HOW TO INVEST $1000 in 2019 πŸ’΅ How I Invested My First 1000


hey YouTube I’m Jimmy so in this video I
want to talk about what I would invest in if I had a 1000 dollars to start
investing and I was just beginning out then at the end of the video I want to
talk about some things I do with my investments now that I wish I’d known
when I had first started that could help juice up my returns a bit okay so know
funny enough there’s actually a right way and a wrong way to start investing
and when I was prepping for this video I went over and I watched some other
videos that tackled us a similar topic and much of them said the same thing
pay off your debt then save up and then with some excess money go out and start
investing and they’re right that’s the right way to do it but I actually didn’t
do it that way and I suppose that my spending habits early on weren’t the
best of habits and a lot of that changed for me when I first started to invest
see I actually opened my first investing account I think was a trade or TD
Ameritrade one of those I forget whichever one didn’t have a minimum
balance because I only had about 500 bucks to invest at the time and I also
had a car loan and I had $1500 or so in credit card debt well I’ve saved up this
$500 and I had every intention of paying off my credit card bills but then I
heard this story from Warren Buffett okay so the story went something like
this Buffett was just starting out or at
least he’d been doing it for just a few years and although he was a millionaire
already he wasn’t worth anything near what he’s worth today and well he comes
home one day and he sees that his wife had gone ahead and remodeled their
kitchen they she put in new countertops new cabinets and refrigerator whatever
it was and he stops and he asks her how much did this cost and I figured what
the number was was something like 10,000 20,000 30,000 something like that and
the story goes on that Buffett was annoyed and was angry that he couldn’t
understand why she would spend that much on remodeling the kitchen and he
explained that it wasn’t the $20,000 or whatever the amount was it was what he
could have done with that $20,000 and he said that hunt 20,000 could have been a
hundred thousand it could have been five hundred thousand or a million dollars
that if he had an time with that money it would have
turned into significantly more money so I put the $500 that I had in an
investment account and I could have paid off that or at least part of that credit
card debt but I didn’t instead I put the money in investing account and I start
looking for investments and I was worried about how many shares I could
buy with just a 500 so I tried to add as much money as I could as often as I
could because they were going to be commissions when I did it this is before
Robin Hood so I was going to pay a commission so if I could only invest 500
or if I could only invest a hundred or whatever it might be in any one position
I was gonna get a commission and I wanted to cut back on the impact of
those commissions on my overall investment and I put everything I could
get my hands on into Viacom I worked at New Balance at the time so I wasn’t
making a ton of money but it didn’t matter every time I got a paycheck I put
as much as I couldn’t to the investment account and the rest of the time I would
spend researching stocks and I ended up building up to just short of $1000 about
$990 and I found my first stock it was Wyeth Wyeth was a pharmaceutical company
that was eventually bought out by Pfizer now at the time I want to say that while
it shares we’re trading about $30 a share give or take I do remember that
about 20 shares so we’ll call it about to $600 now at the time I had been
reading a lot about investing and learning how to invest in about options
so at the time I thought that it made sense to go on buy an option in addition
to the shares that I bought so I bought the 20 shares and then I bought one call
option and that call option cost me about $180 and it expired in like three
months from when I had bought it now the shares were just short of $30 I think
and because I remember I had a $30 strike price well I got a little bit
lucky and Wyeth ended up moving from about $30 a share to about $38 a share
over the next two months now my 20 shares that cost me about $600 well
they’re now selling for about seven hundred and sixty dollars and my options
on the other hand well I paid about $180 for them and they were selling at about
850 dollars since it was about $8 in the money and there was still a month left
so I sold everything why did I sell then I have no idea like I said I was a
billion experience at the time I think that the stock actually continued to go
higher but I was nervous I didn’t really know what I was doing so I jumped up
so now I have about 16 her dolls in the account which is more than what I own
the credit cards so you may ask did I pay off the credit cards and the answer
is no way I was hooked I was an investor now it wasn’t a chance I was gonna take
that money out of the investment account so that’s not completely true because
over about the next year I did gradually pay off the credit card but the way I
did it none of it came from the investment account
well the way I did it is every check I got from New Balance went to either
living expenses or and I lived at home so they weren’t too bad or everything
after that I split between the investing account and paying off the credit cards
and the only reason I paid off the credit cards was because I wanted to put
more money to invest into into the investment account I couldn’t stand out
I had to make that payment so I figured let me try to get rid of it
now if I were smarter then at the time I actually would have paid attention to
what the interest rate were was but frankly I don’t even remember what it
was I didn’t pay attention to that at all all I knew is that I wanted to put
more money investing and that was the only thing that mattered not again I
paid off the credit cards just to get more money to invest now just to finish
up that story real quick my next two investments actually didn’t go so well
so I had had great success with Wyeth and the options so I figured I should
just stick with the options and actually did two different options I found one
like a week later I did another one bought a call option and then a week
later I bought a call option for a different stock I just bought one of
each I figured that with this 1,600 I could diversify spend about 150 hundred
60 60 bucks per each one I can get ten different stocks in there
well overall each one I had done about three months out and over the next month
or two I didn’t really find many other options I just had those two positions
one stock went down the other one didn’t move much I forget what the companies
were but as I sat there and watched it I realized how risky these options
actually were I was throwing away the 300 or so dollars I had invested in
these two options and then I gradually realized that that was much closer at a
gambling than it was investing the reasons I had for the stock to move over
the next three months was fairly minimal I always had the thought process of
being a long-term investor but I was only giving myself short-term
opportunities with the options so today I know a ton more about investing that I
did back then so if I were advising myself and I had
else to start with what would I do well the first thing I would do is I would
stick with ETFs this allows for there to be some built-in diversification now
this is important since I didn’t really have the money to diversify myself now I
remember at the time that I cared for some reason about the number of shares
that I bought I didn’t want to buy let’s say just three shares about three
hundred all stock so I looked at that time I looked for companies that were
trading near the twenty thirty dollar range that being said I stuck with
three etf’s here that are in the twenty dollar range that I would personally
stick with if I were doing this today now the first one is called the first
trust North America energy infrastructure fund ticker symbol EMLP
it’s got a yield of about four percent and they invest in pipeline companies
master limited partnerships utilities companies like that and I thought this was
interesting because energy commodities have been down a bit so I figured that
could make an interesting play in 2019 right now this ETFs trading at about
twenty three dollars a share the fee for this ETF is a bit high it’s almost one
percent it was ninety five basis points but for a lot of people the solid yield
helps offset some of that fee now the next ETF is more of a swing at
the future it’s called the global robotics and artificial intelligence ETF
ticker symbol BOTZ now they invest in companies that they believe will benefit
from the increased adoption and utilization of robotics and artificial intelligence
they don’t have any dividend and their fee is decent compared to EMLP add just
sixty eight basis points currently BOTZ is a trading at about eighteen dollars a
share now the last ETF I would consider is called the global X super dividend
ETF ticker symbol SDIV now as you can imagine by the name that they pay great
dividends currently the dividend yields is a bit over 8% and they paid monthly
which is nice as well they also have a lower fee compared to the other two ETFs
at about fifty eight basis points now the other thing I like about this ETF
is that their global so it helps because it adds to a more unique style of
diversification if we were to buy other ETFs that were just us-centric
it might not offer the same diversification as a global ETF
currently that ETF is trading at about 18 dollars and 50 cents a share now the
final thing that I mentioned of the start of the video about juicing up my
returns actually has to do with options each of these ETF have the options
available on them and I was careful to limit my search to ETFs that did have
options because not all not all ETFs have options available that being said I
remember when I first started investing and I had limited amount of capital to
invest I wanted to find ways to juice up my returns as much as I could now
options many times appear to be a cheap way to do it they’re a very risky way to
do it if you don’t know what you’re doing but they can’t help juice up the
returns if you do it correctly now I actually wouldn’t recommend doing when I
first did when I first started out and that is buying a call and hoping the
stock moves higher and instead what I would prefer to do is I would prefer to
let’s say write a covered call to me that’s a must much better way to juice
up your returns so in order to do that you need up you need to own a hundred
shares so for SDIV that’s going to cost you about eighteen hundred and fifty
dollars now we only have a thousand dollars so we put what we can into the
into the account we buy as many shares as we can and then the way I would do it
from there is every dividend I got I would try to reinvest in more shares
don’t forget they have an eight percent dividend anything I could add to the
account I would add to the account and buy more shares once I got to the
eighteen hundred fifty dollars I would go ahead and I would write my first
covered call now as curious what s di B’s options were going for so I went
ahead and checked and right now we could cut we could sell a covered call that
expired in about three months for about forty bucks so if you’re wondering
basically what that means is that you would sell somebody the right to buy
your shares your 100 shares at a certain price by a certain time in our case
right now the stock was going for about eighteen dot forty six cents so pretend
we had $100 we had 100 shares on our average price was $18 and forty success
we could sell a covered call with a 19 strike price giving them the option to
buy those shares from us at $19 and in return they would pass $40 today now in
theory you take that money that they paid you for the cover call and you buy
more shares and if those shares get called away from you in let’s say the
next three months well you bought it for 1846 you sell to $19 plus you get to
keep the $40 that seems like a decent move so far but if they don’t get called
away from you in three months you do it again do that four times a year and that
$40 turns into 160 to me that’s a pretty good way to add some return to
ultimately what’s call it an eighteen hundred and fifty dollar investment even
though it’s possible you get there by only putting the initial thousand in and
reinvesting those dividends now personally I like doing this for
dividend ETF and dividend stocks as well because don’t forget when a dividend
gets paid when the stock goes ex-dividend date on the ex-dividend date
the stock will drop by that amount so if pays a $0.10 dividend drops by 10
cents plays a 20 cent dividend jumps by 20 cents that’s great when you’re
selling covered calls because if you’re selling covered calls you don’t want the
stock to get above in our case $19 so if it’s getting close and that it pays a
dividend not only do you get that cash but the stock price falls slightly
lowering the percentage that that stock will get called away from you that’s the
reason with high dividend paying stocks and ETFs so much of the returns come
from dividends and not necessarily the stock moving higher so that should
increase the probability that we can keep turning over the covered calls so
to me that seems like a win-win so hopefully you found this interesting and
let me know if you’ve ever sold covered calls or what you think of the three TS
that I would be investing in today if I were just starting out and I have links
to in the description below for videos on dividends and options and besides
that let me know what you think of the comments below you haven’t done so
already hit the subscribe button and I’ll see in the next video thanks and
stick around

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