The 7 Investments You NEED to Own for Life (So You Can Quit Your Day Job)
Published: 2025-04-08
Status:
Available
|
Analyzed
Published: 2025-04-08
Status:
Available
|
Analyzed
Predictions from this Video
Incorrect: 0
Prediction
Topic
Status
Manhattan real estate is expected to yield 1-1.5% returns, while rural Idaho real estate could yield 10-12% returns.
"In the commercial real estate world, this number is called your cap rate. So, if hypothetically you were able to find a closet for sale in Manhattan for $200,000, you probably wouldn't be able to rent it out for $2,000 a month. You'd be renting out for a whole lot less because the cash return that you'd be getting in Manhattan is much lower. You're not seeing 7% returns. You're seeing 1% returns, maybe 1.5% returns because there's so much demand to buy in that area. versus if you go into rural Idaho now, you might be seeing 10 or 11 or maybe even 12% returns because there's not as much demand, more risk, and you might have a tougher time finding a tenant."
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Startup investments can go up very fast but can also go bankrupt just as fast.
"Startups that I've invested in have gone bankrupt. Same with crypto. We've seen crypto booms and busts. So, yes, it can go up, but it can also fall just as fast."
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Gold is predicted to hold more buying power than cash over a 10-year period due to inflation, although this is not a certainty.
"My theory is that if I buried $10,000 worth of cash and $10,000 worth of physical gold in my backyard, my theory is that in 10 years the gold would have more buying power than the cash because of inflation. Am I certain? Absolutely not. But that's why I own a little bit of gold."
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Quantum computing is anticipated to be the next major technological advancement after Artificial Intelligence, involving the creation of significantly more powerful chips.
"Quantum computing is believed to be the next technology after AI. It is an idea of creating chips that are infinitely times more powerful than the chips we have today."
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There is a division of opinion on the current state of Artificial Intelligence: some believe it is in a bubble poised to crash, while others think it is only beginning its growth.
"Again, there's been a huge runup in artificial intelligence. Some people say it's a big bubble that's about to crash. Other people say it's just getting started."
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A US recession could negatively impact US investments, while other economies, such as India's, might experience growth concurrently.
"If the United States economy enters a recession and the stock market goes down and real estate prices go down, that would impact your investments in the United States. But sometimes you'll see a recession in the United States while other countries like say India are seeing a big boom with their economy."
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Given the historical frequency of recessions and market crashes, investing in foreign countries is recommended as a strategy to succeed across different asset cycles.
"In the last 100 years, we've seen 16 recessions and 25 market crashes. They're going to continue happening. So one of the things that you can do to make sure you win in all types of asset cycles is invest your money in foreign countries as well."
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The speaker suggests allocating 10-20% of an investment portfolio to speculative assets once wealth has been built, with a personal limit of 18%.
"As you start to build your wealth now, maybe you can work your way up to 10% of your investments in speculative and maybe as you start to really build more wealth, maybe 20% of your investment portfolio can be more of speculative assets. But I wouldn't do more than that. For me, my speculative assets make up no more than 18% of my investment portfolio."
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Travel to Hawaii for a digital business, including flights with a spouse who is also a business partner, can be considered an ordinary and necessary business expense.
"Well, if you have a digital business and you have to say travel to Hawaii for 2 weeks for business, maybe you have to have some meetings out there, maybe you have to record some videos, maybe you have to go out and look at some real estate, but if you have to fly out to Hawaii with your business partner who happens to be your wife or your husband. Now, that flight to Hawaii is a business expense. It's ordinary and necessary for your business because you need to go to Hawaii."
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A G Wagon could potentially be a deductible business expense for an influencer if it's deemed necessary for maintaining their image.
"Well, you are an influencer and because you're an influencer, you might need a G Wagon to maintain your image as an influencer. I said, 'Is that real?' He said, 'Yeah, people are doing it all day and night long.'"
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Tax rates on dividend income are generally lower than on income earned from a job, as the tax code incentivizes investment income.
"Although the nice thing about dividend income is your tax rates are generally lower than the tax rate you would pay from your job if you earn that same amount of money because the tax code incentivizes you when you make your money from investments and they kind of punish you when you're making money from your job because well when you're an investor you qualify for lower tax breaks and higher tax rates."
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Real estate offers significant tax advantages, allowing investors to legally pay little to no taxes on their earnings.
"As an attorney, who's not your attorney, what I can tell you is that real estate comes with the biggest and best tax breaks that a tax code has to offer. So even though you're making this money every single year, you can pay little to no money in taxes legally, which is why some real estate investors are making millions of dollars a year paying little to no money in taxes because that's what the IRS says."
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Tech companies are generally characterized by a focus on growth and innovation.
"And we know that in general tech companies are generally focused on growth because they're always trying to innovate."
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Growth stocks are typically from smaller companies prioritizing share price growth over immediate large profits or dividends.
"What is a growth stock? Again, these are smaller companies that are focused more on the growth that are not really working to make huge profits and pay out big dividends. They're focused on growing their share price."
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Investing in emerging markets offers potential for higher economic and company growth, but comes with higher risk and higher potential return.
"This invests in the emerging markets, the smaller countries. So you can start to see the differences. If you want to invest in a more smaller country where you can see more growth in the economy and more growth in those companies, higher risk, higher potential return, this and other emerging market ETFs could give you access to that."
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Generational poverty is attributed to learned beliefs and mindsets about money and wealth, passed down through generations.
"The reason why generational poverty is generational isn't because it's in your DNA. It's because many times you're bred to believe the things that poor people believe. When you believe that money is bad, rich people are evil, that you can't afford these nice things. And you grow up hearing that. That becomes ingrained and wired into your brain. So then when you have kids, you say the same things."
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Investing in cash flow producing businesses can be done by operating a business directly or by passively investing in dividend-paying stocks.
"When I talk about investing in a cash flow producing businesses, I'm going to break this up into two parts. One is a business you operate. This might be you actually going on starting a business, which is not for everybody. In fact, it's not for most people. And then the alternative is investing passively, which would be like investing in a stock that's paying you with cash flow."
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Owning even one share of a company like McDonald's entitles an investor to a portion of its profits, distributed as dividends, as demonstrated by McDonald's distributing $5 billion in 2024.
"If you go out and you buy one share of say McDonald's, you become one of the owners of McDonald's. Now, you don't get to tell McDonald's what to do, although you do get voting rights, but you are entitled to your share of profits because you own one piece of the McDonald's pie of ownership because you own one share. And because you have that, when McDonald's has this big profit at the end of the year, they gave a big chunk of it away in 2024. They gave away about $5 billion. You're going to get your piece of that, one share out of the many millions of shares that they give out dividends to."
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A property rented at $2,000/month, generating $24,000 annually, could yield a $14,000 profit after deducting $10,000 in annual expenses.
"And then put some money in your pocket every single month. So, let's run some numbers. If you rent this property out for $2,000 a month, that means this property can generate $24,000 a year. But you don't get to keep all that money. You got to pay all your expenses. Remember the property taxes, insurance, maintenance, management fees, and your vacancy costs. Let's assume that those five costs charge you $10,000 a year. That means you are profiting $14,000 a year."
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A 7% cash on cash return is considered a desirable threshold for real estate investments, meaning for every dollar invested, 7 cents is generated in cash flow.
"For me, what I like to look for is a 7% cash on cash return. Meaning, for every dollar that I invest, I get 7 cents of cash flow without having to see any appreciation. So, if I take $14,000, I divide it by $200,000. You can do it on the calculator. This gives me 7%. Meaning this hits my threshold for cash flow."
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Investing in foreign countries can provide diversification benefits, potentially offsetting downturns in the US economy when those countries are experiencing economic booms.
"If the United States economy enters a recession and the stock market goes down and real estate prices go down, that would impact your investments in the United States. But sometimes you'll see a recession in the United States while other countries like say India are seeing a big boom with their economy. And this is where you can see some real diversification where if you own assets in India or other countries, well that could benefit you during a time of downturn in the United States because we know recessions happen. We know market crashes happen."
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Recessions and market crashes are cyclical events, with 16 recessions and 25 market crashes occurring in the past 100 years.
"In the last 100 years, we've seen 16 recessions and 25 market crashes. They're going to continue happening."
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Tech companies are generally focused on growth due to their constant drive for innovation.
"And we know that in general tech companies are generally focused on growth because they're always trying to innovate."
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The QQQ ETF provides exposure to the NASDAQ, which comprises the 100 largest non-financial stocks, predominantly in the tech sector, thus offering broad exposure to the tech industry.
"There is an ETF called QQQ which invests and gives you exposure to the NASDAQ. The NASDAQ is a group of the 100 largest stocks that are not financial which means most of the companies, not all but most of the companies in the NASDAQ are techreated. So if you want to get exposure to tech, many people will say that QQQ is an ETF that can give you exposure to the broad tech area."
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The VUG ETF, offered by Vanguard, provides investment exposure to growth stocks.
"VUG is an ETF created by Vanguard, which gives you exposure to growth stocks."
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The IWF ETF, from Eyesshares, offers investment exposure to growth stocks.
"And IWF is an ETF created by Eyesshares, which also gives you exposure to growth stocks."
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The VGT ETF by Vanguard provides exposure to Information Technology (IT) companies, and is recommended for those who believe the IT sector will experience significant growth.
"VGT is an ETF created by Vanguard which specializes in giving exposure to IT companies, IT stocks. So if you believe that the IT sector is going to explode, this is something that you may want to consider or other ETFs related to it."
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The QTUM ETF offers exposure to quantum computing, considered the next technological frontier after AI, focusing on developing chips with exponentially greater power.
"QTUM is an ETF that gives you exposure to quantum quantum computing. Quantum computing is believed to be the next technology after AI. It is an idea of creating chips that are infinitely times more powerful than the chips we have today."
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The AIQ ETF provides investment exposure to companies involved in artificial intelligence.
"And then we have AIQ, which if you couldn't guess from the name, is an ETF that gives the exposure to artificial intelligence."
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The VMI ETF by Vanguard offers exposure to high-dividend-paying international companies, focusing on dividends and cash flow from non-US entities.
"VMI is an ETF that I'm personally invested in as a disclaimer, but this is an ETF created by Vanguard that gives you exposure to international companies, but more specifically high dividend paying international companies. So, this is an ETF focused on dividends, cash flow, but not in the United States, internationally in non- United States companies."
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The VA ETF from Vanguard specializes in investments within developed foreign countries, focusing on established economies outside the United States.
"Then we have VA. This is another ETF created by Vanguard, but this specializes in investing in developed foreign countries. So more of the established foreign countries around the United States. This invests in companies in those developed countries."
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The EMG ETF provides investment exposure to emerging markets, which are typically smaller countries.
"But then we can compare that to EMG. This invests in the emerging markets, the smaller countries."
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The Inda ETF offers investment exposure to Indian companies.
"For example, Inda is an ETF that gives you exposure to, do you want to guess? Indian companies. companies in India."
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The EWZ ETF provides investment exposure to companies in Brazil.
"EWZ is an ETF that gives you exposure to companies in Brazil."
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Cryptocurrency is categorized as a speculative asset by the speaker.
"Cryptocurrency is something that I consider a speculative asset and I treat it like that in my investment portfolio."
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Physical gold, comprising 2% of the speaker's portfolio, is viewed not as a primary investment but as a hedge, a form of 'real money,' and a means of protection against economic downturns.
"For me, this is me investing in physical gold. I have about 2% of my investment portfolio in physical gold because the way that I look at it, gold is a form of real money. It is a form of hard money... But that's why I own a little bit of gold. It's not a huge investment. It's only about 2% of my total portfolio. I don't look at it like a real investment. I look at it like a way of saving hard money. But that's my way of having a little bit of doomsday protection, a little bit of insurance against all of that."
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After gaining control over life outcomes, financial education is crucial for understanding money mechanics, including investing, saving, debt management, and wealth building.
"Once you understand that you have the ability to control the outcomes in your life, now you got to understand how money works. This is learning how investing works. How do you put money aside to invest? How do you systemize your money? How do you pay down your debts? And how do you actually build wealth?"
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High-quality research is directly linked to making better investment decisions and identifying suitable opportunities.
"The better the research you have, the better the investments that you can make. And this is where you can do this on your own. And I would encourage you to try to do so. Try to keep up with shifts that are happening. Try to keep up with what types of investments you want to make. That way you can find the right opportunities for you."
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The example assumes a US household income of $60,000 per year, equivalent to $5,000 per month.
"Let's assume that you make as a household $60,000 a year, which is $5,000 a month."
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When managing finances, the government is considered the first entity to be paid, preceding businesses like Chipotle or Amazon.
"Now, who's the first person that you're going to pay? It's not Chipotle and it's not Amazon. It's the government."
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