Mortgage = $3,100/Mo
Apartment 1 = $1,000/Mo
Apartment 2 = $700/Mo
Barn = $400/Mo
Cottage = $700/Mo

True Cost = $300/Mo

Crowdfunded Real Estate
This is a relatively new investment, but it is one of my favorites.

Private real estate is a highly sought after investment, traditionally with high
barriers to entry ($1,000,000+).

Changes to legislation allowed for a new form of private real estate investing
through crowdfunding.
How It Works
Old Model New Model

● Ben $1,000,000 ● Sam $500

● John $1,000,000 ● Joey $1,000
● Jerry $5,000,000 ● Carl $2,000
● Jack $3,000,000 ● Sarah $1,000
● 4 People Raise $10M ● 5K People Raise $10M
SIGN UP FOR FUNDRISE HERE!
Cryptocurrency
For me, this is a
total speculation.

Speculation =
Only invest what you
are willing to lose!

Buy through CoinBase

and store offline on a
hardware wallet.
SIGN UP FOR COINBASE HERE!
Action Steps
Consider what other assets should be a part of your portfolio.

Create a checklist or spreadsheet of all the assets that you own.

Check up on your stock/bond allocations to make sure you are not too aggressive
or conservative for your goals.

Consider the long term benefits of owner occupied real estate investing.
Stock Market For Beginners
Additional Resources
The Intelligent Investor
● Value investing explained
● Mentor of Warren Buffett
● Investment vs Speculation
● Identifying the intrinsic value of a
stock or investment
● Long term investing and ignoring
the current market
Snowball: Warren Buffett Biography
● The life of Warren Buffett
● Success stories and failures
● Rags to riches from quiet
beginnings to at one point
becoming the richest man on earth
● The importance of starting early for
compound interest
● How to have a well rounded life
Stock Investing For Dummies
● Best book for fundamental stock
market education
● Understand corporate hierarchy
● Interpreting key financial
documents
● Buying a company, not a stock
● Practical diversification
Rich Dad, Poor Dad
● Best personal finance book,
especially for those in the stage of
paying off debt
● Assets vs Liabilities
● The difference between his poor
dad (his dad) and his rich dad (his
friends dad)
● Why you don’t need high income to
become rich
The Richest Man In Babylon
● Great for budgeting fundamentals
and the importance of paying
yourself first
● Basic money principles taught in
the form of stories
● Learning the basic financial
disciplines you need to follow
 Thank You!
freeinvestmentcourse.com