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If you want to learn how to invest your money to create a new source of passive income and quit your job, this video is for you. When most people think about investing, they ask questions like, "Is SpaceX a good stock? Should I buy Nvidia stock? I wonder if I would have made more money if I had bought McDonald's or Tesla stock?" These are the wrong questions. When you ask, " What stocks should I buy right now?" It's almost like asking, "What car should I buy right now?" Do you commute to work yourself and want to save on fuel? Are you transporting a family of five? Or do you have a lot of extra money and want a Lamborghini or Aston Martin? If you want
to know which stocks are the best to buy, start by understanding what goal you want to achieve with them. Do you want to see growth? Do you want to receive income, i.e. dividends? Do you want to preserve your capital? Growth means I want to buy a stock for $100 and I want it to grow to $1,000 as quickly as possible. But it also means that you likely won't see any dividends because the company may not even be making a profit. They try to grow so fast that they spend all their profits and then take out loans and raise funds from investors. This way they can grow as quickly as possible, increase their market share, and become a large company in the shortest possible time. So you see the fastest growth, but also a greater risk that the stock could
fall or the company could go bankrupt. Income means I need a company that pays dividends. A dividend is a regular cash payment. This is money that comes into your account, usually every 3 months. You don't have to sell the shares to get the payout, it's just income that is credited regularly. But for a company to be able to pay dividends, it must first have large profits. And if a company has such large profits, it can do three things with that money. First, they can reinvest this money. This is what growth-oriented companies do-they reinvest all their funds. Option two-they can set aside this money for an emergency, or option three- they can simply give this money to shareholders, like you or me, in the form of a cash payment called a dividend. Well,
if they give away their profits, they simply won't grow as fast, because that's billions of dollars they could use to open new stores, create better products, or accelerate development. Instead, they give away profits because they believe they are already big enough, so they want to have slow and steady growth, and investors get their share of the profits. So, less growth, less risk, more stable cash flow. Capital preservation means I have plenty of money for retirement. I just don't want to lose them and I don't necessarily want to invest everything in bonds. I still want to own stocks or other types of investments.
I just don't want to see my money depreciate when the markets fall. This is what a And now that you're starting to understand your goals, you can ask the question: is this a good stock for growth? Is this a good dividend stock or is it a capital preservation stock? And when you start thinking like that, you start thinking like a real investor because now you can make the right decision and give an informed answer as to whether this stock is a good one because now you have set certain parameters. So now that you understand the basics, I want to break down in this video how you can create a new source of passive income from your investments so you can be free from your job, because there's more than one way to do
it, and I'll break it all down in this video. So be sure to stay with me until the end. To keep us on the same page, let me show you what most people's financial statements look like. People go to work every day to earn money. . You use that money from work to buy a house, a car, pay for a vacation, buy groceries, and only if there is money left over, then you invest it. But, as a rule, most people have nothing left, so there is nothing to invest. What we're trying to do is this: you go to work or do business, and I'll draw a mustache for my male subscribers, which in my native Punjabi language is called " much." I will draw a braid for my followers, which in my native Punjabi language we call a "gut."
You work to earn money, and now the first thing I want you to do is invest that money; and only then did they spend what was left after investing. Because the goal now is for these investments that you are about to purchase to start making you even more money. And the goal is that because you're limiting yourself a little bit here, you have less money left over to spend because you invest first and then spend. The goal now is for you to work towards accumulating these income-generating investments so that one day you can start living off of these funds and no longer have to go to work for a paycheck. Working becomes an option because you are earning enough income from your investments to fund your lifestyle. That's the
goal we're talking about here, and there's more than one way to achieve it. For this video, I'm going to focus on the stock market, specifically because the way the stock market works is that you can go out and buy a share of an individual company. I'll just take McDonald's as an example. I'm not telling you what to invest in, I'm just giving an example. If you buy one share of McDonald's stock, you become one of McDonald's shareholders. So, every corporation on the stock market is divided into parts called shares. And when you buy one share, you become one of the shareholders of that company. You don't have to go work for this company, you don't have to fry burgers, but you get your share of the profits. And you can get your share of the profit in one
of two ways. First, it is an increase in value when the price of a share increases. Secondly, it is dividends, when a company makes a large profit and pays it out in the form of cash dividends, meaning this money is usually credited to your bank account every three months. As an investor, you earn money without working, but it also comes with risk because there is a possibility of McDonald's going bankrupt, and in the event of bankruptcy, you lose all your investment. So option number one is you can invest in individual companies, like McDonald's, and now you can get a share of the profits of McDonald's. Option number two-you can buy a fund. A fund may include an ETF, a mutual fund, or an index fund.
All three are very similar in the sense that you are buying a basket of stocks. So if you bought a fund, for example, one example is the S &P 500-that's a group of the 500 largest companies in the stock market. This fund includes companies like McDonald's. It includes companies like Apple. It includes companies like Coca-Cola. It includes companies like Meta, which is Facebook, and hundreds of other companies. Now, you buy one share of the fund and get access to all of these 500 companies. And this is where it gets really interesting, because if McDonald's does really well and they take over the world, you get that profit, but it might be balanced by some losers.
Here, if you bought shares of only McDonald's, and McDonald's is doing great, McDonald's is in every corner of the world, and their profits are growing, then you will make a lot of money because you only own that company. But there's also more risk here, because if McDonald's goes bankrupt, you lose everything. And here, if McDonald's goes bankrupt, the fund will eliminate McDonald's and replace it with something else, and you won't have to do anything. So, when you buy a fund, it is managed by someone or something else. And I say "something" because if it's a passive fund, it can be managed by a computer. But now you don't have to worry about managing your investments, you just buy the fund and let it work. When you invest in stocks,
you have more potential for growth, but also more risk. But now that you decide, "Okay, I want to spend less time, I just want to invest in funds or in individual companies," the next thing to think about is, "Where should I invest my money?" Should you think about growth, income, or capital preservation? Let me explain this very simply. Typically, when you think of capital preservation, it's a person who has already accumulated money for wealth. This is a person who says, "I don't want to take any more risks because my capital is already built." I just don't want to lose it now. My goal is not to increase money. I just want them to keep up with inflation and not depreciate during market crashes. This is the main goal of an investor who cares about preserving
capital. These are usually wealthier, richer people who simply don't want to lose their money to a market crash. Today I will not talk about capital preservation. This is a completely different topic. So I will focus on growth or income, because that is where you can decide what is best for you as an investor. Do you want more risk with more potential growth or do you want more income as a way to invest your money? Both options can work, but you need to know exactly how. Everyone I talk to has a business idea. But almost no one has anything to show. And usually the reason is not money, but the time and effort required to implement your idea. But now, thanks to my
sponsor GoDaddy and their AI Builder, you can bring your business ideas to life in minutes. It works like this: you tell AI Builder what business you want to create, and it builds a website for you. Take a look for yourself. You just tap the microphone and say what you want to create. A website for home bakers that accepts individual cake orders, with a photo gallery and order form. That's all. I don't have to write a single line of code. I don't need to deal with developers. I don't need to update any templates. Now the site is ready. And while I was doing my thing, AI Builder created my site, and now, let's say, I want to change it. I want to change it to a blue theme, which suits
my mood a little better. Now I tell him what I want and he updates the theme to blue. Also, if there's a website or business that inspires you, you just take the URL, paste it in there, and say, "Make me a website like this." This way, you can use your ideas for inspiration and create any website you need. And if, like me, you have a lot of different ideas that you're constantly thinking about, you can just implement them one by one. So now you can go about your business and these pages will be created one after the other. And the best part is, since you use GoDaddy, you also get hosting, security, and a subdomain included. Of course, running a business is much more complicated, but to help you take the first step, GoDaddy's AI Builder can make
So, if you want to learn more and try it yourself, all you have to do is scan the QR code on this page or use my link in the description below. This way you can get 50 free AI credits to start creating. The stock market has grown by an average of 10% per year over the last century. So when you invest in growth, the idea is that you want to grow faster than the market average. Let's say you can grow by 13% per year, which is slightly better than the market average. If you invest $500 a month for 30 years and can earn that 13% average return, that means you will retire with about $ 1.75 million in capital. And if you're thinking, "Well, Jaspreet, how do I create an income so I can quit my job?" Hold on to this thought. I'll get to that in a minute.
If you were an income investor, the numbers would look a little different. If you are an income investor, let's now assume that the value of your investments increases with the market. It grows at 10% per year, which means you invest $500 per month and that investment value will grow to about $1 million. When you first look at this, you say, "Well, Jaspreet, $1.75 million is better than that, so this growth rate is better." But this is not the complete picture. Remember, as an income investor, your goal is to generate regular income. Here we only talked about the growth in the value of investments. We have not considered any income you might receive. As a growth investor, you will likely not receive income, as
many such companies do not want to pay dividends, as they seek to retain them in order to grow bigger and faster. So let's see what happens now if these companies pay some dividends for 30 years and work to increase the cash flow they bring you. How do the numbers change? Let's say your dividend portfolio pays 4% annually, meaning for every $100 invested, you receive $4 in cash flow per year. Nothing extraordinary. But here's where the fun begins, because I'm going to assume that you're investing in companies with steady growth that not only grow by an average of 10% per year, but also increase their dividend payout by about 10% annually. Yes, it is possible, and you see it all the time in successful dividend companies, where they grow profits, and then
the size of their dividend payments. In this scenario, according to the math, you also receive an additional $350,000 in dividends over 30 years in passive income from owning these investments, which is additional money for you. But that's not all. What if you took that $350,000 over 30 years and instead of spending it, you simply reinvested it in those stocks? So, every time you get a dividend, you just buy more shares with it. You simply buy more assets that bring you more cash flow. How would everything change then? If during those 30 years, every time you received dividends, you simply reinvested them in buying more of these funds.
It's like a machine that prints money for you, and you buy even more of what prints it. You've been doing this for 30 years. Now you will have more than just a $1 million investment portfolio. It will cost a little over $2.2 million, and the best part is that you will get a little over $80,000 in cash flow because you have built this machine that you have continuously reinvested money into. So, with this dividend reinvestment program, you might only have a million dollar portfolio, but because you kept investing in it, it grows. It's worth $2.2 million and it's making $80,000 a year right now because you took that $350,000 that you would have received in dividends without reinvestment, but because of the reinvestment, you've
received more dividends because each year you have more stocks that pay more dividends, and now your $ 2.2 million portfolio is making you $80,000 a year. That's why it's important. Now, when you compare this to the growth rate, you will see that here you have no income at all, or if you do have it, it is very insignificant. So, if you want to turn this into an income portfolio, you'll have to take that $1.75 million and buy dividend-paying stocks. And if you take those funds and invest them in the same stocks that yield 4% per annum, you will receive less money as income. In this case, if you took the entire $1.75 million and bought the same dividend fund paying 4% per year, you would receive $70,000 in income per year. So you have a smaller
capital stock, a smaller portfolio of assets, but also a lower income. But the situation may change here, as I have made a few assumptions. I assumed that your assets grow at 13 % per year and your dividends grow at 10% per year. If you can increase this figure to, for example, 14, 15, or 16% per year, then you will have significantly more wealth and, possibly, a higher income. If you don't invest in good dividend funds that don't grow, your capital will also decrease. And this is where you have to decide what game you want to play? Do you want to play this game, that game, or a hybrid of both? I can't decide for you, but I want to show you how to think, because the whole point is how fast you multiply your money as a growth investor, or how fast
your dividends grow as a investor. And in the end, it all comes down to smart investments, because while your wealth is only growing, you won't be able to have a current income, and to get out of a job, you need money coming in constantly. The mistake that many people make is that they simply assume: if I have this $1.75 million, I can just live on it. You definitely can, but the problem is that once you start spending money, the amount decreases, because after spending $100,000, you will only have $1.65 million left. And then if you spend another $100,000, you'll only have $1.55 million left. And this money may eventually be reduced to zero.
Instead, if you own an investment that earns you income whether the markets are up or down, you have money to spend without having to sell your assets. This is a profitable strategy because you don't have to worry about your investment disappearing because you own an asset that provides cash flow. And once you have enough cash flow to cover your expenses, you can quit your job. Now you need to decide what income level you are talking about? Is that $80,000 a year? Is that $40,000 a year? Is that $400,000 a year? Knowing this figure, you can calculate how much capital you actually need and what return is needed to achieve this goal. This shows you
the math of what might be the best investment for you. Personally, I prefer income. This is where most of my investments are directed. I'm not saying I don't invest in growth. I certainly invest in growth, but that's only part of my investment. But I do it too. It's just a smaller fraction. At my company, Briefs Finance, our head of investment research focuses primarily on growth. This is more of a secondary concern for him because he likes the idea of finding greater profitability. It's more interesting for him. This is his job, and it has brought success to him and our firm. Now that you understand that, let me talk about the different types of investments you should consider. Again, I'm not here to tell you
exactly where to invest your money. I'm just a regular person on YouTube. Investing involves risks. You are never guaranteed to make a profit when you invest. In fact, sooner or later you will lose money. So always do your own analysis and never blindly trust a random guy on YouTube. However, let me give you a few examples that you can consider to start thinking like an investor. Let's start with income, and I'll focus on ETFs. The first type of ETF you can invest in gives you access to stable American companies that also work to pay high dividends. The idea is that you invest in strong companies that are growing and at the same time increasing their dividends. So, I will give a few
examples. The first-NOBL, Noble. This is an ETF that allows you to invest in the " dividend aristocrats" of the S&P 500 index. This means, first, that you must be part of the S& P 500, that is, one of the 500 largest companies on the stock market. Second, you must be a "dividend aristocrat": this means not only paying dividends, but also that you must pay and increase them every year for at least the last 25 years. So, if you are in the S&P 500 and are a Dividend Aristocrat, you qualify for NOBL. This is a very small proportion of companies, but the idea is that you get a set of very reliable businesses. So these are not the highest profits, but they are stable. The second is SCHD. For the sake of transparency, I will state: I personally
invest in SCHD. This is a fund from Schwab that invests in strong American companies. The requirements here are not as strict as those at NOBL, but these companies have also been paying and increasing their dividends for many years. So he looks for growing companies, it's just that the criteria are not as strict as NOBL's. And VIG is a fund from Vanguard that also looks for reliable dividend-paying companies here in the United States. At the time of this video recording, NOBL pays 2% annual dividends, SCHD pays 3% annual dividends, and VIG pays about 1.5% annual dividends. The second way to invest in dividends is by investing in REITs. A REIT is a real estate investment trust where you invest in a company that in turn invests in real estate.
The principle of real estate investing is that you purchase properties, usually to generate cash flow. You buy an apartment building, the tenants pay rent, which covers all maintenance costs, and you get some profit in your pocket. Instead of buying real estate yourself, an alternative is to invest in a REIT, which is essentially real estate through the stock market. The advantage of a REIT is that you don't have to manage the property yourself. In addition, there is the so-called " 90% rule", according to which such trusts are obliged to pay 90% of their profits, taxable income, to investors in the form of dividends.
Therefore, you will typically see higher dividends from such REIT companies. The idea is that they work solely to generate cash flow and then pay it out to investors. So, if you want to invest in real estate, this is one way to do it. Example number one-VNQ. This is a fund that will provide you with access to the broad real estate market through the Vanguard real estate fund. Or option number two-SCHH from Schwab. This is a fund that also gives you access to the broad real estate market, the It will also give you access to these REITs. At the time of this video, VNQ pays a dividend of 3.6 % per annum, and SCHH pays a dividend of 2.8% per annum. Now let's move on to international funds.
The idea is that you can diversify outside of the US economy by investing in economies that are not necessarily as well-known or developed as the US, but now it's not just these companies that are looking to grow, but countries as a whole. So, there are more risks here, but also usually higher dividends. Let me give you a few examples. Number one is VYMI. As a disclosure: I personally invested in VYMI, as well as SCHD. This is a fund created by Vanguard that provides access to international companies that pay dividends. At the time of this video recording, it pays a dividend yield of about 3.4 %. And example number two is Schwab International Dividend Fund, SCHY. It provides access to their version of international. At the time of this video, they pay about 3.3
% per year in dividends. Again, this is just a starting point. Next, you should analyze what kind of stocks are here. Is this the industry you want to invest in? Which industries do you think will show the most growth over the next 10, 20, 30 years? This way, you will see not only an increase in the value of your portfolio, but also a further increase in dividends. And the more dividend growth you see, the more shares you will own and the more income you will receive, allowing you to spend more freely and not have to work because you have built this income stream. Now let's change the subject and talk about different examples of growth so you can start thinking like an investor. By the way, I have prepared a free guide called ABB, "Always Buy: How
to Find Opportunities in Any Market." So, if you want to learn how to find opportunities in the stock market, I highly recommend reading this guide. It's free. All you have to do is subscribe and you will be added to Market Briefs, my free newsletter for investors. So, if you want to get a copy of this guide and Market Briefs, I've left a link for you in the description below. The first way to do this through funds, rather than individual companies, is to invest in the Nasdaq 100. The Nasdaq 100 is a group of the 100 largest companies on the stock market that are not in the financial sector.
These are mostly technology companies, the better -known and larger technology players. Currently, these are the fastest growing and most innovative companies on the market. So, if you believe that technology will be a big part of the future , this is one way to access that growth. Just understand that it will be more volatile, because investments in growth are accompanied by greater fluctuations: they can both grow rapidly and fall just as quickly, and much faster than investments in value assets. So, before investing in growth, realize that volatility is a bigger risk here. You will see more up and down movements.
One example of gaining access to the NASDAQ 100 is QQQ. This is probably one of the most popular ways to gain access to the NASDAQ 100, giving you exposure to the 100 largest non-financial companies. Example number two-gaining access to the artificial intelligence and semiconductor industries. I think everyone knows how important artificial intelligence is, and it's not going anywhere, even though people are talking about a "bubble." It doesn't matter. It may be 100% a bubble, but artificial intelligence will not disappear even after it collapses. Semiconductors are the chips that power all computers and artificial intelligence. So if you want to get exposure to AI and understand the risks, volatility, and
valuations, there are funds that can give you exposure to the AI and semiconductor industries. For example, SMH. This is an ETF created by VanEck. It provides access to semiconductor companies, which gives you access to the artificial intelligence industry. We also have XLK. This is an ETF created by State Street. It will also provide you with exposure to the broader tech industry, giving you access to the fields of AI and semiconductors. And there are other small-cap companies. These are smaller companies that are more agile, working towards faster growth, and aiming to capture a larger market share. Because they are smaller, there is a higher risk that they could fail and go bankrupt. But the idea is that you invest in these companies that are trying to grow
faster, and because of that they can increase their market share. But there's more risk because, well, we don't know exactly what will happen to them. So, if you want to gain exposure to small-cap companies in the broad sense, one example is IWM. This is a fund created by iShares. It will give you access to the Russell 2000 index, which is a group of small-cap companies. Just a group of small- cap companies here in the United States. And there is also the VB fund. This is a fund created by Vanguard. It is also focused solely on providing access to small-cap companies. And finally, and perhaps most importantly, what I want you to understand is: sometimes you have a strategy, but the opportunities lie elsewhere. I want you as an investor to think
about this, because sometimes you go through market cycles. During these cycles, when markets are falling, you can see opportunities for income and growth, because when markets are crashing, you can buy growth stocks or dividend stocks at a huge discount. On the other hand, sometimes you can find what I call a market shift. You will find an industry that has not received enough attention. And now it will become a new opportunity, as a lot of capital is being directed there. AI has been such a shift in recent years, as huge amounts of money have been invested in artificial intelligence, data centers, and semiconductors. When you start to notice such changes, it can be an opportunity for you to increase your capital if you can identify them in time. So,
in this video we talked about how an investor should ask the question "is this a good stock?" is not the best way to structure your investment ideas, because who are you: a growth investor, an income investor, or a capital preservation investor? A growth investor wants to see money grow quickly. An income investor wants to receive cash flow. A person seeking to preserve capital simply does not want to lose that money during a recession. And then we talked about the need to do some calculations. If your goal is to quit your job, you want to provide yourself with some income. So what is the best way to achieve this? Do you want to buy growth stocks and then switch to dividend stocks when you've accumulated enough, or buy dividend stocks now and
simply reinvest those dividends? And the answer is: well, it really depends on the circumstances. It depends on your goal and what game you want to play, as both options can work depending on the numbers. We show that if you can compound your money at 13% per year, your growth stock investment could reach $1.75 million by investing $500 per month for 30 years. As an income investor, if your money only grows 10% per year, you will only have $1 million. But if you also receive a 4% dividend that grows 10% per year, then those dividends will yield $350,000, which, together with the $1 million, is less than $1.75 million. But if you now reinvest those dividends over 30 years, that means you're buying more shares. Each share earns you more
dividends, which means you will ultimately receive significantly more payouts. So, if you reinvest the dividends for 30 years, you won't make a profit for 30 years, but after 30 years your investment portfolio will be worth $2.2 million and you'll be earning $80,000 a year, whereas if you put that $1.75 million into the same dividend fund with a 4% yield, you'd only be earning $70,000 in cash flow. But if you were to multiply your money faster than 13%, you could achieve even better results. So the question is, what game do you want to play? And there is no right answer here. It is important to simply understand what exactly you are striving for.
Once we figured that out, we discussed the different types of funds you can invest in as a growth investor. We talked about investing in the Nasdaq 100, AI, semiconductors, and small- cap companies. For income investors, we discussed how you can invest in reliable American dividend companies that consistently pay and increase their dividends. We talked about investing in REITs- real estate trusts-as well as how you can invest in international dividend assets. If this video was useful to you, the best thank you is a recommendation. If you can, please share this video with a friend, family member, colleague, or other investor. This way we can continue to spread this type of financial education.
Thank you. It's official. The Federal Reserve wants to reboot our economy, starting with the US dollar. Why? There are two major cracks in our economy right now. The first is economic growth, because our economy is not growing fast enough. I'll talk about this in more detail in a minute. The second is inflation. Because
