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How To Become A Millionaire: Index Fund Investing For Beginners

Graham Stephan
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Index Fund Investing for beginners: This is one of the best investments that requires very little work, almost no skill, and has some of the best overall returns. Here’s why - enjoy! Add me on Instagram: GPStephan
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What IS an index fund?
An index fund is basically just a group of investments that you can invest your money into, and then you’ll own a small percentage of the entire thing. Index funds track the entire market as a whole, rather than one specific stock.
Why Invest in an Index Fund: They have very low fees.
This is because indexes are very simple to put together, very simple to manage, there isn’t much overhead, and those savings get passed on to you. This is also what’s known as a PASSIVELY managed fund. You’re getting an entire portfolio of stocks that automatically gets balanced and adjusted over time, without doing any work, and you pay as low as 0.04% annually.
This is the opposite of a MUTUAL FUND, which employs professional stock pickers who aim to generate market-beating performance. However, the additional overhead expense associated with this, as well as the fees incurred by buying and selling, ultimately gets passed on to you, as the investor, in the form of higher fees. And that is WITHOUT the guarantee of actually beating the market.
Second Advantange: The majority of investors will get a HIGHER return long term with an index fund than they will by investing in individual stocks on their own.
Several studies have suggested that over 92%-95% of portfolio managers could not out perform the market index over a 15-year period. And these figures are SO MUCH WORSE for the average individual investors.
Third Advantage: Diversification.
Even if you have 20 individual stocks in your portfolio, one of them dropping in price could cost you a lot of money. On the other hand, if you buy the SP500 500 index fund, your investment will depend on 500 different stocks, only three of which account for more than 2% of the entire index. This means having a few companies go down or up won’t make a huge difference in your portfolio, but you get the advantage of riding the entire market as a whole as they rise in value over time.
Fourth Advantage: It’s easy.
I also acknowledge that I am not a stock market expert. I cannot buy and sell stocks that will consistently beat the market long term, nor do I have an interest in spending that much time watching stock charts and reading news so I can make the proper decisions.
Source: mymoneywizard.com/3-fund-portfolio/
How to do this:
My favorite index fund investing method is called THE THREE FUND PORTFOLIO:
* US Stocks: Vanguard Total Stock Market Index Fund (VTSAX)
* International Stocks: Vanguard Total International Index Fund (VTIAX)
* Bonds: Vanguard Total Bond Market Index Fund (VBTLX)
That’s it. This gives you the broadest diversification at the absolute cheapest cost. Not only that, but because you’re investing in multiple asset classes, you’re diversified through three mostly uncorrelated markets, and that protects you against any swings from one individual market.
Sources:
TIME IN THE MARKET beats TIMING the market: Charles Schwab.
www.schwab.com/resource-center/insights/content/does-market-timing-work
Warren Buffet Millionaire Bet:
fortune.com/2017/12/30/warren-buffett-million-dollar-bet/
Beating the market:
www.aei.org/publication/more-evidence-that-its-very-hard-to-beat-the-market-over-time-95-of-financial-professionals-cant-do-it/
www.marketwatch.com/story/individual-investors-are-destroying-their-wealth-2012-10-19
For business or one-on-one real estate investing/real estate agent consulting inquiries, you can reach me at GrahamStephanBusiness@gmail.com
My ENTIRE Camera and Recording Equipment:
www.amazon.com/shop/grahamstephan?listId=2TNWZ7RP1P1EB

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8 Mar 2019

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Comentários 80
Lean 2200
Lean 2200 Hora atrás
I wish i started this when i was 20, tbh i was too scared
Bryan Herincx
Bryan Herincx 19 horas atrás
I’m so confused with getting started, should we invest in these through a retirement account or regular taxable account ? However , I honestly don’t want to wait till I’m 59 1/2
Favio F
Favio F Dia atrás
WHy are the stock that he mentioned, vitax, vbtlx, etc all say "not suppoertef for trading" ANYONE have an answer to this? Graham Stephan? ANY help is appreciated.
Favio F
Favio F 15 horas atrás
@Bryan Herincx wouldn't vanguard s&p 500 fall into the same category? Because the s&p 500 is tradable. I was thinking you would have to open a vanguard brokerage directly with them in order to invest in vtiax, tbltx, etc. But Im still not sure.
Bryan Herincx
Bryan Herincx 16 horas atrás
To my knowledge , those 3 are really mutual funds/index funds (i'm still confused on that a bit, learning) and not ETF's. ETF's you can trade, so the equivalent of those would be BND , VXUS, VTI
Elvin Shoolbraid
Elvin Shoolbraid Dia atrás
I'm very glad to be watching this at 14
bakamon523
bakamon523 Dia atrás
Question... how can i start this "three fund portfoilo" if all 3 index investment fee start at $3K in a roth IRA and cap $6K per year?... or should i use this just a investment portfoilo and make a separate index portfiolo for a ROTH IRA... or am i still just confuesed and making alll this up.. PLEASE HELP
Bryan Herincx
Bryan Herincx 16 horas atrás
I feel you bro I'm confused with this as well. Guess you would have to do it through a regular taxable account. or buy the ETF's version of these in the ROTH IRA
backspace4353
backspace4353 2 dias atrás
So glad i found this, I am just a sperm cell making my way to the egg. Hoping i have rich parents that set me up with a trust found.
Vicente Capito
Vicente Capito 3 dias atrás
Smash the like button, 1 min skipping ypur videos
Talmagegibster
Talmagegibster 3 dias atrás
Buffett also has said that “Diversification is protection against ignorance.” I’m fine with being ignorant though, since I’m just an average Joe.
Robert Stanners
Robert Stanners 4 dias atrás
Would you want to buy the same funds even if you live in the uk?
Pagon Phanthakitrak
Pagon Phanthakitrak 5 dias atrás
Love this video! Going to buy myself some index funds and VNQ stocks. Loving your videos graham!
Sweg Swigidy
Sweg Swigidy 5 dias atrás
So glad i found this. My father still hasn't been born. Will definitely invest after my father is born then after I am born
Michael Scarn0909
Michael Scarn0909 6 dias atrás
What if I want to open an index fund and invest in a specific market instead of the entire stock market? Is that possible? I definitely want to open an index fund in which case I wouldn't mind investing in the entire market but I also want to put some money on the side into a specific market that I believe will generate a higher return? Should I open what is called a "brokers account"?
Alias Gamer
Alias Gamer 6 dias atrás
Love how he talks about elon musk making Tesla lose profits without actually saying his name and uses a tesla stock graph as an example 😂👌
Ethan Emma
Ethan Emma 6 dias atrás
Forex trading is the only big chance to make money, in just got into forext trading I made my first profit wish I knew about it earlier 🤑🤑🤑
James Lily
James Lily 4 dias atrás
I've never seen someone as perfect as Mr James Albert, he knows how to analyse trade, and with his strategies he earned me so much profit. Made €16,800 in 16 days of working with him
Karin Erin
Karin Erin 5 dias atrás
Most people are poor today due to doubt
Alex Boyce
Alex Boyce 5 dias atrás
Believe me Mr James Albert is the best when it comes to forex trading, your profit is assured.
あきらディアキ
あきらディアキ 6 dias atrás
Anyone who introduced you too Mr James Albert
Bufford Calvin
Bufford Calvin 6 dias atrás
Tell him referred you
Ke Qin Yang Museum
Ke Qin Yang Museum 6 dias atrás
Dear friend: Excellent information and wisdom knowledge! Many thanks Ke Qin Yang
Help Me
Help Me 6 dias atrás
I'm 15 right now and I'm rlly interested in this stuff but is is too early to start actually investing? Should I wait till I'm 18 and just keep gathering information or is there something I can do at my age
KoreanPolish*G-Man
KoreanPolish*G-Man 6 dias atrás
Hey Graham love your vids. Been watching them with my mom but it takes longer cause you talk to fast for her haha Have to stop and rewind. But you have great vids. Its never to late to invest. I do have a question about index funds. I bought 5 BRK.B since they were cheap during the pandemic. But one of my index funds also has BRK.B in them. In a way its almost like double dipping. Should I just hold them for a few years or keep them? I know you cant give advice but what would be your opinion? I try to make sure my index funds in my General and Retirement accounts dont have that many similarities. (Any one can also respond to this question.)
Sebastien Albouy
Sebastien Albouy 6 dias atrás
Good stuff. Though VTIAX and VTSAX have higher expense ratios than, say, VOO or VXUS... It depends on when you think you'll "need" your money. Short term higher yield I'd go for VTIAX or VTSAX. Longer term I'd go VOO or VTI, and VXUS, which have significantly lower ERs.
Bryan Herincx
Bryan Herincx 16 horas atrás
Should I invest through a ROTH IRA or taxable account?
Alex Clark 2014
Alex Clark 2014 7 dias atrás
Do you know of any platforms that won’t charge fees on index funds? It hurts me to invest $1,000 into a TD Ameritrade account to pay $150 in fees and have $850 left to invest
Reyes Enigma
Reyes Enigma 7 dias atrás
Graham, I live in Puerto Rico which makes me exempt from dividend & capital tax, would it be a good investment for me to go with both index and dividend stocks?
JacobPresland Drums
JacobPresland Drums 7 dias atrás
Am i missing something... so i invest $100 a week for 10 years with hopefully an average return of 10% i will get $5200 in interest after the 10 years?
JacobPresland Drums
JacobPresland Drums 6 dias atrás
@purp thanks mate
purp
purp 6 dias atrás
you did the math wrong you calculated 100$ x 4 x 12 =4800$ then 4800$ x 1.1 (10% interest) that would be one year only. 100$ a month with a 10% interest p.a. over 10 years will generate a total amount of about 20'000$ (bit more), you can use etf savings calculators online I think iShares got one on their website.
Chloe Di Zhu
Chloe Di Zhu 7 dias atrás
can you please do a video on interactive brokers?
johnnycashm0ney
johnnycashm0ney 7 dias atrás
I do 6% aggressive with deferred compensation for work. is it wise to invest in index funds too?
Wise Investments
Wise Investments 7 dias atrás
I have a question for which answer I cannot find anywhere... What is better to invest in - Index Funds or ETFs?
Nick Testa
Nick Testa 9 dias atrás
I would love an affiliate link
the.content.you.deserve
Since these are all mutual funds, it would be beneficial for most people, if you translated each to ETFs, which are cheaper to do the SAME thing!
Bryan Herincx
Bryan Herincx 16 horas atrás
so BND , VXUS, VTI ?
LNK INC
LNK INC 10 dias atrás
Thank you for the video. I do have a few questions. is there a good amount to start out with or is it best to just get started? When you say reinvested will it automatically reinvest on it's own or will a deposit have to be made to do the reinvesting? Thank you
A_M_P
A_M_P 10 dias atrás
So do we just buy one of each or keep buying as much as we can?
evolve ?
evolve ? 10 dias atrás
Is an index fund like dividend stocks
Jon Paton
Jon Paton 10 dias atrás
The only thing cheaper than Vanguard is the federal government TSP. That being said, TSP is limited.
Jon Paton
Jon Paton 10 dias atrás
Bonds is like stuffing an old matress, I-funds, a Chinese mattress
Hernan E Batista Z
Hernan E Batista Z 11 dias atrás
This is a great video. I am using it in my own website about this topic here: binbitforex.net/%ef%bb%bfyou-must-know-index-investment/
Business
Business 11 dias atrás
Why not just invest in spy
Boznianhero
Boznianhero 11 dias atrás
So glad I found this at the age of 72
Canned_gull
Canned_gull 11 dias atrás
There is actually service called Nordnet which has 100% free index funds for north Europe (SWE, NOR, DNK, FIN). For me it is free to invest to FIN but for others I have to pay some currency convert fees.
DJ The 3rd
DJ The 3rd 11 dias atrás
I wish my dumb ass was 20 while watching this. But glad I found it 💯
Adolph Abendroth
Adolph Abendroth 11 dias atrás
After a succession of payments from Alec Payden, it is ok to say that the individual is legitimate, I have no doubt going ahead with him, he even turned down my gift token and asked me to to give it to charity saying, “God has given him all that he needs, use him as a vessel and help those one need.
Adolph Abendroth
Adolph Abendroth 6 dias atrás
Walter Zumarán such a shame.
Walter Zumarán
Walter Zumarán 7 dias atrás
Nice scam, bro
Enrique Arrieta
Enrique Arrieta 8 dias atrás
So you telling me that a good trader does not have enough money to buy a domain? XD
The Pips Guy
The Pips Guy 11 dias atrás
All I can say is that he has being of great help to me and I appreciate it. Tbh I never thought I’d make this huge with him. Jokes on me lol
Ferries Wheel
Ferries Wheel 11 dias atrás
Hooooooooooò
אפרים יעקובוב
almost 1 mil views and only 73k likes so sad
Investwisely
Investwisely 12 dias atrás
I wish u can do a similar video showing how to win a million subscriber?
Adrianna Green
Adrianna Green 12 dias atrás
3 months until my 20th birthday! Gonna do it now .
Marqezzy
Marqezzy 12 dias atrás
Lol I watched this video on March 18th....I’ll be thanking you plenty in 10 years🙏🏽😭
Vat
Vat 12 dias atrás
What is a mutual fund ? And what companies are automated where I can just put my money in and they do the work and I just wait years for the profit
Rudy Mestaz
Rudy Mestaz 7 dias atrás
Acorn, Betterment, Wealthfront....etc.
Jake Hayward
Jake Hayward 13 dias atrás
2:30 good little dig at Elon there ahaha
Donna Russell
Donna Russell 13 dias atrás
If I invest in index funds, how many shares is a good investment to make in each?
Steve W
Steve W 13 dias atrás
did this a year ago with Fidelity's no-fee index funds and it's been the best decision i ever made
Steve W
Steve W 16 horas atrás
@Bryan Herincx I'd say that's the deciding factor. If you absolutely 100% will NOT cash out any of the money before age 60, go with the Roth IRA. If you ever see yourself cashing out some of the money earlier than that, do a normal investing account and hope that you don't get screwed over with taxes later. The fees from touching Roth money early probably outweigh the taxes you'd pay on withdrawing from a normal account
Bryan Herincx
Bryan Herincx 16 horas atrás
@Steve W This is what im stuck on and reason why i havent started. Should i invest through the roth or a taxable account ? I wanna save for retirement but also enjoy my money before and not wait till im 60 Also, when you invest into the index funds though a ROTH, the max contribution is 6,000 a year so how would I invest in the three funds graham mentioned when the minium is 3,000 for each which is 9,000 in total
Steve W
Steve W 13 dias atrás
@M H I opened a Brokerage account so I could invest a hefty chunk of my savings all at once. Might have been a better idea for me to do a Roth IRA though, so I'd recommend doing research into the differences between the two...
M H
M H 13 dias atrás
Hey I was wondering which type of brokerage account do people suggest open? Watching the video I assumed he’s talking about Roth IRA ?
Steve W
Steve W 13 dias atrás
@Megan Reed once you transfer money into your Fidelity account, do Grant's 70%-20%-10% strategy for these three funds listed in the same order: FZROX, FZILX, and FTBFX
Devin Hughes
Devin Hughes 14 dias atrás
Pause at 5:50 funny face :)
renegade_ace
renegade_ace 14 dias atrás
How do you feel about dollar cost averaging bitcoin?
Cash CashFlowSeason Analyst
VBTLX IPO’d in 2001 at $10.22. Almost 20 years later it’s at $11.49. Safe to say that index fund is trash 😂😂
joel Cazares
joel Cazares 17 dias atrás
I am a beginner, why can’t I find this funds on Robinhood? Thanks beforehand.
Jepoy JN
Jepoy JN 18 dias atrás
I like your video. I was enlightened to what to focus in investment.
Kasim Moez
Kasim Moez 18 dias atrás
Thank you
Annie Nelson
Annie Nelson 19 dias atrás
why does it read MUTF: before the tickers if they are index funds not mutual ?!
MN Twins Fan
MN Twins Fan 10 dias atrás
Annie Nelson, I don’t know why it reads MUTF even though they are index funds. As for minimums, mutual funds usually have a minimum investment of $500 although they may differ (some have zero). Index funds don’t have minimums but do have expense ratios of about 0.2%.
Annie Nelson
Annie Nelson 19 dias atrás
if anyone here knows please let me know :) as far as i can see it also requires a min investment of $3,000... maybe the ETF on Vanguard VTI is better? SOS
Jacob L
Jacob L 20 dias atrás
9 percent per year is nothing smh
Dylan Turley Vlogs
Dylan Turley Vlogs 20 dias atrás
So literally my question is where do I sign up, like literally? I have no idea like where to start and where to go to even buy stocks or let alone find them.
SeaSick
SeaSick 8 dias atrás
Open a brokerage account (ex. Charles Shwab). It takes less than 10 minutes to make one online.
A Trombone
A Trombone 11 dias atrás
If you need help getting started I started a month ago and have found it easy and successful. Message me on Instagram my username is Jason.gasser. I think I can help if no one else has answered you :)
ChromeVelocity
ChromeVelocity 20 dias atrás
if I'm from australia should i invest 70 percent AUS stock index instead?
Issac Perez
Issac Perez 21 dia atrás
What is the difference between a index fund and a Roth IRA. I recently turned 18 and looking to invest an extra couple thousands but I’m not sure which is better for me. Any advice?
Joshua Sanderson
Joshua Sanderson 21 dia atrás
So glad I found this at *insert age*
Geo_Tropic
Geo_Tropic 21 dia atrás
Nah dont hate on elon....
Vartan Pashayan
Vartan Pashayan 21 dia atrás
Get a free stock. You don't need to fund the account just make the account with my link and get a stock worth up $500! join.robinhood.com/vartanp4
castle
castle 22 dias atrás
Very unlikely that regular people can become millionaires by investing in ETFs. You can earn a good amount of money but getting rich with it is not realistic.
LEVANTATE Y ORA
LEVANTATE Y ORA 13 dias atrás
Specially how the economy is getting. Soon or later it will go down
Brocha Bar
Brocha Bar 22 dias atrás
Does anyone know of an index fund broker for non US citizens?
Jason Skelton
Jason Skelton 22 dias atrás
Hi Graham. All way from South Africa. Appreciate the video. I want to take your advise and after watching some of your videos webull is great probably the best but I can’t sign up as I’m not a US citizen. Any other advise or way I can sign up? Thanks
Pamela Guerrero
Pamela Guerrero 22 dias atrás
can you review M1 finance pretty please
Luke Napitupulu
Luke Napitupulu 22 dias atrás
Hi Graham how come you don't invest in Vanguard S&P 500 ETF?
Jackie Bentsen
Jackie Bentsen 23 dias atrás
What are Vanguard’s fees?
Jackie Bentsen
Jackie Bentsen 23 dias atrás
Is it okay to go with my bank when it comes to investing? The investment officer said he would recommend a UIT for me, and I also asked about the S&p 500 and I believe he mentioned that this is what that was (I would have to ask again). The management fee is 1.2% which I’m not sure is that good because I remember you saying 1% is high. He said there were no other fees to the uit, so not sure if this is the best option or if I should go off on my own?..
casey p
casey p 23 dias atrás
Benjamin Graham suggest the percentage of bonds to your age. Im 30 so i have 30 percent in bonds.
Vikram Khanzode
Vikram Khanzode 23 dias atrás
so glad I found this while I am still in my mother's womb
Abs Q
Abs Q 23 dias atrás
Can I get these on Robinhood?
Gaelen Mast Investing
Gaelen Mast Investing 23 dias atrás
Index funding is for sure the best way to go if you want to index but not spend hours pulling your hair out and stressing about choosing and managing stocks. I have a dividend focused portfolio but still own a dividend index fund or two in my portfolio!
Henry edwards
Henry edwards 24 dias atrás
will investing in vanguard say through a trading app have the same long term effect as opposed to using vanguards website directly ? thanks
LEVANTATE Y ORA
LEVANTATE Y ORA 13 dias atrás
Yes
The Economist
The Economist 24 dias atrás
The only ones getting richer are the brokers laughing at people who think they can get rich this (easy) way.
EazyKM
EazyKM 24 dias atrás
Thanks for this, we were never taught this at school.
Samar Amanullah
Samar Amanullah 24 dias atrás
Can a 16 year old do rhis
Stanley fujiwara
Stanley fujiwara 24 dias atrás
I'm happy to hear you guys talk about some of the positions I have in my portfolio. I made over $850,000 in profit this year investing in the stock market. I have $DOCU - 10000 units, $MELI - 5000 units, $TTD - 5000 units. just added TSLA, NTFLX, APPLE with the help of my financial assistant Maureen Kay Bryan. she handles my portfolio and picked most of my stocks. looking forward to 2 million soon
Stanley fujiwara
Stanley fujiwara 22 dias atrás
@Henderson Waters connect with her through Google
Henderson Waters
Henderson Waters 23 dias atrás
What is the minimum amount one can start with and how can I get connected to him
Morgan Rich
Morgan Rich 23 dias atrás
What firm is that can you share more information
Ravi Hirani
Ravi Hirani 23 dias atrás
are you doing any financial mentorship programs?
Meredith Elbert
Meredith Elbert 24 dias atrás
With everything going on in the world and the economic situation, this is definitely a buy signal for me.
mason clemente
mason clemente 24 dias atrás
If Graham Stephan had only 15k what would you invest in or do with that 15k dollars. I am sick of my job.
Ricky Ferguson
Ricky Ferguson 25 dias atrás
I'm 16 and I make 200ish a month. Wtf do i do
Henderson Waters
Henderson Waters 23 dias atrás
Yes you can With the help of a Broker
Daily Filipino
Daily Filipino 25 dias atrás
Hi can i invest in these index funds me being from asia? IM 17
FaithSZN
FaithSZN 26 dias atrás
Just turn 18 and I been waiting for this day to invest my dream coming trur
J RJM
J RJM 26 dias atrás
When you base your entire retirement plant off of a video by graham 😅 seriously graham thank you man! I’ve convinced both of my siblings to invest in these three stocks. I’m 20 and they are both a few years younger than me. Hopefully we will be millionaires some day thanks to you.
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