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00:00 I am Hussain Al-Sayed, I have been presenting the program "World Stock" on CNBC for more than 10 years
00:06 and I have been in the financial markets for more than 20 years
00:11 and I am really tired of the ads, the calls, and the videos that I receive every day
00:19 about how this person from a thousand dollars can make a fortune
00:24 with the thousands or even millions of dollars
00:29 Today we have a lot of misconceptions in the financial markets
00:35 we have imaginary things that do not exist in reality
00:42 only fake ads, Ponzi schemes, we will talk about them
00:48 but of course, for those who are interested in investing today
00:51 and how to start investing
00:54 this will be the title of the first episode with me, Hussain Al-Sayed
00:59 "World Stock"
01:11 I have 10,000 dollars in the bank
01:15 I have been in this bank for about 3 years and I don't know what I want to do with it
01:22 I get this question almost daily
01:27 I don't know what I want to do with this money
01:30 I could put it in the bank, in my safe, or even under the bed
01:36 What should I do with this money?
01:39 My friends told me that they invested in Tesla for about 10 years
01:43 and they have 25,000 dollars, or Apple, or Bitcoin
01:49 There are many stories and many of them I don't know where to start in the world of investment
01:56 I will take you step by step where to start
02:00 Before we talk about investment, let's think for a moment
02:05 What happens to this money that we put in the bank or even at home?
02:13 Imagine that if we go back to the year 1970
02:18 A cup of coffee was worth about 25 cents
02:26 After 10 years, its value increased to 50 cents
02:31 Today, in 2023, it is worth more than 2 dollars
02:37 This means that if I buy a cup of coffee every year, its value increases by 4%
02:43 This means that the money you have at home is losing its value every year by 4%
02:52 Today, this is simply an economic concept
02:55 We talk about it daily in the Arabic CNBC, which is inflation
03:00 So, whenever your money is in a place where it is not invested, it is losing its value
03:07 How can I stop this loss that happens every year because of inflation?
03:14 I may have a savings account or a deposit in the bank where I can deposit this money
03:23 The question today is, do I have any savings account or deposit that can give me safely, without any risk, the same inflation rate?
03:36 If we want to search in banks after the pandemic, the interest rates have increased significantly
03:43 If you go to any bank and you want to deposit a deposit in the bank or a savings account
03:51 It may give you 2%, 2.5%, 1.5%
03:55 This is far from the inflation rate today, which is 4%, 5%, 6% or more depending on where you live
04:06 You may say that in Turkey, it gives 17%, 18%, and in Egypt, it gives 20%
04:14 Yes, it is true that banks are giving benefits to deposits, but let's look at how much money is losing every time
04:25 In fact, inflation is much higher than these levels
04:29 Money is losing its value in a greater way
04:33 For example, in Lebanon, before 2019, the interest rates reached 20% on the dollar
04:40 Unfortunately, this money was evaporated
04:43 How can we save money today?
04:46 Let's say I have an assumption account that can give me 10% as a savings account, 10% annual return
04:56 If I deposit 100 dollars in this account today, the next year it will be 110 dollars, the next year it will be 121 dollars, the next year it will be 133 dollars
05:08 If we take a period of 10 years, it will be about 260 dollars
05:13 Of course, this is the compounding interest rates
05:18 Does this account exist?
05:21 Of course not
05:22 Anyone who tells you that I have an investment that will give you 10% annual return without risk
05:31 Especially when we talk about hard currencies like dollars or euros, you can say that this is a Ponzi scheme
05:40 What is investment?
05:43 Let's take the most traditional investments
05:47 It is the purchase of real estate
05:50 Any real estate can be purchased, how can we calculate the return on investment?
05:54 There are two ways, the first return is from the rent if you rented this house
06:01 The second return is from the increase in the price of the property
06:04 Historically, as we know, the price of the property will increase
06:09 If we take a period of 10, 20, 30 years, the rate is about 10% of the rent return plus the price increase
06:21 Of course, this depends on where you are
06:24 But it is not a simple matter, investment in real estate
06:28 First, you need a large amount of money
06:31 If you have a certain amount of money, you need to pay it as a first payment
06:35 You need to search for a loan, maintain the house, rent the house
06:39 Is there a tenant? Is there no tenant?
06:42 It is not a simple process
06:44 But what is the closest to investment in real estate in the same economic benefit?
06:54 Of course, it is the shares
06:56 This topic also takes us to the shares
07:00 What are these shares?
07:02 We talked about the account that does not exist today
07:06 Which gives you 10% annual return
07:09 We can consider that the shares are close to this virtual account that gives us 10% return
07:16 Especially if we talk about the long term
07:20 Today, when you buy a share, you become a shareholder in this company
07:29 Of course, you cannot go to the company and change the management
07:32 Because you will have a very small amount
07:35 If you want to own 1% of Apple, you need 30 billion dollars
07:40 Do not think of going to the company and changing the management
07:44 Unless you own 5% or 10% of the shares of this company
07:48 If you become a shareholder, you get distributions
07:53 If this company has high profits
07:56 If you have a level of cash that you do not need
08:00 You can distribute it
08:02 You have a return from the distribution and a return from the price of the share
08:09 If we take a long term view
08:12 We look at the S&P 500 index in the United States
08:15 The largest 500 company in the United States
08:17 The price of the shares rose 10% over the past 20 or 30 years
08:23 How can I decide today which shares I want to buy?
08:28 Of course, it is not that simple
08:31 You have to understand the financial rules
08:35 The results of the companies
08:37 Attempt to read the future for this company
08:41 Management of this company
08:44 Financial concepts you need
08:48 All this so that you can know which share to buy and put in your wallet
08:55 What is the alternative if things are complicated?
09:00 Today we have what is called investment books
09:05 And we have indexes
09:08 These products have come to make life easier for us
09:13 And for people who are not in the economy
09:17 In the stock markets, in the financial markets, and in the bonds markets
09:21 What are ETFs?
09:25 Today you have the S&P 500 index in the United States
09:31 This index is the largest 500 companies in the United States
09:36 Under one index
09:39 Among them are companies like Apple, Amazon, Tesla, etc.
09:44 Today, to invest in all these companies
09:49 I need a lot of money
09:52 On the other hand, today we have stock management companies
09:56 They have books that follow the S&P 500
10:00 So instead of investing in these companies
10:02 You can only invest in this box
10:05 Like Vanguard, BlackRock, State Street
10:08 These are the largest companies today in stock management in the world
10:12 And you can buy the books through them
10:15 Of course, through your means that you will start trading and investing with
10:20 Why is this type of investment important?
10:23 Because it gives you the diversity of the portfolio
10:26 You do not have specific risks in certain companies
10:30 Of course, there are risks
10:32 But the more diverse the portfolio is, the more shares you have
10:35 The more risks you have
10:38 We also have different investment books
10:43 Other than the S&P 500, or the Russell, or the Dow Jones
10:47 We also have books called "Targeted Retirement Funds"
10:52 Meaning, you want to invest for 20, 30, 40, 10, or 5 years
11:00 Today you have a book that tells you how much you need to invest
11:04 The period of time, and you put your money in these books
11:09 But, isn't investment also full of risks?
11:16 Of course, there are risks in investment
11:20 Today I hear stories, and we all hear these stories
11:24 That someone made an investment in the stock market and lost a million dollars
11:31 Or our neighbor's son had investments in the stock market
11:35 And he had to sell his house, his car, and his wife
11:42 And he became a "iron man" because of the investment in the stock market
11:46 First, we have to differentiate between investment and trading
11:54 I am not against trading at all
11:57 Of course, we will leave this topic for another episode
12:01 But, the world of investment is different from the world of trading
12:05 Is it possible that stocks lose all their value?
12:14 It is a possible theory
12:16 All companies may lose all their value
12:21 But, if these companies lose all their value
12:27 I think the last thing you will worry about is your investment
12:32 Because there will be a much bigger disaster in this world
12:37 In the global crisis, the stock market has also receded by 50%
12:42 After 6-7 years, this loss has returned
12:45 In the pandemic, we saw a decline of about 35-40%
12:49 But it took less than a year to recover this loss
12:54 Especially in the US markets
12:57 Of course, the markets are fluctuating
13:01 Therefore, any investment you make in this type of market
13:05 Should be long-term, not short-term
13:09 When should I start investing?
13:12 This question is asked to us every day
13:16 And my answer to you is that you should start yesterday before today
13:22 The earlier you start, the more you benefit from these factors
13:31 Why should we start investing early?
13:34 Or the earlier we start, the more we benefit?
13:38 Let's think about it this way
13:42 If I have 10 years to invest
13:49 If I reach the first million
13:52 I really need $4,900 per month
13:58 With a 10% return to achieve the goal of $1 million
14:04 But if I have about 20 years
14:08 With a 10% return, I only need $1,300 per month
14:16 If I start investing in the 30s
14:20 And I have about 30 years
14:23 This amount will decrease to $440 per month
14:27 If I have just started my career
14:33 I graduated from college
14:35 I only need $160 per 40 years
14:39 To reach the goal of $1 million
14:44 So the earlier you start, the less you invest
14:51 And of course you have more leeway
14:56 But before you start investing
14:58 I always have advice to have an emergency account
15:04 This account can be used in difficult circumstances
15:08 For example, you have a health problem, a family problem
15:14 You should have an emergency account that can help you
15:17 Between 3 to 6 months or a year if you are unpaid
15:23 You should not have personal loans or credit cards
15:32 To get rid of these loans before you start investing
15:36 So after you finish these things
15:40 You can start your journey of investment
15:44 And your journey to the first million
15:47 So how should we start in the world of investment?
15:51 We have a Google search engine
15:55 We ask Google who is here with me
15:58 Simply millions of users
16:01 They give us products like ETFs
16:06 Mutual funds
16:09 And it can be inside or outside the country
16:13 It is not a condition to be inside the country
16:16 On the other hand, the cost should be low
16:21 Because we have today medium companies
16:25 They have a very high cost
16:27 So no investment in this box should cost you more than 1% every year
16:34 And the most important point
16:36 When you start in your world of investment
16:39 Try not to interfere
16:43 You know what is the safe you want to invest in
16:47 And leave it grow over a long period of time
16:50 Because we have people today
16:52 Every day they want to look at their investments
16:54 What is happening in it
16:55 This forces them to invest, buy and sell
16:57 And we have become a trading
16:59 No, we are talking here about long-term investment
17:02 So not to interfere in this investment
17:05 It has proven to give more returns over a long period of time
17:11 How to start in the world of investment
17:13 Our title was our first episode
17:15 And God willing, we will see you in the next episodes
17:18 With all the things that concern you in your financial world
17:21 I am Hassan Al-Sayyed
17:24 [Music]