BEFORE You Ever Invest a Dime – Make Sure You Can Answer These 4 Questions!

what’s going on guys welcome to the
video so today it’s gonna be very very important financial and investing lesson
I want to talk about you know before you ever invest a dime before you ever put a
dime into the stock market before you ever put a dollar into real estate
whatever it is you must be able to answer these four questions now in my
opinion too many people get way too excited to invest probably way before
they should be actually doing so but you have to ask yourself are you actually
ready to invest how do you know putting your money into investments is the best
decision for you currently what if you could get a better return elsewhere so
today we’re gonna touch on four questions that you have to ask yourself
before yes before you ever put a dollar into any investment so the very first
question that you should ask yourself before you invest any time into the
stock market is literally what’s my cash flow situation like you want to focus on
your own balance sheet and this is assets first liabilities 101 guys what
do you have coming in every month and what are your monthly expenses too many
people get focused on really analyzing the balance sheet of a potential company
that they might want to invest in without actually analyzing their own
balance sheet and own financial situation first so the very first thing
that you should do before ever investing is literally making sure that your
finances are in order yourself and focus on generating positive cash flow month
in and month out now if you’re spending more on a monthly basis currently then
you’re pocketing then that’s a problem and the first thing that you should do
in that situation is one of two things either you should increase your income
or you should decrease your expenses to common solutions to this are creating a
budget and getting rid of unnecessary expenses or things that you don’t need
or use now just to give you an example when I actually look through because I
keep it in a spreadsheet so that I can kind of see when I look through at my
monthly expenses I think this is like – two months ago almost when I was kind of
analyzing my cash flow situation and where I could improve it I literally
looked through and found so many different things that I didn’t use and
certainly did not need that were being charged to me on a
monthly basis now some of them I obviously needed but the majority of
those things were things that brought me no value and I didn’t even need or use
you always think like Oh Netflix that’s only ten dollars a month super super
cheap and another great example is me and my girlfriend I’m sure if you watch
Game of Thrones if you do drop a comment down below and let me know if you think
it’s the best show in history or if you think there’s a better one out there in
the past or currently I’d love to hear for you from you and your opinion on it
but be my girlfriend actually analyzing whether or not to actually by HBO so
that when Game of Thrones comes back on we can obviously watch it and HBO is
only $15 a month it’s not that expensive but at the same time you have to realize
that those $10 charges and those $15 monthly charges every month well they
add up over time and all you need to do is accumulate a couple of those and then
it’s not $10 a month anymore then you’re looking at like $100 a month now I’m not
saying you have to drop Netflix that that’s crazy I would never suggest
something like that how would you be able to watch fire festival
documentaries but this is just something I want you to be cognizant of you know
you have to X out all those things that you don’t need if this is you now the
next question you want to ask yourself before you ever invest a dime is do I
have any high interest debt if the answer is yes then you want to pay down
your high interest loans first a lot of people have high interest loans and they
shouldn’t be putting any money into the stock market or any investments for that
matter before they pay those off for example if you have a 10% or greater
loan out there then your first priority should be paying off that loan the
reason being the average that you can expect per year in the stock market is
about 8% so if you have a high interest loan out there that’s greater than about
10% well you would get more bang for your buck by paying off that loan
because chances are you’re not going to generate more interest in the stock
market then you would potentially paying off the interest that you’re going to be
charged on that actual high interest loan so the smartest thing to do would
be to pay off the high interest debt first now you might be saying 10 percent
or higher that sounds crazy Brian who’s got a loan like that but you would
actually be surprised a lot of people have credit cards that
actually charge up to fifteen percent interest or even I’ve seen some that are
20 percent it’s crazy but people have them and believe it or not a lot of
people also take out loans on cars that are this high or even higher I know
because I was one of them my credit used to be terrible probably about three
years ago and it’s been slowly improving ever since well last year when I went to
go buy my new car I actually agreed to a 14% APR on that actual car now at that
point in time my credit was only about six thirty so it was still improving
hence why I had to accept an interest rate that was that high and since then I
have refinanced and my credit has improved drastically but I know
firsthand just how many people out there have loans like this and why they should
be focused on paying off that loan first or at least refinancing it before they
put any money into the stock market or invest a dime now the next question you
should ask yourself is will I ever go into debt again and the way that you
make sure you answer that with an O is by having some sort of emergency fun now
the general recommendation is to have about six months of expenses saved up in
cash or cash equivalents and you can do this with a high interest savings
account preferably one with no fees you can also do this with a money market
account and I actually do this one of the ways I’m implementing this is with a
Roth IRA so I use a Roth IRA to double as both my retirement account and my
emergency account on top of a high interest savings account that I already
have and the reason that you can do this is because a Roth IRA is basically a
retirement account that you can invest in with post-tax income unlike a 401 K a
401 K you’re putting it in pre-tax and when you pull it all out you get taxed
on that then we’ll a Roth IRA you’re putting your post tax money into that
account this means that you don’t get taxed on that money when you actually
pull it out and it also means that you don’t have to pay a penalty if you
potentially pull it out early now I have my Roth IRA through m1 Finance I find
that it’s really beginner friendly and really easy to use and it’s also
important to keep in mind that you can only currently put six thousand dollars
into your Roth IRA per year but if you three $10 see it started with your Roth
IRA on m1 finance I’ll pop that link in the description you can go ahead and
grab that it doesn’t you don’t have to make a purchase you just get $10 for
free and then obviously it’s an affiliate link and I do as well that’s
why I’m pitching it to you finally the last question that you should ask
yourself before you ever invest a dime at all is do I really understand what
I’m investing in the last thing that you want to play around with at least I do
is your money and if you don’t educate yourself on at least the basics of
investing well then the chances are you will learn but it’ll will be through
your failures so my recommendation would be to educate yourself on the basics of
investing and form a plan before you ever do so know there are a lot of great
finance channels out there you can check a bunch of them out one of the ones that
I’d recommend is Ryan Scribner another one is Graham Steffen he’s a little bit
more like real estate but also finance there are two that I watched
consistently and give great advice on and there are also a lot of great books
out there now I’ll personally recommend three of you three of them here to you
three that I recommend first one is the sale of a lifetime and that’s by Harry s
dent jr. great book it will talk about capitalizing on markets and basically
capitalizing on recessions and you know predicting that type of stuff another
one is common sense on mutual funds by John C Bogle and finally one that we’re
all gonna recognize is the Intelligent Investor by Benjamin Graham great great
books I highly recommend that you check out all or at least one of them and at
least just skim through the pages and familiarize yourself with some investing
techniques before you get started and they’ll all be linked down in the
description if you want to go ahead and grab them after you do that however I
would also suggest that you familiarize yourself more with the company or the
fund that you’re specifically planning on looking at for an investment now if
it’s a company well then first things first is you want to analyze their
balance sheet look at their long-term investments look at their long-term debt
look at their short-term investments look at their short-term in debt
short-term debt and also analyze their cash flow situation short-term and
long-term you also want to look at the history of that stock especially if it’s
a dividend stock either way you do but especially if it’s a dividend stock and
you want to look at whether or not that dividend has gone up whether they have a
history paying that out if they’ve ever not paid
it out or ever cut it before and stuff like that and you also want to make sure
that you read up a little bit on the company and understand where their goals
are and where they’re heading the last thing you want to do is buy stock or
invest in a fund simply because somebody else is doing so everyone has different
goals financial situations risk tolerance and everybody’s buying at
different times in the market so I could get a great deal on a potential stock
you know today recommend it in a youtube video and by tomorrow when you go ahead
and potentially buy it after the video is released well it could be up you know
10 points or up you know 5 dollars or something like that and then it might
not be the best investment for you at that time now that’s a random specific
example and it’s probably a bad you know job of an example but it’s just
something to keep in mind everybody has different goals financial situations
different volatility tolerance and more importantly everybody buys at different
times so that’s it guys that’s the four questions you must answer before you
ever invest a dime if you can answer all these successfully well then chances are
you should go ahead and invest because it’s a great thing to do so especially
if you’re young and you have the power of compound compound interest on your
side however if any of these ones were basically a gut check for you well then
maybe you have some soul-searching to do and you should adjust certain things and
address them going forward before you put your money into the stock market
because you might get a better return on your investment somewhere else another
little bonus tip is if you’re running a business or an entrepreneur you also
might want to look into investing some back into your business or into yourself
because a lot of times you can get a higher investment if you just invest
back into yourself and you learn how to increase your income first now I’m not
knocking investing I love it I love it I love it I have a Roth IRA I have an
investment portfolio that I play around with and I also invest pretty seriously
with Robin Hood I love it all and it’s something I’m passionate about but I
quite often especially because I just released the dividend course a while
back it was like a month or two ago I get all these questions in my course and
messages from people that probably shouldn’t be investing at this current
time that’s not to say that they shouldn’t ever or they shouldn’t you
know maybe a year from now or something like that but they really don’t
understand what they’re getting themselves into and for that I just
wanna you know caution them a little bit so I
hope you really appreciate the value in today’s video I hope you appreciate you
know basically the outline of these cautionary tales and cautionary tips and
if you do please hit that like button I genuinely appreciate it let me know your
thoughts on any of these or all of them down in the comment section below and I
will see you in the next one

13 comments on “BEFORE You Ever Invest a Dime – Make Sure You Can Answer These 4 Questions!”

  1. Drake Miller says:

    Great tips wish I saw this when I first started investing.

  2. Let's Talk Money! with Joseph Hogue, CFA says:

    Some great questions to ask and will really set you up for success. The debt questions are important. I've seen so many people get started investing and then end up quitting and withdrawing because they get over their head in debt.

  3. Zachary Laid Finding Freedom says:

    That cash flow question and high interest debt is super important, btw I’ve only seen like one episode of game of thrones lol good luck with HBO stock brother

  4. Daniels Hustle says:

    I'm making up to $33k per month and I even show some of the methods that I use on my channel

  5. Ryan Ford FBA says:

    Great video Bryan, The best piece of advice being knowing your income vs your outgoings. Sounds simple enough yet most people don’t bother doing this simple calculation

  6. Justin Silliker says:

    Great tips bro I always see people wanting to jump in too early

  7. Mighty Wolf says:

    Agreed, GoT is best show

  8. Oscar Martinez says:

    Holy crap 14% on a car 😳 glad you refinanced asap or it would’ve been money just thrown away 😳

  9. BlueDollarBull says:

    Interesting on your emergency account total amount. What I usually recommend for friends and family is to keep 4 weeks in cash, and create a CD ladder with 1 months MINIMAL expenses on a 12 month rotation, for 12 months. That way if anything happens, you have 12 months income to get by on. this may take some time to build up and doesn't have to be top priority. before this, having 6 months is probably good. You can build the CD ladder after that.

    If you're scared about saving up for this kind of amount, remember you can 'bring the total up' by reducing your monthly expenses. if you're spending 2000 a month and can cut it to 1000 a month, then suddenly 1 months savings becomes 2.

    Great video Bryan.

  10. Jacob Lim says:

    Hey Bryan, I've been getting a lot of intellectual property complaints lately for arbitrage – have you? It seems that the rate I'm getting them at is way faster than me getting them appealed.

  11. Bar Meshel says:

    Hey Bryan,I downloaded the atomic email hunter- the updated version.Its asked me if the email hunter should get emails from cached results or from website only. Which one should I use?

  12. Captain DeadPool says:

    Again Amazing content bryan !!! Nice. thanks. Bryan I have a request to you. Could make a video on "How to send email more than 1000 people per day without any investment ? " Please. I don;t use websites like aweber, clickfunnels.

  13. BuzzNinja says:

    Great content, here. Thanks Bryan. Just started my YouTube channel, I am ecstatic!

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