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Stock Market For Beginners 2021 | How To Invest (Step by Step)

hey everyone welcome back to the channel

so in this tutorial I am going to show

you how to invest in the stock market so

what we're gonna do here we're gonna

break this down into a number of parts

here within this video so you can skip

around if you would like to but we're

gonna try to make this as in-depth as

possible a full all-inclusive tutorial

showing you how to invest into the stock

market obviously right now we're in some

turbulent times in the markets and so

people are interested in investing so

what I'm going to do here is I'm gonna

break this down into a couple of

different sections first of all we're

gonna talk about a lot of common

questions that people have of how to

actually start investing what brokerage

firms should you use how much money

should you start with what are some of

the initial techniques that you can use

to find stocks or what type of investors

should you be then later in the video

retching and talk about stock market

research we're going to talk about

qualitative versus quantitative research

we're going to talk about looking at

different income statements balance

sheets cash flow statements we're gonna

really try to go as in-depth as possible

so we try to make as many personal

finance videos as possible on this

channel so if you want to watch more

videos like this the only thing that we

ask is that you subscribe to the channel

and drop a like if you find value in

this video so without any further ado

let's get started here but I first want

to kind of run over a couple things that

we are going to discuss here first of

all we're talking about the different

types of investing alright there's

different types of investors you can do

investments that are rather short-term

versus investing that is rather

long-term then we're going to talk about

how to actually buy stocks brokerage

firms that you can use ones that I would

probably avoid some some things you want

to avoid in that area then we're talk

about passive versus active investing

what type of investor would you like to

be there's some people who have a lot of

time on their hands and they want to

really learn the ins and outs of the

markets and the financial markets

whereas some other people just want to

do it passively they want to take some

of the money from their job from their

work maybe put it into the 401k but they

want to make sure that they're doing it

correctly then we're gonna talk about

stocks versus mutual funds versus bonds

versus ETFs and index funds you probably

hear a lot of this jargon being thrown

around we're gonna kind of dissect that

to hopefully get a better understanding

of it and then we're going to talk about

how much money should you start with

should you go all-in should you put as

much money as you possibly can into the

markets now we're gonna talk about

diversification a little bit well

to touch on an idea of something known

as dollar cost averaging as well

something that some people like to do

then in the latter half of the video

what we are going to discuss is

quantitative versus qualitative

strategies for understanding stocks

looking at them from both sides there

we're also going to talk about where to

gather your information from Form 10-k

10-q s talking about websites that we

can use to find a good amount of

information and then as I said we're

going to look at some of the financial

statements as well to actually start to

understand how to value a stock how do

we value a stock and decide whether it's

a good deal or a bad deal now one of the

biggest ideas of investing is that we

try to preach here on this channel is to

try to limit as much risk as possible

while increasing the potential reward

that is the goal of investing sometimes

people get a little bit confused about

that and I want to just give a little

bit of a forewarning here before we

actually start talking about some big

things here and that is to curb your ego

now I don't want that to come off in the

wrong way but the one thing that I would

like to bring across here is to make

sure that when you are investing

especially if you were just beginning

investing make sure that you are making

investments based off of actual logic

rather than emotional investments I know

when I first started in the markets I

would start to buy stocks on a whim I

would see somebody on the news I would

see Jim Kramer talking about buy this

stock now and I've just go out and I'd

buy it right away within five minutes

not really knowing anything about the

company so what I suggest that you do is

try to find a buddy or a friend who

might also be learning about investing

or maybe they've already been investing

for a long period of time call them up

talk to them and kind of use sort of

this buddy system so that before you

make any investment you call up one of

your friends or associates and tell them

about this investment that you're

thinking about making run it over with

them see what they have to say about it

some of their concerns about it and it

really kind of creates this better

better way to invest so that you can

throw ideas and bounce ideas off of each

other and so that's just something that

I would suggest doing so let's actually

start by talking about the different

types of investments so there's

different strategies for investing maybe

you've heard of some of these known as

technical analysis and then there's

others such as fundamental analysis and

then there are other strategies as well

something

that people like to do which is sort of

passive index investing where they dump

money in through dollar cost averaging

those are really the three primary

strategies for investing and then

there's also another one that we'll

touch on briefly which is more so

behavioral finance going off of the news

going off of trying to understand

people's emotions and making investments

from that perspective now on this

channel and what I do and what the

majority of investors on Wall Street and

throughout America throughout the world

do is they use some type of fundamental

analysis and this is through long-term

investing where you are trying to find

companies that their current valuation

the current stock price is lower than

what it should be at the moment and so

there's a number of ways to do this but

first let's actually just discuss a

couple of others before that and one of

those is technical analysis and this is

actually something that you probably

will hear when you look at somebody who

maybe is a day trader or swing traders

or very quick traders people who get

into a stock and get out of the stock

and based off of technicals based off of

the actual stock charts so the truth is

most investors myself included I don't

actually sit in front of like three big

monitors and looking at stock charts all

day long and watching as every couple of

minutes those stock charts change and we

see the price go up and down and up and

down really what I'm focused on is long

term investing and as I said most people

on Wall Street focus on long term

investments as well so we're not so much

worried about the day-to-day activity

but more so over the span of months and

over the span of years where that

company is going to be now you can

certainly get into day trading you can

certainly get into penny stocks and

swing trading it can be very attractive

I know people who make quite a bit of

money in those and actually I would

suggest picking up some books simply

like this technical analysis for dummies

I actually love these for dummies books

but this video is not really about

technical analysis we're focusing on

long-term investments that can really

build wealth and I should also mention

that I'm not actually a financial

advisor I'm just a ran a person on the

internet so make sure that with all of

this information that you are learning

here in this video make sure that you go

on your own and start to really kind of

learn more for yourself because like I

said I am just a random person I have

been investing for some time but I just

wanted to make that very

clear okay so let's talk about how you

can actually buy stocks people have

wondered this for some time they say

there's so many different companies out

there and I see these advertisements for

it how do I actually buy a stock well

touch on this very briefly because I

think some people already kind of know

how to do this or to be honest you could

just go onto the App Store and type in

investing app and you can find one on

there but there's a couple that I really

like but there's also a lot that you

probably have already heard of before

like TD Ameritrade Charles Schwab

fidelity Vanguard those are the more

traditional ones and then we see a lot

of newer ones in the past few years like

the Robin Hood app m1 finance which is

one of my favorites I just like working

with them and then there's others as

well like Weibo and I've seen a number

of others popping up as well I saw

something like public popping up so

there's a lot of different apps that are

available I'll leave some links to some

of those down below if you're interested

in signing up I think it might be an

affiliate link so I might get some money

if you sign up for it but you totally

don't have to do that you can just go

and google it if you would like to to

find some different brokerage firms but

to be honest it doesn't really matter

which brokerage firm you go with a lot

of them today are pretty similar to each

other they have very similar features to

them as I said though I really do like

m1 Finance because you can do fractional

shares investing whereas for example if

you wanted to invest into Amazon stock

and looking at Amazon stock here it's

almost two thousand dollars per share so

traditionally if you wanted to buy one

share of Amazon stock you would need to

actually have almost two thousand

dollars to buy that you wouldn't be able

buy half of a piece of one Amazon share

right well now you can do that with

something like m1 finance this is this

is not a big advertisement for them it's

just something that I actually do like

about them but also there's a very low

amount of money required to actually

start investing you can start accounts

with $100 or less for most of these

different brokerage firms now let's

actually talk about stocks and what a

stock specifically is just briefly

because I I know for some people that's

been kind of a concern of what actually

is a stock how how does it function the

most basic way to put this in a couple

of sentences here is that a stock is

essentially just a piece of a company

that you own so when I bought my very

first stock my very first share of a

company 2009 it was Cedar Fair and I

paid I think it was 12 dollars for one

share of Cedar Fair stock it was it was

not a very good move but I bought one

share for $12 and what this means is

that let me pull up Cedar Fair stock

right here and just show you exactly

what this actually would mean so if you

buy one share currently the price of

Cedar Fair is $18 and 34 cents per share

so if you buy one share that means that

you own a tiny sliver of this company

you actually own a piece of this company

it's not that you're speculating on it

you actually own a piece and so what can

happen here and depending on the type of

company you can actually get invited to

shareholder meetings I know that I used

to get invited to Cedar Fair shareholder

meetings it would actually give me free

tickets to their amusement park even

though I only had a few shares it's

actually a pretty good deal but you can

actually get invited to the shareholder

meetings especially if you own a lot of

shares of a company for example if you

own one share you're not gonna really

have much say in a company but some

people who own 10 20 30 % of a company

can actually vote on certain things that

the company does they can vote on who's

going to be on the board so it's really

really interesting how this can work but

yes you own a piece of the company

unlike bonds or bonds you're going to be

essentially loaning money to companies

and then they're gonna give you that

money back with a little bit of money on

top as an interest rate well with stocks

you actually have some equity in that

company and that's the best way to view

it hopefully that kind of clears it up

if you're still a little confused you'll

probably just learn more throughout this

video as we sort of explain how these

stocks function but that is the basic

understanding of it so let's actually go

back to where we were here we talked

about how to actually buy stocks open up

a brokerage account like I said and when

Finance is one of my favorites it's

super easy once you sign up you can sign

up for an individual brokerage account

or you're probably gonna see a ton of

different options when you're signing up

where you might see you're gonna have an

IRA potentially you're gonna join

accounts custodial accounts if you're

under the age of 18 in America then it's

going to be difficult to invest in the

stock market you can still do it you're

just going to need to get your parents

help with that it's technically going to

be a called a custodial account so it's

under their name but your name is

attached to it as well and so I'm not

sure on the entire legality of whether

or not you legally if you're under 18

are allowed to control that money but it

has your name on it and I know

when I was younger and this is not

advice here but when I was under 18 I

had access to my account and I was

investing with that and and I just had

one of my parents on that account so I

could get started with that so like I

said if you're under 18 you can still

totally do this you just need a little

bit of help from some type of adult

joint accounts there's going to be Iowa

accounts to give me a number of

different ones the basic one the most

simple one is just going to be an

individual brokerage account it's

probably one you can see at the top of

the list when you were signing up for

opening up a brokerage account okay so

let's talk about passive versus active

investing here which one is going to be

the best option obviously this depends

on you as a person and how much time you

have on your hands so I'll tell you this

that for the first few years of my

investing journey I actually spent a lot

of time looking into individual

companies investing into individual

stocks because I had a lot of time to

not only read a lot of books which is

something that I suggest people ask

what's the best way to learn how to

invest two ways one reading books read a

ton of books read at least a dozen 2,000

books they're gonna learn so much but

also the other way to learn is through

experience it's through making mistakes

and then learning from those mistakes

but as I was saying there's two ways to

really go through investing here into

the stock market you can be a passive

investor or an active investor active

investors from the way that we do this

from our approach is to I would say

roughly about at least once a week at a

minimum you're looking over each one of

the stocks that you own you're looking

at the news from those companies making

sure that everything is going smoothly

if there's any red flags were able to

recognize those red flags at least on a

weekly basis so you're still putting in

some hours for that I would argue that

people might put in anywhere from five

to ten to maybe 15 hours per week of

actually reading about companies

learning about companies and making sure

that the investments that they have or

future investments that they're looking

into are in good condition now if you

don't have that time on your hands

because I know a lot of people are

struggling to find time in their day

well if you don't have time on your

hands for that you could take an active

or a passive approach to investing as

well now one approach is not necessarily

better than the others but from a

passive approach a lot of people do

something called

dollar cost averaging and they do this

into mutual funds and ETFs maybe hear

people talking about investing into

index funds through dollar cost

averaging this is a strategy that many

people use as well it's certainly been

tested especially now in we're in April

now of 2020 so it's certainly been

tested with the markets seeing pretty

volatile times but this is an approach

as well and we will talk about that

passive investing strategy what we're

really focusing on more so today is a

little bit more active investing talking

about investing into individual

companies and finding good deals within

the markets so let's talk about

short-term versus long-term investing as

well something that we need to very much

clear up what type of investors should

you be in terms of how long you're

investing and so one thing that I want

to make very clear is that the way that

we invest in the way that most people

who have succeeded very much on Wall

Street or in the stock market invest for

a long period of time what we mean by

this is that if you are buying a stock

and then hoping to sell it in a few days

based off of fundamental analysis that's

not really what we focus on what we want

to do is we want to buy a stock that can

reap rewards for a very long period of

time for decades to come

so the way that I do this is I'm very

much oriented about if I'm buying a

company now if I'm buying a stock now I

want to make sure that this company is a

very good company in five years and so

that is one thing that we do want to

take into consideration of what type of

investor you're going to be and if you

want to make money fast or if you're

looking for just to get rich quick this

might not be the video for you but if

you are still looking for maybe a little

bit more thrill as I said I would

consider looking into some things like

technical analysis or day trading

although they can have certainly a lot

of risks to it now let's talk about

stocks versus funds stocks versus mutual

funds ETFs so as we mentioned earlier in

this video a stock or a share of a

company you're going to own a piece of

one company but with ETFs exchange

traded funds or mutual funds or maybe

you hear index funds as well what these

are are going to be essentially a basket

of stocks that people can invest into so

say that you didn't want to put all of

your money into Walmart stock because

you want to diversify

you don't want

all of your money going into one company

because what if Walmart has problems

next year and their stock price goes

down to much lower than what it was

today and you can end up losing a lot of

money and so what some people like to do

is they like to invest into ETFs mutual

funds index funds they're all relatively

the same for the purposes of this video

we're just going to say that ETFs and

mutual funds they're relatively the same

in the sense that they're going to

represent an overall basket of stocks so

think about something like mu vo o is an

index fund which is run by Vanguard

okay so Vanguard is a financial

institution you can open up an account

with them I think they're a really good

company so it is essentially just a

brokerage firm that you can use here but

something like movie oo which is an S&P

500 index it tries to track the S&P 500

so maybe you've actually heard about

people talking about the stock market is

down 600 points today or the Dow crashed

7% today well these are actually indexes

that essentially kind of show us how the

markets are doing overall so for example

the Dow Jones Industrial Average

represents 30 companies in the United

States then we have something like the

S&P 500 which represents 500 companies

in the United States this is probably

arguably the best indicator for how well

the US markets are doing the stock

market in the United States and overall

kind of the economy as well and then

there's another index that we see quite

often in America which is known as the

Nasdaq which is much more focused on

tech stocks but then throughout the

world as well

most countries or most regions in the

world are going to have some type of

index that you can see how well that's

doing so in Shanghai there's an index in

Tokyo there's an index in your up

there's some index funds and so each one

of these is going to be an overall

basket of stocks sometimes maybe 30 or

40 stocks and other times it can be a

thousand stocks I know that I have some

investments in two mutual funds or ETFs

that have over a thousand stocks in that

one so let's say that one share of an

ETF

is $100 well inside of that $100 let's

say that that ETF owns 100 companies

that means that I theoretically could

have invested $1 into each one of those

100 companies when I bought one share of

that ETF

hopefully that's making sense to you so

it just sort of diversifies your

investments and the pros to this is that

well let's say that you investment into

an ETF like vu vo o which is that SP 500

index fund it represents 500 companies

so if you invested money into this well

you're pretty well diversified and so

what this means is that let's say one

out of these 500 companies goes bankrupt

let's say they pull an Enron or Alima

brothers or a Bear Sterns and they go

bankrupt they have no money left and

they go under and their stock price goes

to zero well if you buy an index fund if

you have money into an index fund well

if that one company had 500 went

bankrupt the other 499 should hopefully

kind of carry the weight for that and

you wouldn't really feel that much of an

effect from that but on the flip side if

you say one of those 500 companies turns

into the next Amazon the next Apple the

next Netflix and it absolutely booms and

the stock price goes from $1 to $1,000

well you're not gonna see much of an

effect from that as well because the

other 499 stocks might be sort of

weighing it down so you can see kind of

how that has both positives and

negatives to it with index funds and

ETFs and mutual funds so hopefully we

can clear that up for you what we

actually talk about in the rest of this

video is actually focusing more so on

individual stocks because I know a lot

of people want to invest into just a

couple of companies maybe they want to

invest into 10 20 30 companies and they

want to choose them themselves rather

than just kind of blindly putting money

into index funds or ETFs and mutual

funds okay so let's actually talk about

stock research here first of all let's

discuss quantitative versus qualitative

research now I suggest to take out a pen

take out a piece of paper I hope you

already did this but there's two really

strategies for looking at companies one

of them is qualitative research so this

is something along the lines of looking

at a company's culture looking at the

the model of the company looking at

their vision and even the leadership of

a company for example this is very

important because if you are just

looking at the financials and the

fundamentals and you're looking at the

numbers but you're not looking at who's

the CEO is the CEO Pappajohn because

that might be a problem so

you want to make sure that you are

looking at a number of things throughout

the culture of a company making sure

that there's no issues within that some

potential problems I'll give you an

example here looking at Facebook like

Facebook a lot of people are a little

bit wary about Facebook because of some

of the things that they've done in the

past

we saw the cam bridge analytical scandal

so qualitative research is very

important but I would argue that most

people probably spend about 20% of their

effort on qualitative research and then

80% of their effort on quantitative

which i think is a reasonable amount to

go for so most of the time that I spend

when I look at investments is actually

focused on the financial numbers rather

than that qualitative things like

looking at Facebook and Mark Zuckerberg

and looking at they're prone to maybe

more scandals in the future those are

all things that you do want to take into

consideration but quantitative the

quantitative approach is much more

focused on looking at the actual hard

facts and the numbers from this now what

do you actually get information from

when you invest into a stock there's a

couple ways you can do this one of them

is through just the brokerage firm that

you have so if you're using Vanguard or

using fidelity a lot of these companies

a lot of these brokerage firms that you

can sign up for actually have their own

research platforms within that so if you

want to buy some stocks or look at their

earning reports then you can do most of

that through one of your brokerage firms

that you have through your account it

should be pretty straight forward from

that but what I think is one of the best

ways in terms of gathering information

to learn about a company let's say that

you're really interested in investing

into Walmart stock you think about

investing into it you're not quite sure

so you want to learn more about it you

want to learn okay well how does this

company's financial statements look and

so one thing that you can do is to go to

that company's Investor Relations report

so a lot of this is going to be on their

Investor Relations page the best way to

find this is just through a simple

Google search or most companies if you

go to their website and you scroll all

the way down let's see if Walmart has

one on their home page if you scroll all

the way down to the bottom you'll be

able to actually just find their

Investor Relations page so let me scroll

down to the bottom of Walmart and see if

they have it on here and it looks like

they don't have it on here but you can

certainly

find it if you start to click around but

as I said I would suggest doing a quick

google search and then you can find it

see so we just click on investors here

and this will take us to their investor

relations page which at this point

you're gonna see a couple of things on

most companies websites especially if

they are on the major stock exchanges

around the world they're going to be

regulated and sent in the terms of what

types of information they have to

actually release to the public so it's

really cool about this is that if you're

investing in two stocks that are on the

major stock exchanges then you're going

to actually have a lot of information

available to you so one thing that we

see is something called a Form 10-k this

is going to be their annual report

looking at the past year talking about

the numbers from the past year and then

talking about their projections for the

future so for example what they believe

is going to happen throughout 2020 they

laid that out usually we're gonna see

this happen right around the turn of the

calendar year although it might depend

for some companies so what I would

suggest doing is downloading what we

call the Form 10-k this is probably

going to be roughly about a hundred

pages most companies it might be over a

hundred pages for that company's 10k

within here I want you to be a little

bit careful because just a little bit of

a warning that this is written by the

company so they're obviously going to

try to spin it in a very good light they

want people to invest into their company

this is their annual report that goes

out to their investors and so they're

gonna try to spin it in a very good

light so just make sure that you're

doing your due diligence there and doing

thorough research for all of that now

there's also going to be things called

210 Q's which is going to be essentially

just sort of an update every quarter of

what they're thinking about for the next

quarter based off of looking back on

their 10k so if we're in quarter three

they might reference that say our

projections were a little bit low I

think we're gonna outshoot that for the

next quarter or the past quarter we did

better so the ten Q's in the 10k is some

of the best places to get information

about a company you're gonna learn a lot

just from those trust me if you read a

hundred pages of a Form 10-k from

something like Walmart you're gonna

learn a lot about that company alright

now I'm gonna give you a little bit of

homework things that I want you to

really research more after this video

because for the sake of this we can't

crazy in-depth on every single topic

here because this is something that does

take many years to really master these

topics but what I want you to do is

start to learn about different ratios

and financial metrics that we can use to

essentially value a company or see if

this company is volatile if it is a

company that is likely undervalued or

overvalued there's going to be some

different indicators and ratios that we

can use one of them known as the price

to earnings ratio this is the p/e ratio

there's something called earnings per

share we can look at return on equity

return on assets and then there's also

other ones as well if we go to something

like Yahoo Finance here you're gonna see

a lot of things that maybe if you've

never done this before it might look

like hieroglyphics you're not quite sure

about it so we'll just kind of run

through some of these here so market cap

is the total overall valuation of a

company so if the market cap of a

company is a trillion dollars which is

only a couple of companies who have hit

that mark that is going to be well first

of all quite large but that is the

overall valuation of the company so we

take the number of shares multiplied by

the stock price and that is going to

give us the market cap for a company

look at some other ones here something

like beta this is going to essentially

sort of indicate whether this company is

a volatile stock or if it's not very

volatile so the beta of 1 is going to be

average and then if you see a beta below

1 that's going to mean that it's less

volatile than most other stocks so

looking at Walmart here the beta here on

Yahoo Finance as of today it says that

is 0.4 3

this means that Walmart stock is less

volatile and volatile means that it's

less likely to have massive jumps up or

massive jumps down so if the market for

example comes crashing down

Walmart stock is probably less likely to

come crashing down as hard but also if

the market starts to really boom Walmart

stock might be less likely to really see

some massive growth as well so it's more

stable versus if the beta here for

Walmart or for a company was 2 3 4 if it

was a lot higher then that could

indicate that this stock is probably

jumping around a lot more a higher beta

is not necessarily a bad thing it just

means that there's going to be more

volatility in it and then there's other

things as well looking at the earnings

date that is

generally we're gonna see companies

release earnings reports every quarter

so four times per year they're going to

get on conference calls and probably the

CEO and a number of other people are

going to discuss the earnings from the

past quarter from quarter one from

quarter two from quarter three and

they're going to talk about this what's

great about this is that you can

actually listen in to a lot of these

earnings reports and a lot of these

earnings calls to see how a company is

doing and if they over report earnings

or if they under report earnings that's

going to have a big effect on stocks so

this is something that you do want to

very much be aware of that if you're

looking at a stock there's going to be

you're probably gonna see sometimes

within the markets where the stock jumps

a lot or if it comes down a lot maybe a

couple times per year or about three or

four times per year a lot of that is

based off of the earnings because when

companies get on these calls sometimes

they say our earnings are much better

than what we thought we were going to do

we pulled in a lot more money last

quarter suddenly the stock in a lot of

cases goes up because people get more

excited and more bullish on a company

let's quickly talk about bullish versus

bearish just to clear those up here

bullish if you're bullish on the stock

market or if we are in a bull run it

means that is going up you believe that

is going up versus bearish on a market

or in a bear market and that is going to

be when the markets are going down

they're in a slump right so that is

something just some terminology there

that we can kind of clear up but looking

at some other ones here as well the

52-week range a lot of that is kind of

self-explanatory

looking at the stock price that's self

explanatory volume is just how much that

stock is being traded so if we see a big

uptick in volume that could also spur

some more volatility as well but that is

something that we want to look at and

then another one is is dividend okay so

thinking about a dividend of a stock the

best way to explain this in very simple

terms is that some companies in with

with the money that they're making they

choose to give some of that money back

to the shareholders rather than reinvest

it into their own business back into the

company they'll choose sometimes to

actually pay out dividends to their

shareholders so for example here with

Walmart you're going to see a dividend

of $2 in 16 cents so what this means

here is that Walmart's dividend of $2

and 16

sense they might be splitting this up

over four different quarters so you

might expect to get 1/4 or 25% of $2 and

16 cents every three months from Walmart

and you can actually just get this in

cash as a cent as a check

although most likely most companies are

just going to deposit it into your

account and it's essentially it's sort

of like a thank-you from a company for

investing into that company now that's

that's probably a terrible way to put it

but it is just a piece a small amount of

money that they are giving back to their

shareholders for owning that stock so

instead of reinvesting it they're just

giving back to their shareholders some

stocks you're gonna see how pivot ends

that are very high for example you might

see a stock that has a dividend of 10%

annually actually a lot of real estate

ones that I see have dividends of 10%

and so if a stock is $100 and the

dividend is roughly about 10% you might

expect to get $10 extra in cash by the

end of the year split up throughout four

quarters sometimes they pay monthly

dividends by the end of the year that

that company is going to be paying you I

just want to give you a little bit of

forewarning on this be very careful with

dividends I sort of just sort of view

them as a cherry on top I don't really

invest for dividends for the purpose of

dividends the one thing that I want you

to be careful with is one mistake that I

made when I first started investing

where I would look at stocks I was

looking at companies and I would say

this one company has a 15 percent

dividend or 20 percent dividend and I

would invest into it based off of that

not realizing that some of these

companies dividends were not sustainable

amounts of money that that they were

paying out and so I would end up losing

money because I was investing into

stocks that had 20% dividend but they

couldn't sustain that dividend they

couldn't pay out 20 percent per year

because they weren't making that much

money and so they ended up going

bankrupt some of those companies and it

was a terrible fiasco so just be very

careful with that view it as a cherry on

top not really a primary reason for

investing a lot of companies that are

what we're gonna say are well

established blue chip stocks companies

that have been around for a long time

like to pay dividends so a lot of these

older companies like like Ford General

Motors Walmart here a lot of these less

volatile kind of well-established

companies a lot of the ones and

the Dow Jones for example pay out

dividends as well those are some of the

things that we wanted to run over here

we're actually on Yahoo Finance and we

might as well just stay on Yahoo Finance

to show you some of these other things

that we can look at here so if we

actually click on financials and this is

where we can find a couple of different

financial statements from a company so

there's three big primary financial

statements that we're gonna look at here

today in this video and that is going to

be the balance sheet then we're gonna

look at the income statement and the

statement of cash flows what I would

suggest doing is if you really want to

learn about this I would really suggest

taking an entry level accounting class

or reading a couple of books about

accounting to really understand this

process if you've taken an accounting

class in college or even in high school

I don't know if high schools all for

them mine certainly didn't but if you've

taken an accounting class you're gonna

find this to be much easier to

understand for others it might be a

little bit more difficult but this is

still going to be very very helpful so

just looking at this here this is the

income statement for Walmart we can see

a lot of things on here that are very

relevant like the revenue we could look

at the past few years for revenue see

whether it's been increasing or

decreasing this is one that's obviously

very important to take into

consideration then we can also look at

some very other important things as well

like net income how is the income of a

company is it increasing or decreasing

what's the overall trend sometimes

you're gonna see companies that are

reporting lower and lower income but

they're still doing better as a company

sometimes we see companies like Amazon

for example at some times where their

income their net income is lower but

it's because they're putting money

they're funneling money back into

certain areas so really what I focus on

most is the revenue of a company but you

want to look at their costs and where

their costs are coming from so if you

see a massive uptick in the cost of a

company's employees and and and they're

paying their employees a lot more and

suddenly they have a big extra cost for

different legal disputes that they're

dealing with these are all things that

you are going to want to really delve

into to make sure that you're

understanding the financial statements

from these companies so yes this is the

income statement here that we can click

over to the balance sheet this is going

to be very simply it's going to be

assets vs. liabilities

so we can see the number of assets that

these companies have on their book here

once again I would suggest just learning

a little bit of about about accounting

to really kind of learn more about this

we do have some other videos on this so

if you want to kind of delve into a

little bit more you certainly can but we

look at their total assets we look at

the property that they own the stores

that they have and then we look at their

liabilities what type of debt do they

have who do they owe money to how much

money do they owe this is all where

you're gonna find this in this balance

sheet here obviously the total assets is

going to balance with the total

liabilities and the total stockholder or

shareholder equity so that's going to be

the balance sheet and then quickly let's

hop over to the cash flow statement

which is where you're going to see a

number of things in terms of the actual

money coming into a company so I suggest

taking a deep look at each one of these

I think there's going to be some great

videos that we'll put out in the coming

weeks on actually really trying to dig

deeper into these but once again some of

the best ways to do this is through

reading books now I have a number of

books here

I think these financial books about four

for dummies are some of my favorites

this one about investing it's an all in

one book there's some great ones about

the stock market I don't know why people

laugh about these for dummies books I

think they're actually really great to

learn so much about investing so I will

suggest picking up some of these I

really do think that they're just so

helpful but this one here the

intelligent investor is probably

arguably the greatest investing book of

all time a lot of people really praise

this book a lot I've read it a number of

times and I've gotten so much value out

of it that I would suggest reading this

especially if you're interested in

building wealth over a long period of

time now there's a couple things that we

do need to mention here one of them

being that it's okay if you lose some

money at first but it's important to

start with a sort of small amount of

money now this is something that I like

to advise people on once again I'm not a

financial advisor but I would suggest

starting with a small amount of money in

the stock market and then building it up

over a long period of time because as I

said some of the best place to learn is

through reading books but the other best

way to learn is through your mistakes

people make mistakes and it's very rare

to see somebody jump into the stock

market

start to absolutely crush it and not

make any mistakes people slip up at some

point they have a lack in judgment they

don't see this one thing within a

company that they should have realized

and suddenly they end up losing a lot of

money so the biggest tip that I can have

for you is start with a small amount of

money something that you can't afford to

lose so if you are living paycheck to

paycheck and you have no money

whatsoever then maybe just start with

fifty dollars or a hundred dollars in

the stock market and then over time over

the months over the years you can start

to put more money in it we get your feet

wet and then start to jump in and bigger

and bigger later on down the road once

you start to really learn as much as

possible so yes what I would suggest

doing start today if you'd like to start

today start investing into some stocks

today but start with a very small amount

of money I'll leave some links to those

brokerage firms down below and I think

what I'm gonna do is I'm actually gonna

create a group I don't know if it's give

me a Facebook group or maybe a discord

I'm gonna leave a link for that down

below maybe we'll do a discord for

people who aren't interested in

investing into the stock market so that

we can all talk about stocks together in

some type of group chat I never really

did this before and but I think it would

really help a lot of people out and once

again make sure you subscribe to the

channel if you found any value in this I

would HIGHLY appreciate if you follow me

on Instagram feel free to send some

questions over there I try my best to

respond to those questions but I can get

kind of difficult if I get a number of

people asking big kind of in-depth

questions they can get pretty difficult

so I hope you can understand that but

thank you for watching I hope you really

found some value in this video I love

creating these videos it really just

makes me happy when I see people

starting to invest into the market so

thank you for watching

investor your own risk remember that you

and only you are responsible for the

investment decisions that you make thank

you everybody have a wonderful day and

I'll see you in next week's video