ILAB 139: How to Buy Stocks and Index Funds 101

“If you dollar cost average, instead of lump sum investing, it is effectively buying you insurance against a downturn.”

Sam Marks

People across the world are shaken by the rapid spread of the coronavirus. Stocks are plunging and the economy crash feels inevitable. And as bad as news seems to every person this situation might have some new opportunities for everyone to finally start investing.

In this episode, Sam and Johnny, who are long term investors, discuss the current situation with the market. They explain why this might be the best time to look into investing. They explain the basics of investing for beginners, give advice on what stocks to look into, how to avoid typical mistakes and what books to read about the topic. Learn why investing in index funds the safest way and how to balance your stock portfolio.

Listen to ILAB 139 on iTunes here or subscribe on your favorite podcast app.

ILAB 139 Show Notes


Where we are:

Sponsor:

Discussed:

Recommended:

  • Fundrise – Start with only $1,000 into their REIT funds (non-accredited investors OK)
  • Betterment – Get up to 1 year managed free
  • PeerStreet – Get a 1% yield bump on your first loan
  • Wealthfront – get your first $15,000 managed free
  • Vanguard – Open an Online Account

 

Time Stamps:

  • 05:37 – Investing in individual stocks vs investing in index funds
  • 10:15 – “You are not investing in stocks to make 10x, you are investing in stocks to make 8% over the next 20-30 years.”  – Sam Marks
  • 10:23 – Understanding investment fees
  • 15:05 – Creating an emergency saving fund before investing
  • 21:45 – Books to read before investing
  • 25:00 – How much money should you invest
  • 27:00 – “If you put the money all at once and the market is going down, you are losing in total value, but if you are putting money each month, you are actually buying when it’s going down and it’s gonna benefit you in the long-run.” – Sam Marks
  • 30:22 – Index funds to choose for first-time investing
  • 35:00 – Advice for investors outside of the USA
  • 40:00 – Situation with stocks right now
  • 43:43 – “And the reason why we know the economy is going to recover, it’s because it always has.” – Johnny FD
  • 47:58 – Stocks vs bonds
  • 50:00 – Taxable and Non-Taxable accounts in the USA
  • 55:46 – Websites where you can invest

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