[Music] well hey you guys so today I want to talk about how to invest with just $100 so I get questions all the time from you guys wondering how or even why you should start investing when you don't feel like you have enough money to throw at investing in the first place so if that sounds familiar I've got really good news for you you don't have to have a ton of money to start investing in fact one of our core Ramsay teachings since the beginning has been the importance of investing early even if you can only contribute a small amount at first so today let's talk about how you can start making Financial progress by just investing $800 yep you heard that right and be sure to stick around to hear my number one don't when it comes to investing and wealth building so now before I explain what it looks like to invest $100 I want to catch everyone up to speed on some investing basics now first it's important to know why investing matters in the first place investing is one of the best places for you to grow your money you know this idea of gosh I would love my money to make money while I sleep and I don't do anything well that's what investing does it's a really powerful thing when you put your money in you're going to get a return now depending on that return is depending on what the market is doing so it's going to look different year by year and sometimes there's some dips even while I'm filming this there was a massive dip yesterday and everyone's freaking out about it so it is a ride buckle up get ready but it's a great place to put your money for your money to make money and compound interest is your friend it's a beautiful thing next make sure that you understand when is the right time to invest so really focusing your money and putting all of your motivation and all of your intensity towards one thing is really really important when it comes to personal finance so if you are in debt get all of your focus of getting out of debt everything but your house if you don't have money saved after that that means need to save some money 3 to 6 months of expenses for an emergency fund is a great fully funded emergency fund and then you can start thinking about investing so when you're thinking about investing you want to start off with retirement specifically because you're going to be investing for the future and when you want to stop working you have money to live off of and you're not depending on the governments but you're depending on you right now saying hey I'm going to put money away for the future so you want to put 15% of your income into retirement at that point and third let's clarify how how much money you should be investing so again just like I said that 15% rule is really really key and when you think about investing into retirement and that 15% remember this Okay match beats Roth beats traditional so great places to put that 15% is a 401k at work go up to your match or a 403b and then a Roth IRA is another great thing to open you can invest up to $7,000 in it in this calendar year that we're in now and so put some money in there but but invest up to 15% of your income okay now let's get to the main point of the episode how to invest $100 now you might be thinking okay Rachel well if I'm ultimately supposed to invest 15% of my salary can $100 really make a difference absolutely because Building Wealth is all about taking small steps so again you may be investing just a little bit at a time Winston and I when we were babies and when we got married in our early 20s and we started contributing you know it was not a lot our 15% of our income was not a ton of money but we still continue to do it so even if you feel like gosh it's such a small game that I'm playing it is important to start early and also to develop the habit of putting money away and speaking of building let's just take a moment and honor the MVP of investing and that is compound interest so what compound interest is really simplified is let's say you put your money in the market and let's just use 10% growth as an example so your money is going to make 10% so that $100 you put in yeah 10% of that is $10 so again you're going to be having $110 going in next year well if you don't touch it you don't put any money in you don't put any money out you're going to make 10% if the market does that on $110 not just $100 so what's happening is you are making money on not just the initial investment of that $100 but you're going to make money on the growth of it as well so it just continues to get bigger and bigger and bigger and what's crazy let's just pretend that you're 22 years old and you put that $100 in and let's say the average rate of return was 10% all the way till you're 65 that little $100 will grow to $ 7,240 which is pretty amazing I mean if you think about it you just put $100 in and you just went on about your life that's that's what it grows to now obviously $7,000 isn't enough money to sustain your life and to live on during you know your retirement years of 15 20 30 years but the powerful thing is that you can see what math does because the point of this is that time is so so key okay next let's talk through one of Dave's OG examples when it comes to investing this is one that is tried and true and it works but before I do that I want to tell you about a faith-based alternative to health insurance that makes Healthcare more affordable and that is Christian healthc Care Ministries so when you go against society and what Society thinks is quote unquote normal like avoiding debt as an example it might seem really weird at first but listen that is okay we want you to be weird if that means that you're doing things intentionally including how you spend your Healthcare dollars and one way to be intentional is with Christian Healthcare Ministries chm isn't health insurance they're a health cost sharing ministry that's helped hundreds of thousands of families like yours take care of health care costs without sacrificing their freedom find out more and join chministries.org budget that's chministries.org budget all right let's go to this investing example we're going to take Jack and Blake Jack started investing $200 a month when he turned 21 years old but at 30 he decided to stop investing altogether so he just left that fund alone so for 9 years Jack invested $2,400 a year which is about $21,600 total now his friend Blake on the other hand started investing $200 a month at age 30 so when Jack stopped investing that is when Blake started investing and he started investing the same amount of $2,400 every single year until he was 68 Now Blake invested $91,000 of his own money during that 38 years and remember in just n years Jack invested $21,600 so if you had to guess who do you think ended up with more money at retirement Jack that's right so by Investing $2,400 For n years Jack ended up with $2.3 million while Blake invested the same amount of money per year for 40 years and he ended up with only 1.3 million is that not crazy I mean compound interest is wild that's what compound interest did that growth turned Jack's $21,600 to over 2 million because he started early so again time is on your side time is money people time is money so even if you can invest $100 or $200 a month and you start as early as possible it's going to pay off now before I share my number one investing don't let's talk about where you need to put this $100 so if you don't have a 401k option through your work or you're already contributing and you're interested in diversifying your Investment Portfolio then again consider a Roth IRA Roth IRA is a great place to put your money and it grows taxfree which is what we love but you can only invest up to $7,000 and it does have an income limit so if you make too much money you won't qualify for the Roth IRA but you can do what's called a backdoor Roth IRA and you can still invest okay let's say you've been investing for a while how do you know when it's time to bump up your contributions well I recommend adjusting the amounts that you invest as your income grows so maybe you get a raise maybe you gain a spell income uh maybe you know you have a new career and you get paid a whole lot more but when your income increases you need to be bumping up your Investments so that 15% of your income needs to go along with your growing income and if you're investing only 100 or 200 there you know again I think the goal is to get to that 15% when the day is done and that's going to set you up for a great retirement all right so now it's time for my number one no no when it comes to investing in wealth building and that is crypto I was on a trip recently and there was this dude at the pool crypto dude and he's talking he's like have you not done crypto not to me but to his friend and he's going on and on and on about it and I was like oh my gosh because the truth is if you have disposable income and you want to throw it at crypto do it that's great but if you don't and you're working your way out of dead or to get an emergency fund or to fund that 15% to retirement stick to the plan because cryptocurrency it is a total gamble right now I mean it really is I mean it's it's up and down there's tons of scams within it it does not have a long track proven record so making sure that you put your money in proven methods that have worked for decades and that's what I want right I mean this is your money your hard-earned money you don't want to put it into something cuz I'm bro at the pool said to and then you lose it so making sure you are really really wise with this and that's one reason I really recommend working with an investment professional so I'll leave a link so you can connect with a smart investor Pro in your area to get started now for a closeup of my own personal investment strategy check out my episode on my annual investing routine that's coming up next all right you guys remember to take control of your money and create a life you love
