Millennials Guide to Investing

[Music]

hey guys

my name is shashank udapa and in this

video right in this talk

i’m going to talk to you about the

different types and different ways where

you can invest if you’re a millennial

now i’m not going to give you the same

mumbo jumbo that a lot of people in the

market give you

but i’m going to try and teach you how

to turn your mind in a different way or

how to think from a slightly different

perspective

i’m going to try to make you understand

concepts that are not

very generic okay so it’s slightly

different for you guys as well

in this talk i’m going to walk you

through that journey with my own

personal experiences in the finance

realm

how i did some mistakes when i was a

millennial and i was starting to invest

early on in my life

and hopefully you guys can learn from my

mistakes and actually lead a better

financial life

quite early on okay so in the next

segment we’re gonna talk about

five different points that i feel are

like golden rules for millennials

to start investing very early on rule

number one

don’t go for that quick money that

everyone’s making out there now i’ll

give you an example and this has

happened

just now in the recent market where a

lot of people try to find these

opportunities and try to find these ways

and methods to make a quick buck very

fast

now millennials i know have little less

patience they want everything

very quickly but what i’m trying to tell

you is don’t try to optimize for this

quick money quick gains

optimize for long term wealth creation i

know a lot of my friends right now with

the cryptocurrency boom and the ipo

bubble that’s also happening

a lot of people are investing in ipos

only for listing gains

as soon as the ipo comes out in the

market and starts listing they make 30

40 50

returns remove the money and keep it in

their pocket that’s it that’s done

if you look at what the cryptocurrency

market is doing right now

we see deutsche dogecoin becoming a

thrill because someone is tweeting in

the other half of the world

but a lot of people don’t care what the

fundamentals of dogecoin are

people are just investing in something

so that they can get that quick gain or

quick money out

and put in their pocket now all the big

guys in the financial

industry okay all the people whom you

have seen in the past warren buffet

rocket and genoa all these guys have not

built their empire or built this

kind of wealth over a period of one year

or six months if it was that easy

everyone would do it

what i’m trying to tell you is think

from a different perspective

try to look at it from a long-term view

let’s go directly 20-25 years into the

future

and you make a plan and say okay you

know what when i retire when i’m 60

i want this much capital at the end of

my 60th year

and that is what i’m gonna work towards

backwards and when you start doing this

long-term planning you look at something

that is fundamentally strong that will

survive the test of time

and not just go for something that is a

quick money or a quick gain

okay so for all the millennials out

there this is the golden rule number one

rule

let your friend make that extra 10 000

15 000 he might get lucky once he might

get lucky twice

but maybe on the third time he might

just fail and i don’t want you to do

that

so i want you to invest for a long term

period of time and keep tracking

whatever you’re investing in whatever

instrument it is keep it for a very long

period of time because trust me

if you know how compounding interest

works you will make a lot of money

over a long period of time now my second

rule and i call this the eight percent

rule now i’ll tell you why i call this

eight percent rule

first thing a lot of people need to

understand and i told you right at the

start of this video we’re gonna change

our perspective of finance

i want you first to understand how

percentages work and not just look at

monetary value in terms of rupees i’m

not looking at ten thousand fifteen

thousand i’m going to look at how

percentages work

because that is more important now think

about this and why i call this the eight

percent rule

when i just started earning when i

started making my first salary a lot of

people told me including my close family

members my society people they all told

me that

fdma invest karo it is very safe for you

and i said okay cool

maybe that is good right let me invest

in an fd which was giving me around

six six and a half max seven percent at

that time this is for a year

but then i realized being a finance

student i realized

that you know what the inflation rate in

india itself varies around five to seven

percent now see i’m only talking about

percentages not any kind of inr income

if in if the inflation rate is around

four to seven percent fluctuating

i need to at least beat inflation then i

realized a big issue

that a lot of people in india look at

returns okay they say i got 10

returns and they’re very happy but they

didn’t they don’t look at it from an

absolute return perspective

they don’t look at how much inflation

has increased over a period of time if

this year the inflation was maybe five

percent

then i need to make post tax returns of

at least seven eight percent to be even

good enough

so don’t look at only monetary value

even if you make

some kind of money okay if you make ten

percent a year cut the tax from it you

might make nine percent a year

and then say you know what shashank i’m

still not happy with this because it’s

nine percent

but the inflation this year as

calculated by india was say five percent

so i’ve actually made only four percent

return in the entire year now you decide

whether four percent is good or bad

for your long-term plan that you made so

i call this the eight percent rule

because you need to understand whenever

you’re investing in any instrument

first realize is it at least beating the

fixed deposit

okay is it beating my inflation if these

two things are happening

only then invest in a particular stock

if not stay away from it go for a higher

percentage rule

now my third thing that you need to look

at quite closely

is something known as interest now

interest can be good

and can be bad and you guys have heard

of interest as you know if you invest in

a fixed deposit or a savings deposit or

any kind of scheme

you get so much so interest but you’ve

also heard interest in another context

where you have to pay emis which is also

in interest you have to pay the interest

back when you take a loan from someone

now i want you to understand this term

of interest very clearly

when you are investing early on in your

life and i did this very same mistake

because i’ll tell you why when i’m in

college i’m getting a lot of money from

my parents for you know as pocket money

so i don’t have anything i just have to

take their money and spend it

and i should do that a lot now once you

start earning your own money

okay all shackles are off you’re

completely free and you can do whatever

you want with that money

and that was when i went and got a

credit card mistake number one because

credit cards are not bad but if you

don’t know how to use them you rack up

big debt you rack up a lot of interest

and i got a credit card super power in

my hand kept buying all the fancy phones

you know no cost emi had come at that

point so i just kept buying

but everything has a cost and i ended up

having my

credit card bill extremely high more

than two times my entire monthly salary

and that was bad because the interest

now was

highly highly highly more than what i

was actually earning so this was not a

good thing for me

now then what i realized i had to pay

back my entire interest entire emi

cut off my credit card completely for a

bit until i know how to manage my money

well

and then i realized dude in the early

days of life

you need to make money work for you so

you need to put money in a place

where interest is your friend not your

enemy and currently in my year i was

interest was my enemy and i was actually

paying interest to someone else so that

was not cool

so what you need to do early on in your

life as soon as you get a job as soon as

you start making some kind of money

start investing this in money so that

you make interest your friend

and don’t keep buying something on an

emi or you know buying something that’s

out of your budget

and make interest your enemy if you

understand how to make interest your

friend

trust me he’ll be your best friend for

life and you’ll make a lot of money with

this friend

so always invest in something and get

interest to work for you make money work

for you don’t you don’t sit and work for

money so that i have to keep paying it

back

now point number four that i realized

very early on and i have to tell you

guys this

please do your own research now when you

start making money

and remember the point which i spoke

earlier where you see a lot of people

making that quick money the first rule

where everyone is trying to make quick

money you will get a lot of friends who

will come and meet you and say you know

what shashank there’s this amazing stock

that you need to buy

definitely kalbi’s percent it will go up

by 20 for sure 100

now that might be true but just because

he told me i’m not going to invest in

that and i did the same mistake when i

started earning very early in my life

i just heard people saying buy this for

more right you buy that you lose out on

that eight percent if you don’t buy this

right now

and maybe it might go up okay maybe he

was right

but i didn’t do any fundamental research

and i was banking on that guy

maybe he’s right for the first time

maybe he’s right the second time and i

keep investing more because what he’s

saying

and then the third or fourth time i

started losing money and that would just

create a bad cycle so if there’s a

friend

you know and we all have this friend if

there’s a friend who comes and tells you

you know what

shashank invest and you know invest in

this stock will give you 15

up i’m telling you it’s amazing you

should tell him very clearly that

okay cool i get what you’re saying let

me do my own research and let me

see if it aligns with my risk of how

much i can invest

because maybe for you 10 000 rupees is a

big amount maybe for him it’s a very

small amount maybe he’s done this two

three times before

so you need to understand how your risk

you know proportion is

you need to understand whether it’s good

enough for you to invest in something

like this

and if he is investing doesn’t mean you

have to invest because don’t fall into

that weird fomo

always always always in the stock market

or any market whenever you’re investing

your hard earned money

be it real estate be it stock market

beat any financial instrument

that is making money for you please

understand that you need to do some

fundamental research okay you need to

figure out

i’m putting this money inside is it a

good thing or is it a bad investment

is it sticking to my rule that i’m

making more than eight percent or not

and am i doing this for quick money or

am i doing it for my long term vision of

60 years

and if it ticks marks all of these

things then you go buy it

if it doesn’t your friend might call you

the next day and say hey

you didn’t invest i know i got 20 more

it’s okay tell them that’s fine man i’ll

see you after 15 years

and let’s see who has a bigger network

at that point now the last thing that i

look at and this is very important for

everyone who’s investing in the stock

market for the first time

don’t get scared and i’ll tell you why

it might seem daunting it might seem

scary when you’re investing in the stock

market you know

newly investing in the stock market and

when even though i was a finance guy

when i started my career even though i

was a finance guy i was an investment

banker

but the first thing when i had to go

invest the biggest question was which

dmat account to open

uh which bank account to open in the

first place what are the brokerage

charges

um you know how do i invest what are the

different type of orders there because

all these things were not taught in b

school they were not taught in my

college right they don’t tell me what a

market order is or what you know gtt

order is

no one talks about intra-day trading no

one talks about technical analysis no

one talks about fundamental analysis

and that was a big learning for me as

well and i was scared i’m like okay how

do i identify what is good and what is

bad there is

so much information out there and each

stock is in a particular sector

now what i’m trying to explain here is

that if you don’t have any knowledge in

the stock market

and if you say that you know what i

don’t have the time to do this research

about the stock market

it is still fine it doesn’t mean that if

you don’t know this you should not save

or should not start investing if you

don’t know all this it is completely

fine because there are two instruments

that is very easy for

this and it is built for people who

don’t have the time or don’t understand

the stock market

and they are called mutual funds and

exchange traded funds which are etfs

now what mutual funds do is basically

it’s a fund that is managed by someone

else

okay some experienced guy who’s putting

money for you and growing your money for

you it’s like

you have this guy who’s growing money

for you and you have to pay him a small

amount which is negligible when it

compares to how much money he’ll

actually make for you

so here you don’t have to think too much

you just need to pick out a good manager

a good fund and invest in that if you

think even that is too annoying shashank

i don’t want to do so much research as

well

then just go with what the nifty index

is going there’s something called as

nifty index you can invest in etfs

and you can just follow the market

because we all know that over a long

period of time

sensex has gone up nifty has gone up and

it’ll keep going up

small things will keep going up and down

agreed don’t look at that look at a long

term picture

10 years into the future 20 years into

the future and

if you think that you know what

everything is too confusing then just

invest in the index

and it will go up and a lot of big

people also recommend investing in

indexes if you are if you don’t have

that

patience or you know you don’t have that

thing of understanding how the stock

market works so don’t worry

don’t get scared there are a lot of

resources out there for you to learn

from

take your time and then start investing

but please do invest early

so guys these were my five points my key

learnings that

i understood when i was young i made

these mistakes so i don’t want you guys

to make these mistakes

so i put out in a way where you can

understand quite easily quite simply

and this is for everyone who wants to

start investing when they’re young and

trust me it is always good to understand

how compounding interest works

start investing when you’re young and

early don’t wait you know for a very

long period of time i know a lot of

things

a lot of things will tempt you in life

when you start investing early right

you’ll find this amazing phone or your

friends are going to go

and there’s so many things that keep

happening around it’s okay it’s fine

i would say a beautiful benchmark would

be whatever you earn

okay just save 10 of that or maybe 20 of

that and remaining 80

of whatever you want on a monthly basis

it is for you to enjoy do whatever you

want

no problems no questions asked but only

that 10

just try to make this discipline of

saving it doesn’t matter whether it’s

500 rupees per month

but trust me if you build this

discipline very early on in life

it will be amazing and super beneficial

for you and trust me you’ll thank me one

day because of this

so i hope i was convincing enough to

change your mindset about how money

works it’s not about money it’s about

percentage understand how interest works

don’t get scared about investing and

start early as soon as possible because

if i could go back in time and tell my

younger self that you know these five

points trust me it would have been a

beautiful life right now

but again i did that mistake and i don’t

want you guys to do that mistake

so please educate yourself and start

investing soon

thank you