Ready to start investing but worried that the stock market might crash?

Are you eager to start investing but also worried that the stock market might crash soon? Let's see what happened if you started investing monthly right as the Tech Bubble burst. Or right before the Great Financial Crisis. If you are starting from zero but can make regular contributions to an investment portfolio, there’s almost no reason NOT to start investing. Right now.
In this video, we'll see why even starting a monthly contribution right before two of the worst stock market crashes in history began (The Tech Bubble and The Great Financial Crisis) led an investor to have a smooth and profitable investment experience. More importantly, we'll show you the true cost of delaying starting to invest by just two years - it could be worth an entire year's worth of salary down the road!
00:00 Intro
01:10 Why you might be hesitant to start investing right NOW
01:32 Contribution rate is more important than return rate (early on)
03:41 Starting to invest right before the Dot Com Crash
05:08 Starting to invest right before The Great Financial Crisis
06:52 The cost of waiting two years to start
08:12 Summary
WATCH MORE OF MY MOST POPULAR VIDEOS:
When does renting make more sense than buying a home?: • Renting versus Buying ...
How to calculate your Net Worth: • How to Calculate Your ...
How to find more money to save: • How To Find Money To S...
My podcast about "Mostly Money" things: www.buzzsprout.com/5821
ABOUT ME: I've hosted a personal finance TV show on the Oprah Winfrey Network, used to be a stockbroker, went to school to become a racecar driver (failed), founded a fintech company that provides financial planning software to financial advisors who want to help more people who don't have lots of money, and I consult with wealth management companies on commercializing applications of behavioral finance. I'm also quite fond of donuts.
SUBSCRIBE FOR MORE VIDEOS LIKE THIS: kzbin.info?...
MY BOOK TO LEARN ABOUT THE BASICS OF PERSONAL FINANCE: www.amazon.ca/gp/product/0143...
FOLLOW ME ON TWITTER
/ preetbanerjee
WEBSITE: www.preetbanerjee.com
#MoneySchool #PersonalFinance #LearnAboutMoney #LearnToInvest #money #stockmarket #finance #howtoinvest #budgeting #budget #savemoney #insurance #financialplanning

[@PreetBanerjee]

If you've already started investing, on a scale of 1 to 10, how confident were you when you put your first dollar into the markets? I'll go first: 4. I didn't get more confident for years after starting. And I wished I had started earlier.

[@neolithic3]

I was confident and at about an 8 when I first started. I saw firsthand how investing had helped my parents and grandparents.

[@anonymous1432341]

3-4 However the more time passes on the more confident I feel that I took the right decision.

[@PreetBanerjee]

@@anonymous1432341 That’s great! It’s hard at the time, but in retrospect I kicked myself for not being more diligent about saving and investing earlier in my investing career.

[@PreetBanerjee]

@@neolithic3 Having a trusted example certainly helps. Good for them, and for you!

[@neolithic3]

@@PreetBanerjee thanks and I was very lucky. Thank you for being a good example for those that maybe don't have an example to look up to. It's important information you are providing!

[@rjmaas]

My investments in both the stock market and crypto are doing well. Simply sitting tight when share prices tank and crypto currencies go down in flames. Dollar cost averaging mean I get more from each dollar when others panic.

[@mitchjoel]

These videos are amazing, Preet! Thank you!

[@PreetBanerjee]

Mitch! 👊🏽

[@sl523]

Great video, and appreciate the case studies that you illustrated!

[@stevebridge4375]

Great video, as always Preet! Excellent advice for investors no matter how much knowledge/experience they have.

[@terencejamesmusic4126]

Thank you.

[@Ikerone1]

Preet, i just wanna say thank you for your videos. I was a young man, debating about purchasing new or used cars, and loved that you outline scenerios instead choosing a side. Please keep them comming, youre clear and concise, and filled with knowlegde and wisdom!

[@PreetBanerjee]

Thank you, Robert!

[@AlbertaRealtorEddyTadesse]

this is great content

[@bensonmwamba6180]

I really love your content Preet, I said it before, I'll say it again. I feel like am having a conversation with a friend than some "guru". Kudos!!!

[@PreetBanerjee]

That’s the best compliment I could get - thank you!

[@ondinexu9275]

Which stock broker would you recommend ?

[@berugaming7160]

Preet, thank you!

[@PreetBanerjee]

You are welcome!

[@MrJaideepgambhir]

Hi Preet! Awesome video and very well articulated. Want to know what would be ideal low/mid risk equity funds to invest as I am keen to start now. If you have any suggestions would be very helpful to make a quick decision.

[@PreetBanerjee]

I created 50 short videos on the basics of investing - they are all free to watch. More information is here: kzbin.info/www/bejne/aGiUooSclst9rdU

[@5252085]

Best thing to do is invest using your TFSA!

[@Ssookawai]

I literally giggled nervously when I saw the title.... So I scrolled through comments, decided that maybe some random podcast is more fun before deciding to watch the content, that's how wary I am of anything related to stock markets.... then I heard my name in the example, saw how lame my portfolio (yes, it's mine😁) might look like with that mediocre rate of return but hey, my savings account's is much worse😅! Fine... I'll start investing, learn through experience and here's my confidence rate: 2.

[@teenidol18]

This seems like a much simpler method that I should follow. Currently I determine the date of my contribution to match the first letter of the security I buy. I buy XGRO on the 24th (because X is the 24th letter of the alphabet) and VGRO on the 22nd (obviously). But now that I'm going to be buying MGRW I need to remember to do that on the 13th of the month. It's a lot of dates to keep track of and I need a simpler system.

[@gubbeen]

Preet--really appreciate the thought and effort you put into these. I'm new to investing (but not business...or math) and have two concerns about what feels like the Standard Model of FP advice. I'd really like to hear your thoughts. (Or even a video response?) 1. Nobody seems to differentiate SAVING and INVESTING. They are very different undertakings: they use different tools, have different informational, social, behavioural, institutional and emotional dimensions, and different outcome horizons. In both of your examples ('perfect' vs. 'committed' and 'early' vs. 'delayed'), you are comparing regular contributions to an investment vehicle to _simply less saving_. It would seem more on point to compare the subjective experience and range of outcomes of *investing* savings and *saving* savings. (For example, how should we think about spending 10 yrs plugging funds into investment portfolio that achieves 1.5% annualized growth against the alternative of a high int savings account at, say, 0.75%?) 2. Following on the savings/investment distinction, if you are considering whether to invest prior savings (not just start saving+investing through regular contributions to an investment account), then timing market entry is a much trickier proposition. E.g., if you compare entry just after dot com bust with entry at the crest, the difference 15 years out is 100%. In my own case (50 yrs old, married w/ pre-teen kids, mortgage free), I had about 100k to do something with starting about a year ago. Unlike a decontextualized simulation, I had a lot of data to interpret, like a blazing market that showed no signs of burning out, but, as you said, reversion to the mean is a thing, even if you trust that mean to keep increasing at 6.2% over sufficiently long timeframes. The moral of the story is that I waited until the end of January 2022. Admittedly, there was still some room to slide, inflation had emerged as a different kind of bar of soap that no one really seams to know how to hold about. Then Ukraine. And, wait, what? What do you mean 'there wasn't enough oil, even before Russia invaded'?!? My point is that even with unnerving levels of uncertainty and even allowing for 'hold my beer' hubris, sometimes there is a discernable signal in the noise. My question to you is, was I as savvy as I'd like to think? Or was I simply as lucky as I fear I might have been? Keep up the stellar and really valuable work, D. from Calgary (an example of a random decision that's about to starting to feel lucky again...)

[@PreetBanerjee]

I’m traveling right now and just wanted to let you know I’ll provide a proper response when I get back home. Appreciate the thoughtful questions!

[@tenam9068]

Preet, Thank You. Greatly appreciated. I'm in my 40's and have not dipped my toes in the market since I have NO understanding and curiosity therefore I'm thinking of going ALL IN with S&P 500. Any thoughts?

[@PreetBanerjee]

All equity into one market index is very aggressive. Some other things you might want to consider is an all-equity asset allocation ETF that has 100% equity too, but diversified into other markets, with auto-rebalancing, etc. You could also look at a more balanced mix between stocks and bonds. If by "all in" you mean putting in a large lump sum, you'll definitely want to consider if all equity is too aggressive because you'll feel any volatility a lot more versus starting with smaller monthly contributions.

[@LeetGarra]

Could/should this same thought of "just start investing" apply to purchasing real estate? I'm 'ready' to buy and have saved a large downpayment in a standard HISA instead of ETFs for past 5 years, but now I'm hesitant because the real estate returns the past few years (at least here in Toronto/GTA) have been way above average. I can't tell if it's FOMO and foolish to buy now or if I should "just start". Part of me wants to just dump the entire downpayment into ETFs and continue renting

[@PreetBanerjee]

Yes, that's a very tough predicament. I've been renting successfully (investing on the side) for the last decade but if I had money in a HISA during this time it would be painful to see the runaway gains in real estate. I think a decision to buy real estate for personal use should be driven on whether you have determined that is the right thing for you. If you bought now, would you have a place that you would be able to live with? Maybe talk to some recent buyers you might know and ask them to be frank - many have expressed buyer's remorse recently due to not having money left over to live their lives, but others might be quite happy with their decision because they can finally tune out of the noise of hearing about real estate FOMO. Generally, without any details, I recommend that your decisions should be aligned to your well-thought out goals and not based on recent FOMO or other reactions. I also like looking at the downside of each choice option and wondering which would make me more resentful (and then do the other thing) 😊

[@LeetGarra]

@@PreetBanerjee Appreciate the time, effort and quality you put into your videos and even replying and engaging with your audience! Thank you

[@killroy8776]

Another great video Preet. Analysis paralysis can sometimes be a major blocker for people even to start investing. The sooner you get your dollars working for you the better.

[@PreetBanerjee]

Thanks, James!

[@chogno98]

Great job as always, Preet.

[@TheHockeyExpert31MTL]

Firstly, I'd like to say I really enjoy your videos as they're educational & reassuring, especially during periods of volatility & uncertainty. Can you also talk about housing in the future? Factors that explain why housing costs have increased dramatically both globally & in Canada? Will it continue? How should the younger generation approach housing in combination with saving for retirement/building an investment portfolio? Similarly, what are your thoughts or what does the research say on rental properties as an investment compared to something like a market-cap-weighted index fund or even an asset-allocation ETF?

[@miked104]

Preet damn son. I wish i watched your videos in 2012 when i got my first job

[@PreetBanerjee]

They say the best time to start was yesterday, and the next best time is today. Don't beat yourself up too much, you still have lots of time!

[@miked104]

@@PreetBanerjee thanks player

[@StewieWilfred]

Great video as always. I started investing once i could contribute to my rrsp march 2020 😬Luckily i kept on putting money away and used it for a down payment! Maybe the home buyers plan or housing could be a good topic for a video? Lots of people ive talked to trying to save in this crazy housing market arent familiar with the program it seems…

[@PreetBanerjee]

Great suggestion, Ryan. Thanks!

[@ak81]

It is interesting what you show us but 5 years for barely 10% profit ?

[@PreetBanerjee]

But the point is you were up during some of the scariest, extreme market periods.

[@markhermann3074]

Hey I hope you got permission to display those NFTs!

[@TechieGrl]

So good to see a bong guy speak so good nutral english without any regional accent which is so common and embarrasing when any bengali opens their mouth to speak in english lol keep up the good work

[@CharlieChaplinVideos]

When market starts crashing investors fret and exit. They never come back. Those who stay invested will reap insane rewards.

[@SWEETVENOM100]

Lol at all the bots in this comment feed

[@speedacademydave]

Did you just bad talk my DogeCoin?

[@PreetBanerjee]

Much gamble