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