The Assets That Replace Your Paycheck

I'm not telling you what to invest in in this video. I'm just giving you examples. That way, you can get an idea of how this type of passive income investing works. And while I'm at it with the disclaimers, I should also tell you that investing has risks. You are never guaranteed to make money when you invest. You might even lose money. So, always, always, always do your own due diligence and never blindly listen to a random guy on YouTube. SPG is Simon Property Group and this is a company that invests in a lot of mixed use and major property developments throughout the United States. and they are paying a 6.5% annual yield. So, if you invest $1,000 into this REIT, you are going to get $65 back in passive income without doing anything. And you also don't have to deal with any tenant issues because your REIT, the company is going to deal with that headache. So, you're investing in a company that's investing in real estate and your company is doing all the work and all the headache and all the management stuff with the real estate. You're just getting that passive income. NLY is Analy Capital Management and they do something a little bit different. So they don't actually own the physical real estate properties, they own the loans. They invest in commercial mortgage back securities and they pay an 11 and a half% annual return. So if you go out and you invest $1,000 into NLY, you'll make about $115 in passive income while doing nothing while this company does the work. And the bigger the dividends get, the more risk there is. So these are things you want to keep in mind. At this point, what a lot of people start doing is they start googling how to find the highest dividend yielding stocks and then they just invest in companies that are paying the highest dividends. As somebody who did that during his college years, let me give you a little bit of a warning. You should never solely make your investment decision based off of what dividend a company is paying because that dividend yield can be very deceiving. Let's say you want to invest in this hypothetical company that is trading for $100 a share and they're paying a 5% annual yield. So, if you invest $1,000 into this company, they'll pay you $50. If you invest $100 into it, they'll pay you $5 over the next year. Now, what you want to pay attention to is how strong the actual company is. Because let's say this company starts to do really bad. They start losing money and they're on the verge of bankruptcy and this stock tanks in price. They go from $100 a share to $20 a share because they're doing really bad financially. At this point, if they have not adjusted their dividends yet, it will look as if they're still paying this $5 annual yield, right? This is how much money they were paying here. And assuming they haven't adjusted their dividends, it will look like they're paying a $5 annual dividend for a $20 share price of the stock. That is what a 25% return on your money. So, people might look at this and say, "Wow, this company is amazing. They're paying 25% a year on my money." But what you don't understand is that this company might be on the verge of bankruptcy. So yeah, you might make a little bit of dividends, but then next thing you know, this company could go bankrupt or if they don't go bankrupt, they can also cut their dividends to zero. And now you are owning a company that is not really doing anything. This is why it's very important before you start investing in companies for the dividends that you're analyzing their financials and you're analyzing the fundamentals of a company. that where you're investing in a company that you want to own that is going to be more profitable in the future than it is today. And if this is very overwhelming or if you don't want to do this or if you don't know how to do this, then you might want to consider looking at three index funds. With an index fund now, you don't have to find the perfect company to invest in. You can invest in a fund or a group of stocks which give you exposure to a bunch of different stocks. And now, if you're investing for dividends as passive income, you can invest in a fund that is giving you this passive income. There's a few ways you can go about this. One thing you can do is invest in a fund like VO that's going to give you exposure to the general stock market. So VO invests in the top 500 companies in the stock market. So if you invest in VO, you're getting exposure to the top 500 companies in the stock market. At the time of me recording this video, VO is paying a 1.75% dividend. So if you invest $1,000 into VO today, over the next year, you can expect to make something like 17 $18 in passive income from dividends. Again, this is money you're making by doing nothing except just throwing your money into this fund. And you also have exposure to the top 500 companies in the stock market. So, the goal is also to see your $1,000 principle, your investment go up in value as well. VNQ is the Vanguard Index Fund for REITs. So, if you want to invest in REITs and get exposure to real estate, but you don't want to do all that work to find the best REIT to invest in and risk your REIT going bankrupt, one thing you can do is invest in VNQ because this fund gives you exposure to a whole bunch of different REITs. At the time of me recording this video, VNQ is paying 3.85% a year in dividends. VYM is the Vanguard index fund that gives you exposure to high dividend yielding companies. So, if you want to invest in companies that are paying high dividends, and you don't want to go out and find all these companies, you can just invest in a fund like VIM, which invests in high dividend yielding companies. At the time of me recording this video, VM is paying 3.62% a year in dividends. Again, these are not life-changing amounts if you just invest $1,000, but it's the foundation to building wealth. That way, you can create a whole new passive income stream because this is money you're making without doing anything. You just throw your money into these funds and then your funds are investing in companies which are doing the work to earn your money and this is what you're making without doing anything. The fourth way you can get passive income is by investing in crowdfunded real estate. Investing in crowdfunded real estate is similar to investing in a REIT where you're investing in a company that invests in real estate. But now with crowdfunded real estate, you're actually investing into a fund that gives you direct exposure to the real estate itself. You can't invest in crowdfunded real estate on the stock market. You have to go through a third-party platform which gives you exposure to these real estate investments. This would be using something like Fundrise. And on their website, it says that their historical returns for the last number of years has been something like 8 to 12% a year. Now, this 8 to 12% figure is not just the amount of passive income you're getting. This is the passive income you're getting through dividends and it's also depreciation in a property. So, the way this works is you are investing directly into a fund and this fund mimics the returns that a real estate property or a group of real estate properties is getting. So, if these real estate properties go up in value, your fund goes up in value. And if these real estate properties make money through rent, then you make some money through rent as well. This is what your dividends are. Again, with this type of crowdfunded real estate, you're not the one going out and finding real estate deals. You're not the one going out and finding tenants. You're not the one managing tenants or paying the bills. You're just investing into a fund that gets exposure to this real estate. And there's other people that are doing all the work. And as these real estate deals make money, so do you. So, this is an easy way for somebody to get exposure to real estate and get passive income from real estate without actually going out and spending hundreds of thousands of dollars or millions of dollars buying physical real estate investments. If you are interested in learning more about how crowdfunded real estate works and how you can invest in real estate, we have articles on this on our website, the minoritymindset.com, and I'll also link it for you in the description below. The fifth way you can earn passive income is by being a banker without actually being a bank. The way this works is you find people who want to borrow money. Maybe they don't want to go to a bank to borrow money or they can't qualify to borrow money from a bank. And so you can lend money to these people and in exchange for them borrowing your money, they will pay you interest every single month just like you have to pay the bank interest if you borrow money from the bank. The interesting thing about this is that if somebody can't qualify to borrow money from a bank, they're going to have to pay you higher interest to make up for this higher risk. There's a couple ways you can go about doing this. I mean, you can find somebody who wants to borrow $1,000, but then you're going to have to create all the paperwork and manage the investment, which is a lot of time and a lot of paperwork, which isn't very passive. Or you can use an online lending platform out there like Lending Club. They're not paying me to say this. I'm just giving you an example. These are the return numbers I just pulled off their website to give you an example of how this type of lending works. So, they say their average return, their average interest rate is 14%. So, this is the money the borrowers are going to pay to borrow money. Now, out of this 14%, you're not going to get all this money because some people are just not going to pay their loans. And other people are going to pay their loans off early. If you pay a loan off early, you pay less interest. So, this is less interest than you get. So, they say to apply an 8% factor of loss either from people not paying their loans or from people paying off their loans early. And then they apply another 1% fee for their commission. Now, after these fees, you are left with something like a 5% return. And so this is money you're making monthly through interest. And you're also getting a little bit of principle back every single month. And so you just lend this money out, let people use your money, and then they're going to have to pay you interest to use your money. The sixth way you can make money is by renting out some of your home. When I was in college, me and my roommate would talk a lot about business ideas. And one idea that we came up with was on weekends that we weren't in the apartment, we could sublet our apartment out to other people who wanted to stay in our city, in our campus when we weren't there. It's an easy way to make money because if you're not in your home for a weekend, you can have someone else stay there and they'll pay you rent for that weekend. Back then, it was really hard to do because there was no such thing as Airbnb or if there was Airbnb, I had never heard of it. If you're not at your home for a weekend or if you have extra space like a basement or an extra room, you can put this on Airbnb for weekends that you want other people to stay there. Or the alternative, if you're cool with other people living in your property, is if you have extra space in your home, maybe it's a basement or a guest room or an in-law suite. If you have this extra space, you can rent it out to somebody else and they will live there and then they're going to pay you rent every single month for using your property and you don't really have to invest that much extra money because you already have the space and it's sitting there vacant and now someone's going to use it and pay you passive income every single month for using your space that you're not using. Depending on where you live, that can be an extra $200 to $1,000 a month every single month in passive income. And you don't even have to invest $1,000 to do that if you have this space. The seventh way to get passive passive income is by investing in municipal bonds. Earlier on in this video, I was talking about how you can get passive income by investing in stocks to get dividends. Now, when you invest in stocks, you become one of the owners of a company. With bonds, it's a little bit different because now you're not becoming an owner of anything. You are just investing your money by giving loans and you're getting paid with interest. If you didn't already know, cities and states love spending money that they don't have. So this might be used to build schools or build roads or build police systems. And so in order to fund this, they need to borrow money. One of the ways that local governments borrow money is by issuing bonds to people like you, investors. This is what a municipal bond is. A municipal bond is when you are loaning money to a local government. This might be your city or this might be your state. And now you are loaning your money to the city or the state and the city or state is going to pay you back with interest. So every single month you're going to get paid with a little bit of interest. And at the end of the loan, this is called the maturity date, you're going to get your thousand dollars, your initial investment back. There's a couple things that make municipal bonds very interesting. One is they tend to be very safe because nobody thinks that cities and states are going to go bankrupt. And second, they can be tax-free investments. If you lend money to the government, they are federally tax-free. That means you're not going to have to pay any federal taxes. But there's also a second layer of tax called state taxes. So places like New York and California have very high state taxes. But if you invest in a New York municipal bond or a California municipal bond and you live in New York or California, then you also don't have to pay any state taxes on the income. But in order to avoid paying these state taxes, you have to live in the state where this bond is located. So if you are investing in a New York municipal bond and you don't live in New York, then you're going to have to pay state taxes on your income. But if you live in New York and you're investing in a New York municipal bond, then you're not going to have to pay any federal taxes on your income. And you also don't have to pay any state taxes on your income. The way you build wealth in the stock market is not by chasing hot stocks. It's through what I call AB, Always Be Buying. And I just wrote a brand new book called ABB, Always Be Buying, How You Can Build Wealth in Any Market, where I break down the exact strategy of how you can build wealth in the stock market and turn your extra money into income or more wealth. That way you can now use the stock market to build wealth. And because you're watching my video, I'm going to give you a digital copy of my book completely free. I have that link for you if you want to download it down in the description below. And when you sign up for the book, you're also going to get access to Market Briefs, which is my newsletter for investors completely free, where my team is breaking down what's happening in things like the economy, housing, stocks, crypto, and global markets. It's read by hundreds of thousands of investors every single morning. So, if you want to get my ebook and market briefs all for free, all you have to do is sign up. and I have that link for you down in the description below. The difference between being a real investor and being a flipper or a trader is how long you plan on owning your investment for. Like, if you stick with McDonald's, if you plan on just buying and selling their stock in 3 months to make a quick profit, you're not an investor, you're a trader. If you plan on owning this investment for longer than a year, now you're classified as an investor. So, if we draw this out, when you invest your money, you are using your money to be a producer, not just a consumer. Remember, when you're a consumer, you're just eating the product or using the product. When you're the producer, you're the one that's making money off of the product. So, you're investing in being a producer. And when you invest your money, you have a time span of having your money invested for at least one year. What I want to talk about in this video is not just your regular investments. I want to talk about the investments you should be holding for your entire life because they're a little bit different than what you might think. I'm going to be going over five different investment types in this video, so make sure you watch this video until the end. But before I get into that, I need you to do me a quick favor and smash that thumbs up button below. Because the way the YouTube algorithm works, if you do not smash that thumbs up button, then YouTube is much less likely to show you and other people are financial news and education videos. The first is real estate for residential purposes for reasons that you might not expect. Now, when I say real estate for residential purposes, I mean real estate where people live in. So, this can be homes or apartments. I'm not calling it residential real estate because when people say residential real estate, that typically means we're talking about single family homes or small multif family units up to four different units. When I say real estate for residential purposes, this can mean single family homes or this can mean big apartment complexes where people live in. The way real estate investing works is like this. Let's say you find this house right here on sale for $100,000 and you go through the property and you think it's a good property in a good area. So then you come in. So, I'm gonna draw you right here, and I'm gonna draw you with a nice mustache, of course. You come in and you buy this property for $100,000. Now, you own this home right here, but you're not going to live in this home yourself. Instead, what you do is you are going to lease this home out to this person right here and maybe their family, and they're going to live in your property. But in exchange of this person living in your property, they are going to pay you $1,000 a month in rent every single month for them living in your property. Now, you can continue working your job like normal or you can go on vacation or do whatever you got to do and you will continue making this $1,000 a month every single month because this person needs a place to live. And where are they living? They're living in your home. The reason I say you want to own real estate for residential purposes for life is because people will always need a place to stay. No matter what happens in technology and no matter what happens in the future, people will always need a home. You can compare that to the past where people used to look at shopping malls and strip plazas as the thing to own in real estate. Well, as technology came and Amazon came and the shopping dynamic of the world changed, then shopping malls didn't become as attractive. There were people who made a ton of money in the strip mall and the shopping mall business, but now that industry is kind of dying because the whole shopping industry is changing. Same with office real estate. Real estate investors back in the day used to say that companies will always need a place to work. But then came the 2020 pandemic and then people realized that they can work from home, which made office real estate not so attractive. Residential real estate is a little bit different because people will always need a roof over their heads. People will always need a bed to sleep on and people will always need a home to stay in. That makes it a lot easier for you to own real estate for the rest of your life because the only reason people won't want a home to live in is if people decide that they're more comfortable living on the streets. Now, let's talk about why or why you don't want to own real estate for the rest of your life. So, for the sake of this example, let's say over here you have a single family home and here you have an apartment complex, both of which you can buy for $1 million. And let's assume for the sake of this example that if you rented out both of these properties after paying all of your expenses, you would be left with $70,000 at the end of a year. So you buy each one of these and each one of these make you let's just say $200,000 a year in rental income and then you pay for all of your expenses, your property taxes, your insurance, your maintenance, your management fees. After paying all of your expenses, you are left with $70,000 worth of profit. And we're assuming that there's no debt. You're buying these properties with cash only. That means both of these properties are paying you a 7% annual return because here you're buying this house for a million dollar and you're making $70,000 a year in rental income profits. And here you're buying this apartment complex for a million and you're making $70,000 a year in profits. But you also have to remember that just because you made $70,000 doesn't mean you get to keep $70,000 because the IRS wants their cut. You got to pay taxes on this money. However, real estate does come with some legal tax loopholes. When you own real estate as an investment, meaning you're not the one living here. You are renting out your property to somebody else. Then you get to tell the IRS, "Hey, this property that I own is one year older, so I deserve a tax break called the depreciation deduction on my taxes." And so, you get to take a tax break on both of this income right here because you own investment real estate. But the size of your deduction is going to be different here and here because this single family home is considered residential real estate and this apartment complex is considered commercial real estate. Residential real estate, so single family homes, two families, three families and four family units, let you depreciate your property for 27 12 years. While commercial real estate, so anything over four units, lets you depreciate this property over 39 years. I'm going to explain what this means. So now what you're going to do is you are going to take the value of this building, not the land, the building itself, and divide it by the number of years that you can depreciate it on your taxes. So for the sake of these examples, let's assume that when you buy this $1 million property, $200,000 of which is going towards the land value because, you know, these properties sit on some land. And $800,000 is for the building. So you're paying $200,000 for the land that this propertyy's on and $800,000 is for the actual building. Once you know that, now you can do $800,000 divided by 27 and a half, which is one second. $800,000 divided by 27.5, $29,000. So over here, you get a $29,000 tax break every year for 27 12 years. And over here, $800,000 divided by 39, this is about $20,000. So here you get a $20,000 tax break every single year for 39 years. What this allows you to do now is you buy this property, you make $70,000 a year, but you only pay taxes on $79,000 minus $29,000. So, right around $41,000. You're only paying taxes on $41,000 worth of income for the first 27.5 years. After 27 years, you don't get this deduction anymore. Same thing here. Here, you make $70,000, but you only tell the IRS that you made $50,000, and you get to do that for 39 years. After 39 years, you don't get that deduction anymore, which is why a lot of people invest in real estate, but they have the goal of never holding it longer than 27 and a half or longer than 39 years. However, you also get some benefits if you own real estate for your entire life. So, this is the reason why you wouldn't want to own real estate for your entire life because after 27 1/2 years or after 39 years, you no longer get this tax break. And so, now you have to pay more money in taxes. And so if you don't want to pay more money in taxes, you might want to sell your property after 27 and a2 years or after 39 years. That way you can take advantage of all these real estate tax breaks. However, let's go over why you might want to own real estate for your entire life. So now, same example. You buy either one of these properties for $1 million and you own it for some time and you're making rental money every single year. But now a few years go by and you find out that your property is now worth $5 million. So, you got a lot of equity in this property because you bought it for $1 million and now it's worth $5 million and now you're thinking, "Yeah, I want to give this property or this money to my kids." Now, one thing that you can do is you can sell this property and get $5 million worth of cash, but now you have millions of dollars worth of profit because you bought this property for $1 million and you're selling it for $5 million. So, you're going to have a pretty big tax bill where you're going to have to give a big chunk of this money to the IRS in taxes. The alternative, assuming you do not sell this property for cash when you're alive and you own these properties, either one until you die. Now, when you die, your estate gives this property, either one, to your heirs, your kids. Now, what happens is your kid is going to get this property and the government is going to say that your kid got the property, they bought it for $5 million. So, if your kid went out and they sold this property today for $5 million after you die, they will get this $5 million of cash and they don't have to pay any taxes on this money because to the government it looks like they bought the property for $5 million. This concept is called stepped up basis and essentially what it's saying is if you die with this property then the person you give this property to essentially can say that they bought the property for how much it's worth when you die. So now if you get here, you don't have to worry about selling your property for a profit and then paying taxes and then giving this cash to your kid. What you can do is let this property live with you for the rest of your life and then when you die, you gift this property to your kid. And now what you have to worry about is estate taxes, but you get a much bigger kind of cushion with estate taxes because you have to be gifting millions of dollars before any estate taxes come into play. Now, I do got to let you know, although I am an attorney, I am not your attorney. So, if you have specific tax questions or legal questions, talk to a professional in your area. The last reason why I say real estate is an investment that you want to own for your entire life is because with real estate, you own something tangible that you can see, feel, and touch. And this is something that can continue to provide you income and income growth for the rest of your life. Because if there's demand for this property wherever it is, then what you're going to see happen is more people are going to want to live there, which means the rent that you charge can go up, too. So now as things become more expensive because of inflation, the amount of money you make every single year also increases because there's more demand to live in the property that you own. Second thing you want to own for life is the stock market in general. And when I say the stock market in general, I don't mean investing in stocks the way most people talk about investing in stocks. I talk a lot about investing on a YouTube channel from real estate investing to stock market investing, which is why if you haven't subscribed to our channel yet, you should do that. But when most people talk about stock market investing, they're trying to find the next hot stock. How can you find the next Tesla or the next Amazon or the next Apple before it makes it big? Now, you can make a lot of money if you find the next hot stock, but that might not be something you want to own for the rest of your life because, well, Tesla could fail. Amazon could go bankrupt, and people might stop liking iPhones. Now, I know what you're probably thinking. Oh, just Amazon can't ever fail. They're a powerhouse. How could anything be bigger than Amazon? Well, that's exactly what people used to think about Sears. Sears used to be the monster retailer. And back in the day, people used to think that there would never be a Sears competitor because they were so huge. Well, now times have changed, technology has changed, and Sears is bankrupt. Companies will change, technology will change, people will change, but one thing, if you believe in the United States and if you believe in the American economy, one thing that won't change is the economy. So if you believe in the American economy, what you want to be betting on is the American economy. Because while companies like Sears might come and fail and J Penney might come and fail and Circuit City might come and fail and Herz might come and fail and California Pizza Kitchen might come and fail, the American economy has continued to grow. The closest way for you to get actual exposure to the American economy is to invest in the broader stock market as a whole and that would be through funds like VO and SPY. These are two different ETFs, exchange traded funds, which allow you to invest in the broader stock market because both of these funds give you exposure to the top 500 companies in the United States. Investing your money is hard. And on this channel, I teach how you can start investing your money yourself. But for some of you, working with a financial adviser, somebody who is a professional, will be a better option because now it's more hands-off and you can work with a professional who will manage and invest your money for you. And that's why I partnered with my sponsor, Money Pickle. The reason why I like Money Pickle is because first they get to know you and what your needs are. And then they match you with a vetted financial advisor who would be best suited for your needs. And then they give you a free consultation call with the financial adviser. That way you can get a feel of the financial adviser and see if they're right for you or not. That way you don't have to go through a high pressure sales process with somebody who might not even be a good fit for you. If you're interested in learning more and you have over $100,000 in assets, the process is pretty simple. All you have to do is complete a short form. I have that link for you down in the description. It takes a few minutes to complete and once you do that, Money Pickle will review your answers and then pair you with a vetted financial adviser who they believe is best suited for you. It's a completely free process that initial consultation again is free. And then if you decide to move forward, then you can negotiate and discuss what your rates and terms look like with that financial adviser directly. So if you want help managing your money and you want to work with a vetted financial adviser, my sponsor, Money Pickle, can help get you paired up with a financial adviser at no additional cost. So if you want to learn more, I have that link for you down in the description. I start making money because the thing that I invested in is sending me a check either every month or every three months or every year. When it comes to the stock market, this check comes every 3 months and it's not actually a physical check. It's a direct deposit into your account. And this is called a dividend because some companies in the stock market have a ton of profit. For example, McDonald's has billions of dollars of profit in their bank account at the end of the year. Now, when they have these billions of dollars, they can do three things with these billions of dollars. They can reinvest this money back into their own company. They can work to create better hamburgers. They can number two save this money for an emergency. So they can keep this money in extra savings in case there's something bad that happens in the future. Or they can also do number three, they can just give it away to the shareholders to their investors. And a good company is going to do a little bit of all three. So there are some companies out there that have these huge profits where they just give a big chunk of it away in the form of a dividend where they literally will deposit money into your bank account for doing nothing except owning that right stock. Now again, you can go out and invest in those individual companies or you can invest in a fund that specializes in dividends. Now, I want to give you the pros and the cons here. The reason why I like dividends is because it gives me a sense of security because now after some time and after a number of years, what you'll see is those dividends can start to stack up. And my goal is to be able to just live off of my cash flow, to live off of my dividend income, to live off of my rental property income. Because now that cash flow from my investments that comes in pretty much passively can fund my life. And now I can use that money to buy my car, to pay for my housing, to pay for my vacations, and really anything that I want. And I don't have to work to earn that money. I worked to buy those investments. The reason why a lot of people don't like these dividends is because it's so slow in the beginning. You're going to invest money this year, next year, the year after that, and see little to no return. It really takes years, if not a decade, to starting to see the real impact of these dividends. If you don't have a ton of money to start with. Plus, number two, you have to think about taxes when you get dividend income because when you get that dividend income, you have to pay taxes on that dividends even if you reinvest that dividend income. So, whether you like dividends or hate dividends, that's up to you. I love dividends. I'm going to talk about a couple dividend ETFs. Two very different ETFs. By the way, I'm personally invested in both of these. So, SCHD and VMI, SCHD is a dividend paying fund created by Charles Schwab and this is investing in United States dividend paying companies. So, Charles Schwab is the fund manager here and they go out and they find high dividend paying companies in the United States. They invest in those companies that are paying out a dividend. That way, you can get a steady and strong dividend with this fund. Does that mean that the fund always goes up? No. Does that mean the dividends always go up? No. You're going to see variations just like stock prices. Stocks go up and down. Dividends can go up and down, but over the long term, the goal is to see your investment value go up and your dividends also go up. Of course, investing is risky, but that's the goal with CHD. VMI is created by Vanguard. And this one's a little bit interesting, which is why I wanted to mention it because this is investing in high dividend paying companies outside of the United States. So, non United States companies that are paying out these higher dividends. more speculative here. But the reason why I want to talk about this is because sometimes, especially if you're starting off, you want to have a little bit more risk on your portfolio. And now when you're investing in these non US companies, you can see the growth not just of the company, but also of the country. So if some of these countries start to see more growth, those companies can also see more growth and you can see faster growth in those dividends. So this is more risky, but more potential to see more growth in those dividends as well. Again, you got to know your game. You might hate the idea of investing in dividends. You might love the idea of investing in dividends. This just a way for you to start thinking about as you're building your portfolio, what are some of the things that you may want to invest in. For me, I want to own some of the S&P 500. I want to own some dividends, which also brings me to number three, a growth fund. Growth companies are different than both of these because growth companies generally don't have a lot of profits, if any. These are companies that are working to grow as big as possible, as fast as possible. So, they're taking their profits and reinvesting it back into the company, which means there's more risk for more potential return. And that means there's a chance that the companies inside of these funds can go bankrupt a whole lot faster. But if it goes well, those companies can also grow a whole lot more faster. So, growth funds are more risky for more potential keyword potential return. A couple options here are QQQ and VUG. QQQ gives the exposure to the NASDAQ. You may have heard that term before. The NASDAQ is a group of the 100 largest companies in the stock market that are not financial. That's the key. Not financial. That means most of the companies in the NASDAQ are actually tech companies. And these are a lot of companies that are innovating, trying to grow bigger, trying to go faster because they're innovating on the tech side of things. Then we have VUG. This is created by Vanguard. And this is a growth fund that's investing in those types of growth startupy type of companies. So these growth funds, these growth stocks are more risky, more speculative for more potential return. And then we have the S&P 500 and dividends which are a little bit more on the safer side. And this is why I say personal finance is personal because well, your goals are going to be different than somebody else's. Some of you might hate dividends. Some of you might love dividends. Some of you might want more risk. Some of you might want less risk. And this I'm going to give you one more bonus. This is a bonus ETF that you can consider investing in. And for those of you that believe in a particular niche, the nice thing about ETFs is there's an ETF for almost anything. So, if you believe in a particular industry, if you believe the markets are shifting towards one particular direction, that can create an investment opportunity. But if you don't know which company to invest in in that shift, well, you can just invest in a fund that gives you exposure to the broad shift. I'll give you an example. Botz Bots. This is an ETF that gives you exposure to AI and robotics. So if that's something that you believe in for the next 5, 10, 20 years, you don't have to find the perfect company. There are ETFs that give you exposure to that. Another example is AGNG aging. There is a growing demographic of older people in America who are well getting older and those older people are going to need different services, different health care, different needs. This ETF invests in those companies that service older people. So essentially, it profits off of people becoming older. If you believe that's a shift that's going to become more profitable in the future, that's something that you can consider investing in. IYG, this is an ETF that gives you exposure to financial services. So if you believe in the future of banking and financial services, well, this is an ETF that can give you exposure to that. The reason why I'm showing you this is there are ETFs for anything. So, if you want to invest in an area where you believe money is moving, well, that doesn't mean that you can't do it if you want to invest in ETFs. In fact, there's ETFs for pretty much anything that you can imagine. And this can give you the opportunity to diversify within that niche as well. But this is where you have to kind of know how you're going to allocate your money because the reality is this niche ETF is more risky and you have to know how much risk you're willing to take on. Yeah, if you're 19 years old, you can take on more risk. As you get older, you might not want as much risk. You have to know your tolerance for risk, what type of returns you want, and are you willing to withstand the ups and the downs because the way that you win as an investor who's investing in ETFs is not to invest $10,000 today and then hope that this money becomes a million dollars when you retire. That's not the way that you do it. The way that you win is by following a strategy that many people call DCA, dollar cost averaging. I like to call it ABB. Always be buying. That means you set up a cadence that's consistent, passive, and automatic. CPA, consistent, passive, and automatic. Money is pulled out of your checkings account and invested into your portfolio of ETFs, into your portfolio of funds, and you set it and forget it. Maybe it's once a week, maybe it's once every two weeks, maybe it's once every four weeks. You pick a cadence and you set it and forget it. For me, what I do is once a week. I do it on Wednesdays. There's no secret science as to why. is just in the middle of the week. Every Wednesday, money is pulled out of my checkins account and is automatically invested into my portfolio of ETFs. No matter what, it doesn't matter if the markets are going up. It doesn't matter if the markets are going down. It doesn't matter if markets are crashing. It doesn't matter if markets are booming. It doesn't matter if we have a Republican in the White House. It doesn't matter if we have a Democrat in the White House. It doesn't matter what's happening. I just keep buying. And I want you to remember this because anytime we start to see a downturn in the markets, I get the questions just please, should I be selling everything right now? Should I stop buying when in reality, the only time you might want to change your strategy is when you're going through a recession, when you're going through a downturn, maybe buy some more. Because remember, you have to be a long-term investor. You have to have at least 10 years, if not 20 or 30 or 40 years to really see the growth, but at least 10 years. And if you have 10 years plus on your investment horizon, a recession doesn't change your investing plan. You just keep investing your money. And the only change you might want to make is potentially buy more. Because when markets go down, it gives you the opportunity to buy more good investments at a discounted price. There's a big difference between working in a business and owning the business. I'm an employee at Briefs Media. That means I'm entitled to a salary, but the owner gets the profits. I am also the owner of Briefs Media. So the profits come to the owner. If you want to get access to those profits that a business has, you have to be an owner. And the difference between an owner's profits and your salary is your salary is capped. It's capped based off of whatever your salary is and maybe whatever raises that you get. There's no cap on profits. If you own a piece of a company, you could have unlimited profits because there's no limit. The simplest and most successful way to do this is just to take some of your extra money and invest your money into a company that's paying out a dividend. This means you're investing your money into a company that's making a lot of profits. And now when they have all this excess profits, they just give it away to the shareholders. People like you who own a piece of the company. So if you go out and you buy one share of say McDonald's, you become one of the owners of McDonald's. Now, you don't get to tell McDonald's what to do, although you do get voting rights, but you are entitled to your share of profits because you own one piece of the McDonald's pie of ownership because you own one share. And because you have that, when McDonald's has this big profit at the end of the year, they gave a big chunk of it away in 2024. They gave away about $5 billion. You're going to get your piece of that, one share out of the many millions of shares that they give out dividends to. Now, not every company pays out a dividend. And I'm not going to talk about which stocks pay dividends in this video. I already made a video talking about that very recently, which I'll link for you down in the description, but instead I want to talk about funds. Because if you start investing in McDonald's for the dividends and then they start creating bad burgers and then they go out of business, you would lose all your money and you would also lose your future dividends. So, higher risk, higher potential return. And for today, let's talk about investing in funds because there are baskets of stocks called funds that you can invest in specifically with the goal of generating dividend income. I'll give you a few examples. N OBL, SCHD, and VM are three different ETFs, meaning funds that specialize in investing in dividend paying companies. N OBL is a fund that invests in S&P 500 dividend paying companies. The S&P 500 is a group of the 500 largest companies in the stock market. Some of those companies pay dividends. That's what NOBL focuses on. But to take it one step further, they only invest in the companies that have paid out and increased their dividend every year for the last 25 years. So in order to be in this NOBL fund, you have to be an S&P 500 company. You have to pay out a dividend. And your dividend has to have gone up for at least the last 25 years. That's the companies that you invest in if you invest in this fund. SCHD and VM are two funds that I am personally invested in as a disclaimer. And these are two funds that invest in high dividend paying companies inside of the United States which SCHD is created by a company called Charles Schwab. VM is created by a company called Vanguard. So if you wanted to invest in companies into stocks that pay out dividends and you don't want to try to find the perfect company, one alternative is you can invest into a fund. Now, I'm not telling you what to invest in. You got to do your own research because I'm not a financial adviser. Investing has risks. You are never guaranteed to make money when you invest. In fact, you will lose money at some point. So, you need to always do your own due diligence and never blindly trust a random guy on YouTube. Now, the thing you want to remember here is when you get paid with dividends, you're going to have to pay taxes. And so, when you buy this, what you're essentially doing is every time you buy a share of any of these dividend paying funds, you're buying a machine that's paying you with cash flow. Every dollar you invest is a dollar that's going to pay you with a little bit of cash flow. And then you have the opportunity to reinvest these dividends as well because when you get paid the dividend, many brokerages will allow you to just automatically reinvest that money. That way now your money that your money made can make you more money. So you go to work to make some money. You take some of the money and you buy some cash flow producing machines. You buy some cash flow producing dividends. Then as you get that cash flow back, you can reinvest the cash flow to make you even more money. That way now you're working hard to create some more cash flow and your cash flow is also working hard to create you even more cash flow. That way you can build this bigger and bigger snowball that's working to produce more cash flow for you. This is the passive way. And when you think about taxes, you have to remember that even if you reinvest that dividend income, you still have to pay taxes on it. Although the nice thing about dividend income is your tax rates are generally lower than the tax rate you would pay from your job if you earn that same amount of money because the tax code incentivizes you when you make your money from investments and they kind of punish you when you make your money from your job because well when you're an investor you qualify for lower tax breaks and higher tax rates. But it gets even more interesting when we talk about operating your own business because now if you can build your own business which I get it is not for everybody. you have the ownership of that company and as your business starts to grow and you pay yourself a salary, well remember the profits that the company makes go to the owners. So if you own the company, you get to make the profits. But this is where also the tax code can be very interesting because you as the business owner are allowed to deduct what's called ordinary and necessary expenses. So what's ordinary and necessary for your business? Well, if you have a digital business and you have to say travel to Hawaii for two weeks for business, maybe you have to have some meetings out there, maybe you have to record some videos, maybe you have to go out and look at some real estate, but if you have to fly out to Hawaii with your business partner, who happens to be your wife or your husband. Now, that flight to Hawaii is a business expense. It's ordinary and necessary for your business because you need to go to Hawaii. And while you're there, you need a hotel. And while you're at the hotel, you also need meals. And maybe you need to have some events that you need to go to. You can start to see how these things can become business expenses because it's ordinary and necessary for your business. I'm telling you this because these were things that were never taught to me. When I was growing up, I did not travel a lot. When I talked about traveling as a kid, most of the time it was just me going to India to visit my family. Well, as I started to see some success in my business, I started traveling a whole lot more with my business partner who happens to be my wife. So there were times where we lived in California for a month because I needed to for business. I was speaking, I was doing podcasts and I was doing a lot of stuff out there. I lived in London for a little while for the same reason. I was speaking, I was doing podcasts. I had meetings. I lived in New York for a little while for the same reasons. Those trips then became business expenses with my business partner who happened to be my wife because it's an ordinary and necessary expense from business. In fact, sometimes it gets even more wild because I remember one year my accountant calls me and he says, "Just pri how do you feel about Gwagons?" I said, "Gwagons? I don't know. I don't really care. What do you mean?" He says, "Well, I think you should go out and buy a G Wagon." I said, "Why?" He said, "Well, the government has a program going on right now where they will give you a bonus depreciation, meaning a bigger write off if you go out and buy a heavy vehicle like a G Wagon for your business." And I said, "Well, why do I need a G Wagon for my business?" He said, "Well, you are an influencer, and because you're an influencer, you might need a G Wagon to maintain your image as an influencer." I said, "Is that real?" He said, "Yeah, people are doing it all day and night long." Now, I did not go out and buy a G Wagon because I'm not going to go out and spend money on something that I don't need just to save 30 or 40% in taxes, but you can start to see how the tax code can benefit you when you also operate the business as well. Is it more risky? Absolutely. Is it more work? Absolutely. But this is the game that wealthy people are playing. And now that you understand this, the question is what are you going to do? Is it easy? No. But the opportunity is there. So now I've talked about investing in cash flow producing real estate for the cash flow and tax breaks. I've talked about investing in cash flow producing businesses for the tax breaks and the cash flow. Now let's talk about something a little bit different. Growth for more upside potential in your money and your investment. Investing in an established company like McDonald's is very different than investing in a startup company that's very young. because McDonald's already has the market share and they're making these big profits that they just give away to shareholders because they don't have a better use for that money. A startup on the other hand wants to take all their money and reinvest it because they want to grow as big as possible as fast as possible. They haven't established themselves the way McDonald's has just yet. So they are gritty. They want to grow and they're willing to take on more risk. This is where you have the ability to see more growth in your stock price. You buy a stock for $100 and it goes up to $200. But it also comes with a little bit more risk because it's not as established and it hasn't built itself yet. But you can also see more upside potential. Now, a lot of people on Wall Street are going to have their own definition of growth. But for the purposes of this video, when I talk about growth, I'm talking about investing in companies that are focusing on fast growth in their stock price. And I'm going to break it up by talking about three different things. Tech companies, growth companies, and more niche companies. So, let's go over a few ETFs. Again, I'm not telling you what to invest in. I'm just showing you a few examples to help you start thinking like an investor. There is an ETF called QQQ which invests and gives you exposure to the NASDAQ. The NASDAQ is a group of the 100 largest stocks that are not financial which means most of the companies, not all but most of the companies in the NASDAQ are techreated. So if you want to get exposure to tech, many people will say that QQQ is an ETF that can give you exposure to the broad tech area. And we know that in general tech companies are generally focused on growth because they're always trying to innovate. But some of you might be thinking, well, that's not exactly growth. What if I just want to invest in growth companies? Again, there are funds that specialize in giving you exposure to growth companies. For example, VUG for example, IWF. VUG is an ETF created by Vanguard, which gives you exposure to growth stocks. And IWF is an ETF created by Eyesshares, which also gives you exposure to growth stocks. What is a growth stock? Again, these are smaller companies that are focused more on the growth that are not really working to make huge profits and pay out big dividends. They're focused on growing their share price. More risk, more potential return. Or we can get a little bit more niche and look for a specific industry that you believe is going to see a lot more growth and upside. Again, here are a few examples. VGT is an ETF created by Vanguard which specializes in giving exposure to IT companies, IT stocks. So if you believe that the IT sector is going to explode, this is something that you may want to consider or other ETFs related to it. QTUM is an ETF that gives you exposure to quantum quantum computing. Quantum computing is believed to be the next technology after AI. It is an idea of creating chips that are infinitely times more powerful than the chips we have today. There are many companies that are innovating and investing in quantum, but quantum chips and quantum computing isn't readily accessible yet. If that's something you believe in for the future, this is something you may want to consider looking at. But again, we don't know where it's going to go. Higher risk, higher potential return. And then we have AIQ, which if you couldn't guess from the name, is an ETF that gives the exposure to artificial intelligence. Again, there's been a huge runup in artificial intelligence. Some people say it's a big bubble that's about to crash. Other people say it's just getting started. And so if you have a long-term mindset, you want to be an investor, and you believe that we're going to see a lot more growth, well, you have opportunities to invest into that niche through different types of ETFs. Again, my goal is not to tell you what to invest in. I want you to start thinking like an investor and see what the opportunities are. That way, you can make the right decisions for you based off of what's right for you, your family, and your community. If you've been trying to figure out what business you should start in this economy, in this video I'm going to show you five different business ideas that you can start this weekend, even if you don't have a lot of money. Now, here's the thing. Every generation goes through a major economic shift, which creates new business opportunities. In the 1800s, it was railroads. This was the first time that people were able to move easily from one