How to Invest for Beginners (Step by Step)

Everything you need to know to get started investing in the stock market explained for beginners!!

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Chapters

00:00 Start Here
00:51 Why Do You Need to Invest In The Stock Market?
03:02 What Is The Stock Market?
04:31 Opening A Brokerage Account
05:52 What Should You Invest In?
08:24 A Live Example of Buying A Stock
10:09 Why Do People Lose Money In The Stock Market?

If you want to generate passive income, build wealth, and retire a millionaire, it is crucial that you learn how to invest in the stock market. In this video, I am going to walk you through everything a beginner needs to know about investing in the stock market.

Why Do You Need to Invest In The Stock Market?

There are two main reasons that everyone should be investing in the stock market. The first reason is because you cannot save your way to wealth. It is impossible to become wealthy by saving money because when you save, increasing the amount is active and there is only so much work that you can do as a person. Whereas when you invest money, increasing the amount is passive and your money is working to make you money, which grows in an exponential curve. The second reason is because investing helps you combat inflation. Each year the value of the dollar loses about 2% of its value. The market returns an average of 10% a year, which allows you to combat this inflation as well as grow your money.

What Is The Stock Market?

The stock market is a place that companies go to raise money. Companies will allow you to buy shares of their company, which means that you become an owner of the company. Companies will use your money, or investment, to try to grow and make more money, which could increase the value of your investment.

Opening A Brokerage Account

In order to invest in the stock market, you need to open something called a brokerage account, which is an investment account. There are many different types of brokerage accounts like a 401k/401b, Roth IRA, Traditional IRA, and Individual Investment Account. The difference between each of these accounts is how they are taxed. To open a brokerage account, simply choose a broker like Schwab, Fidelity, or Vanguard. Once you open an account, you can begin purchasing things in the stock market.

What Should You Invest In?

Once you have a brokerage account, you are probably wondering what you should invest in. In the stock market you can buy many things like stocks, bonds, mutual funds, ETFs, index funds, options, REITs, and many other things. However, the truth is, the majority of people should simply buy index funds and hold for the long term. In fact, this is the advise of one of the most successful investors, Warren Buffet. Index funds are basically a basket full of stocks that tracks a market index under a single ticker symbol. There is no such thing as a risk free investment; however, invest funds are less risk than stocks because the performance of the fund isn't based on a single company, but rather an average of hundreds of companies.

A Live Example of Buying A Stock

In the video, I show you a step by step example of how to buy a stock with the brokerage Charles Schwab.

Why Do People Lose Money In The Stock Market?

Many people choose not to invest in the stock market because they think it is too risk or have heard people losing a lot of money in the stock market; however, there are reasons why people lose money in the stock market and I share three. The first reason people lose money in the stock market is because they are trying to outperform the market. The market returns an average of 10% a year and some people think they can beat that by choosing individual stocks and lose money. The second reason is panic selling. The market will go up and down; however, when the market goes down, some people will panic and sell their investments at a loss. It is important to understand that when you buy something in the market you have shares, not money, and if you believe in your investment you should hold for the long term. The final reason is being impatient. Investing takes decades of time and many people want quick results and make decisions that cause them to lose money.

**I am not a financial advisor. The ideas presented in this video are for entertainment purposes only. You are responsible for the financial decisions that you make. Links above are affiliate links where if you click and order, I will receive a commission at no cost to you. **

[GalaxyTabFamily]

This is information that every parent needs to share with their young adult children.
Conventional saving is not enough.

[nattyalexander]

Thank you for the live demonstration. Many people talk about investing but never really show how. This was great!

[dominicruz]

Good simple words and easy to understanding.

[rocioocampo]

Thanks for educating us on this topic 😊

[bukki]

I am at the beginning of my "investment journey" I plan to put 185K into dividend stocks so that I will be making up to 30% per year in dividend returns. Any advice for stocks that can outperform
the S&P500 this 2024?

[IonelaCh]

It's an interesting concept this from the standpoint of a frugal person. Basically, we believe in a frugal lifestyle, but invest towards wealth in the companies that rely on consumerism to grow and make the shareholders richer. The case of Amazon is very poignant in this respect. Amazon grows because people buy a lot of stuff they don't need to fullful wishes specifically designed for them by algorithms, to benefit people who are frugal and have enough money to try and secure a future of potential financial independence on the assumption that those other people will stay poor and in debt and keep buying. It's a strange world we live in.

[shigaxn]

As always, great video, Austin! Felt like my first day in finance kindergarten.

[Iammajorkey]

Thank you Austine. Pls we need more videos on investing 😊

[brin]

The live demonstration is all that I’ve wanted to see, THANK Seriously. ❤

[plappin]

Top-notch video, Austin -- excellent job explaining the market in layman's terms!

[bullitt]

Uncle Jim Bob 😂😂😂. Great video! Thank you for the education!

[tia]

Helpful video thank you. I just starting investing in an index fund 2 weeks ago. Left it a bit late at 35 years old but here goes. It's so scary but exciting 😅

[benleonard]

Thanks for this. Occasionally, i have to remind myself why i'm putting money away for a long time and up pops your video 😂 . Regards from Ireland 🇮🇪

[kingchris]

Straight to the point, no fluff/bs. 👍

[Luncheon]

Lately I have taken to downloading your videos here on YouTube premium so I can watch them again later at my convenience 😊 thanks for the great content as usual Agustin.

[bigelbow]

Thanks for this. I always advice people who wish to heaar me that you can not just be rich by saving. You need to take extra measures. Has anyone here heard of larysa caba?

[kwokweng]

your videos are very helpful your hard work

[disruptapps]

Ah ha! I had a feeling you were going to do investing videos! Nice!

[carmenalabat]

Excellent content on investing. You did a great job explaining the concept of investing. Can you make a series dealing with investing . For example how does the taxes work, how do you withdraw money once you retire, when do you know when is the best time you sell and how you go about it etc…. As these would be so helpful to understand as you did a terrific job of explaining a so called difficult subject and simplified it where it made sense. Thank you Austin so much🎉

[katrish]

Thanks so much for that information, I had no idea it was that easy to invest!