PART 4 — Investing: Turning Money into a Wealth Machine

The 3 Golden Rules of Investing

1. Start Early – Time > Timing

2. Stay Consistent – Invest monthly, not randomly

3. Diversify – Never rely on one stock or idea

Core Investment Types

1. Index Funds / ETFs

Best for beginners. Track market performance passively.

• Example: S&P 500 ETF (VOO, SPY, VTI)

• Avg return: 7–10%/year long-term.

If you invest $500/month for 10 years → ~$86,000.

2. Dividend Stocks

Pay you passive income quarterly.

• Example: Coca-Cola, Johnson & Johnson

• Average yield: 3–5%

3. Real Estate / REITs

Buy property or invest through REITs (Real Estate Investment Trusts).

• Steady cash flow

• Inflation hedge

4. Crypto (Optional)

High risk, high reward.
Keep below 5–10% of your portfolio.
Focus on Bitcoin, Ethereum — avoid random coins.

How to Start Investing (Step-by-Step)

1. Open a brokerage account:

   • Robinhood / Fidelity (US)

   • Wealthsimple / Questrade (Canada)

2. Set up automatic monthly deposits.

3. Start with ETFs (VTI, VOO, SCHD).

4. Reinvest dividends.

5. Stay long-term (10+ years).

“Time in the market beats timing the market.”

The Magic of Compound Interest

Example:
Invest $500/month at 8% annual return:

• 10 years → $91,473

• 20 years → $294,510

• 30 years → $745,180

Even small amounts grow huge when given time.

Protect and Grow: Asset Allocation

Balance risk and reward:

AgeStocksBondsCash20s90%10%0%30s80%15%5%40s70%25%5%50s+60%35%5%

Rebalance once a year — don’t panic sell during downturns.

Bonus: Invest in Yourself

Your best investment isn’t a stock — it’s you.

• Learn new skills.

• Network.

• Take care of your health.

A $300 course that raises your income by $5,000/year = 1,500% ROI.