Thread by @ElevatedStory

The stock market.

And what school didn't teach us about money.

Thread ↓

You're not an investor.

And I'm not an advisor.

So why should you read this?

Well...

11 years ago I spent 8 months living out of a car while working a $10/hour job.

But...

If I'd known about investing while working in high school...

I wouldn't have gone through that.

Understand...

Your money is being invested.

If not by you then by someone else.

And they're reaping huge returns.

And they're not sharing it with you.

So you might as well get in on it.

By the way...

This is not investment advice.

Not this time Nikhil.

https://twitter.com/nikillinit/status/1491921866323283968

Let's go.

First:

In big business...

The big things happen on the back end.

Here’s what I mean...

Example #1

Amazon is valued at $1.6 trillion.

You know Amazon for its…
• Shipping
• eCommerce platform
• Media streaming

Their biggest money-maker?

Amazon Web Services:

A cloud computing platform most people never heard of.

Example #2

You keep your money in a bank account.

It’s likely free—as long as you keep a minimum balance.

The thing is...

Banks use your money to invest in stocks.

And they keep the returns.

That's their biggest money-maker.

Not overdraft or credit fees like you thought.

And it's not just the banks that operate like this.

Insurance companies play stocks too.

With your premium payments.

Because...

There’s about a 6% chance anything bad will happen to you.

And they only lose money if something bad happens to you.

There's almost no risk to them.

Insurance companies are MADE of money.

See why Warren Buffett invested in Geico?

So...

That's the first thing:

Understand how businesses REALLY make money.

Next…

We all know what to do with money:
• Get it
• Spend it
• Save it

But 99% of us don’t understand HOW money works.

The thing is...

Money is always moving.

And the value of money is constantly changing.

Cash depreciates every time more is printed into circulation.

So a dollar today is worth a little less tomorrow.

Why am I telling you this?

If you trade your time for money.

The value of your TIME is also worth a little less tomorrow.

Trading time for money is a zero-sum game.

You can't build wealth that way.

So how do we build wealth?

Positions.

In other words...

Don't chase it.

Be where it goes.

But let's be real...

If you're broke—like I used to be...

Then yes.

Chase it.

Learn a high-income skill.

Like copywriting.

But when you get things going...

And you're making more than you spend...

Learn to invest it.

Here's a good way to start:

Example #1

Whatever you buy—invest in it.

So if you eat at Chipotle every day 👋—invest in Chipotle.

Example #2

The bank that's playing with your money?

They’re likely public.

Meaning...

You can grab some of their stocks…

And benefit from their profits.

Makes sense?

So that's the second thing:

Understand How Money Works For YOU

Last…

The stock market seems intimidating.

And feels risky.

But there are different ways to approach it.

Let’s say you can’t afford an APPLE stock (at $172-ish right now).

Or you're not ready to pick out your own stocks.

That’s ok...

You can invest in the S&P 500 or ETFs.

These are bundles of companies rolled into one stock.

The returns on these investments are usually low.

But the risk of loss is GREATLY reduced.

And the returns are historically better than the bank's annual return on a savings account.

Great way to start learning.

You can also look at 'peripheral' companies.

For instance...

Not really interested in investing in McDonald's?

But you know fast food is BIG...

And you want in on it?

Invest in the real estate company that leases properties to fast-food chains.

Get the concept?

So that’s the last thing:

Understand Your Investment Options

And that's the thread.

TLDR Investing basics:
1. Understand how businesses make money.
2. Understand how money works for you.
3. Understand your investment options.

I learned most of this from The Wall Street Trapper.

Look him up on YouTube.

This is a little different from what I usually tweet about.

But if you enjoyed it...

Retweet the first tweet to help the rest of Money Twitter up their game.

https://twitter.com/tibo_maker/status/1492173350357155842