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00:00What's the best way for beginners
00:01to start investing online with just $100?
00:04As a millionaire investor,
00:06this is something I get asked all the time.
00:08And because of that, four years ago,
00:10I set out to answer this question by creating a video
00:14where I invested $100 into five different things.
00:18Today, I'm gonna compare the results
00:20from those five investments
00:21that you can make from your laptop
00:22and try to finally answer the question once and for all.
00:26We're gonna be using this grid
00:27to judge each one in these categories.
00:29First up, learning curve.
00:31This is how long it takes
00:32to learn the ins and outs of each method.
00:34Ideally, we want this to be as short as possible.
00:37Next is passive income potential,
00:40which is how much money an investment
00:42can earn for you passively while you still own it,
00:44without needing to sell it.
00:46Then there's tax efficiency,
00:48which refers to the specific tax advantages
00:50or benefits available for each type of investment
00:54that can help you pay less tax.
00:56After that, we have risk level,
00:58which is about how likely you are to lose money
01:01and how much the investments value might go up or down.
01:04And finally, we're looking at the results.
01:07This is where I'll reveal my percentage return
01:09over the last four years
01:11and exactly how much my $100 investment is now worth.
01:14Before we jump in, please remember,
01:16I'm not a financial advisor.
01:18I'm just sharing my own results and strategies
01:20that have worked for me over the years.
01:22Please also do your own research.
01:28Okay, first up is individual stocks.
01:31Individual stocks give you the chance
01:33to own a piece of a company you believe in.
01:35This can be really exciting
01:36because you're directly investing in businesses
01:39that you think will grow or succeed.
01:41For learning curve, I'm gonna say this is high.
01:44If you want to be successful picking individual stocks,
01:47then it's not just a guessing game.
01:48You'll need to dig into the nitty gritty
01:50of a company's fundamentals.
01:52This includes looking into the financials,
01:54who's leading the company and how well known the brand is.
01:58When I invest in individual stocks,
02:00I look through income statements, balance sheets
02:02and cash flow statements.
02:03So when I invest in a stock, I'm in it for the long haul,
02:07which means at least two to 10 years.
02:09A great way to learn how to do this
02:11is by using an investing app with a demo account,
02:14which lets you play around with fake money
02:16until you're confident with your strategies.
02:18For passive income potential, I'm gonna say this is good.
02:23You see, when you own a stock,
02:25there are two ways you can make money.
02:27Firstly, if the price of the stock goes up
02:29during the time you own it,
02:30you can sell it for more than you paid.
02:33Secondly, you can receive dividends.
02:35Dividends are regular payments to shareholders.
02:38Not all stocks pay dividends, but if they do,
02:40this means you can receive money
02:42without ever selling your stock.
02:43This is essentially passive income.
02:46Now for tax efficiency, this is great.
02:50If you use the right accounts,
02:51then you can reduce your tax burden.
02:53In the UK, these are called stocks and shares ISAs.
02:57You can set one up on most investing apps
02:59and any profits you make are safe from taxes.
03:02In the USA, there's something similar called a Roth IRA.
03:05These accounts work like a shield,
03:07protecting your profits from the tax man.
03:09While there are different rules
03:10depending on where you live, the idea is the same.
03:13Please bear in mind that I'm not a tax advisor
03:15and you should do your own research
03:17as everyone's circumstances are different.
03:19So what's the risk?
03:20This is definitely high.
03:23Back in 1995, during the dot-com boom,
03:26I got lucky and picked a few great stocks.
03:28I sold them at the right time
03:30and made a lot of money in a short period.
03:32But when the bubble burst,
03:34some of the other companies I'd invested in,
03:36ones that cost me very little,
03:38went out of business completely,
03:39even though I ended up making money overall.
03:42It just shows how risky investing
03:44in individual stocks can be,
03:46especially if you put all your money
03:48into just a few companies.
03:49If they fail, you could lose everything.
03:52So let's look at how much my $100 investment is now worth.
03:56Let me refresh your memory.
03:57Here's what I invested in.
03:59So I'm going to throw a dart at the board
04:00and as you can see,
04:01I randomly selected 20 different stocks
04:04and wherever the dart lands,
04:06that's what I'm going to invest in.
04:08Now I've just got to put on a blindfold.
04:09Okay, here we go.
04:12Right, let's see what we got.
04:15And we've gone into Samsung.
04:18That investment is now worth $67.66.
04:23But don't forget my dividends.
04:25Over the four years, I made 10 cents.
04:28So that leaves me with a total of $67.76.
04:33That's a negative 32.34% return.
04:38This example perfectly shows how hit or miss individual stock investing really is.
04:43That dart could have just as easily landed on Apple, Microsoft or Nvidia.
04:48So let's have a look at how much I would have made if that dart had landed a bit differently.
04:53A $100 investment in Apple four years ago would now be worth $170.
04:59The same investment in Microsoft would be $188.
05:03And, drum roll please, Nvidia would be worth $908.
05:09Those stocks have boomed in recent years.
05:11And luckily I have some of those in my personal portfolio.
05:14But this just goes to show, you can't just leave individual stock investing down to luck.
05:20You have to be strategic with your stock picks.
05:22And even then, the market is unpredictable.
05:24If you want to try this out, just download Trading212.
05:28It's a great app for beginner investors.
05:30Because it lets you use a demo account to practice trading with fake money.
05:34This way, you can learn how it all works without risking any real cash.
05:39Just like I mentioned earlier.
05:40It also lets you set up a stocks and shares ISA if you're in the UK.
05:44Which protects your investment returns from taxes.
05:47But again, I'm not a tax advisor.
05:49So please do your own research as everyone's situation is unique.
05:53Trading212 also lets you buy fractional shares.
05:56Which means you don't have to buy a whole stock.
05:58That's how I was able to own just 0.07 of a Samsung stock.
06:03Instead of having to buy an entire share.
06:05As I was going to mention Trading212 anyway,
06:07I reached out to see if they'd be interested in sponsoring this portion of the video.
06:12They agreed and are offering a free fractional share worth up to £100 to anyone
06:17that uses the code Tilbury when they create an account.
06:19Plus you can get more free shares by inviting your friends.
06:23Both of you will get a free share as long as they fund their account.
06:26I'll leave the link in the description if you're interested.
06:31Second is a real estate investment trust.
06:35Otherwise known as a REIT.
06:37I know this one sounds pretty complicated.
06:39But it's actually quite cool.
06:41Imagine your friend collects $100 from 3,000 people.
06:45Giving him $300,000.
06:47He then uses that money to buy a property.
06:50Rents it out and shares the rental income with all 3,000 people who helped him buy it.
06:55That's a simple way to explain a REIT.
06:57It allows anyone to invest in properties without needing to buy one themselves.
07:02Think of it like you own the front door.
07:04Someone else owns a window and a few others own the bricks.
07:08Which means together everyone owns the entire property and shares in the profits.
07:13The learning curve.
07:13I'm going to say it's moderate.
07:16And that's because getting started with REITs is much easier than buying physical property.
07:21It's not like you need a huge down payment or a mortgage.
07:23And there's no need to deal with agents or solicitors.
07:27However, you do need to understand how REITs work.
07:30They own things like offices, shopping centers, apartments, hotels, and much more.
07:35And they get their income through rent.
07:37For passive income potential, I'm going to say this is great.
07:41REITs are well known for paying high dividends.
07:44This is because the law says they have to pass on at least 90% of all their profits to
07:49investors.
07:50So as long as the REIT is doing well and its properties are rented out,
07:54you can earn a steady stream of passive income.
07:56Most businesses sign long-term leases on their commercial properties.
08:00Therefore, most of the time, income is pretty stable and reliable.
08:04But of course, just keep in mind that your earnings depend on the REIT you pick,
08:08and the types of properties it owns.
08:10For tax efficiency, I'm going to put this down as great.
08:14This is because in many countries REITs offer great tax benefits.
08:18For example, in the UK, you can hold REITs in a stocks and shares ISA,
08:23which means you don't have to pay taxes on your profits or dividends.
08:27In terms of risk, I'd have to say this is medium.
08:31REITs are generally less risky than buying a single property
08:34because they invest in multiple properties spreading out the risk. However, they're not risk-free.
08:39If the real estate market takes a downturn or if the REIT struggles to keep its properties rented,
08:44you might see both a drop in dividends and the value of the investment.
08:48So what's my investment worth now?
08:50Let's flashback to me making the investment four years ago.
08:54As I'm in the UK, I'm going to use the Trading212 website to put $100 into a similar REIT.
09:00Ready for the moment of truth?
09:01Looking at my investment now, I can see it's worth $98.59.
09:06So that's a small loss of 1.41%.
09:10This shows that even though REITs are normally more stable than individual stocks,
09:14they're not guaranteed to perform well.
09:16My REIT likely underperformed because it invested in commercial real estate,
09:21which struggled during the pandemic.
09:23But that's not the end of the world as I made $11.93 back in dividends,
09:27meaning I'm actually $10.52 up. So that's 10.52% up.
09:39Third is cryptocurrency.
09:42Imagine a form of digital money that isn't controlled by any government or bank.
09:46That's what cryptocurrencies like Bitcoin and Ethereum are.
09:51These currencies run on the blockchain technology, which makes them secure, transparent,
09:55and almost impossible to counterfeit.
09:58Cryptocurrencies have created massive wealth for some people, with Bitcoin being the best
10:02performing asset of the last decade. But on the flip side, it's highly volatile,
10:08and people have also lost fortunes. That's why I'll describe crypto as part investment and part
10:13speculation and not for the faint hearted. For learning curve, I'm going to say it's moderate.
10:19Crypto might sound complicated, but I'll break it down for you. First, you'll need a wallet.
10:24This is where you store your crypto. Think of it like a digital piggy bank, and there are different
10:29types. First are online wallets. These are easy to use, but you'll need to protect them with very
10:35strong passwords. Second are offline wallets. Like hardware wallets, these are the safest because
10:42they're not connected to the internet. Next you'll need to pick an exchange to buy and sell your crypto.
10:47Some popular ones are Coinbase and Binance. These platforms make it simple to trade,
10:52but make sure to choose a trustworthy exchange to avoid any issues. Then there's tokenomics.
10:58This just means understanding how the supply and demand of a coin works. For example, Bitcoin has a
11:04limited supply, which is why it's often called digital gold. For passive income potential,
11:09I'm going to also say this is moderate. Unlike stocks or REITs, crypto doesn't pay dividends,
11:15but there are ways to earn passive income. The first is called staking. This is when you lock up your
11:21crypto like Ethereum to help the system work and process transactions. In return, you get paid rewards,
11:28kind of like earning points for helping out. The second is yield farming. This is when you lend
11:32your crypto out to others and earn interest on it, similar to how a bank pays you interest when you
11:37save money with them. These methods can generate decent returns, but they do come with higher risks.
11:43If the coin's value drops or the platform you're using gets hacked, your income could disappear along
11:49with your crypto. That's why I personally don't mess with any of this and just hold mine on a ledger
11:54wallet. For tax efficiency, I'm going to have to say this one is poor. Taxes are a tricky part of
12:01crypto investing. In many countries, even swapping one cryptocurrency for another counts as a taxable
12:07event, and if you earn staking rewards, those are also taxed as income. You also can't hold crypto in
12:13tax-advantaged accounts like ISAs or Roth IRAs, which makes it less tax efficient than stocks or REITs.
12:20In terms of risk, I'd have to say it's very high. Crypto is one of the most volatile investments out
12:26there.
12:27Prices can soar a thousand percent in a year, but they can also crash just as fast. Personally,
12:32I just invest in Bitcoin and Ethereum. As they're more established and often referred to as blue chip
12:38cryptocurrencies, smaller altcoins can be far more risky. You've also got to be cautious of scams.
12:44Since crypto isn't regulated, if someone hacks your wallet or tricks you into sending your coins,
12:50there's no way to get them back. So keeping your crypto safe is just as important as learning how to
12:56invest in it. So what's my investment worth now? Let's rewind to when I made this investment four
13:01years ago. So I'm going to jump onto the most popular Bitcoin app, which is called Coinbase,
13:06and invest my $100 in Bitcoin and forget about it. Ready for the reveal? The $100 I invested in Bitcoin
13:14is
13:14now worth $652.24. That's a return of 552.24%. Now, I know what you're thinking, that's insane,
13:27and it is, but I have to stress that this kind of growth is not typical. Bitcoin has been the
13:32best
13:33performing asset of the last decade, but most cryptocurrencies don't see these kinds of returns.
13:38Many lose their value entirely. In my opinion, crypto is exciting, and the technology behind it has the
13:45potential to transform industries. However, it's not for everyone. It's highly volatile, speculative,
13:52and requires a strong stomach to handle the wild price swings. Just remember, crypto is all about high
13:57risk and high reward. So if you're going to dive in, make sure you're doing your research and investing wisely.
14:07Fourth is gold. This is one of the oldest and most trusted ways to store and protect wealth.
14:14Gold is often called a safe haven because it's a great way to protect your wealth during uncertain
14:19times, like when inflation is rising or the economy is struggling. For learning curve, I'm going to have
14:26to say it's low. Learning how to invest in gold is pretty simple. You have two main options. First,
14:32physical gold. This includes gold bars and coins. Many people also think you can buy gold jewelry as
14:39investments, but you'll often pay more than the gold is actually worth because sellers had a markup for
14:44their craftsmanship. For this reason, I personally stick to gold coins. Just bear in mind, if you pick
14:50this option, then you'd have to store it somewhere safe. Second is gold ETFs. These are funds that let you
14:56invest in gold without physically owning it. For example, in the UK, you can use Trading212 to buy
15:03shares in something like the iShares Physical Gold ETF. It's quick, easy, and you can buy or sell it with
15:09just a few clicks. Passive income potential is absolutely zero. Unlike stocks, REITs, or crypto,
15:18gold doesn't pay any passive income. It's not an income generating asset. It's purely a store of value.
15:24For tax efficiency, I'm going to put this as good. If you buy physical gold like gold coins or bars,
15:31the tax rules can be a little tricky. For example, in some countries, certain gold coins like the UK's
15:37gold Britannias are considered legal tender, which means you don't pay capital gains tax when you sell
15:43them. However, this doesn't apply to all gold coins or bars, so you'll need to check the specific
15:49rules in your country. For gold ETFs, they're generally more straightforward. In countries like
15:54the UK, you can hold them in a stocks and shares ISA, which makes any profits completely tax-free.
16:00Interestingly, physical gold has another unique advantage. It can be used to transport wealth
16:06across borders discreetly. That said, this approach comes with risk, such as theft or legal restrictions on
16:13transporting large amounts of gold across borders. While it's not something I'd necessarily recommend,
16:18it's worth mentioning as a unique aspect of owning physical gold. In terms of risk,
16:24I'd say this is a medium. Gold is one of the safest investments you can make. It's been used as
16:30a form
16:30of money for thousands of years, and it's known to hold its value during times of inflation or economic
16:36uncertainty. However, the opportunity cost of investing in gold can be a downside. While it's
16:42great for protecting your wealth, it doesn't have the same growth potential as other investments like
16:47stocks or crypto. So what's my investment worth now? Let's flash back to when I made this investment
16:53four years ago. I'm going to invest using Trading212 in a similar share, and with just a click of a
16:59button, there you go, I'm now Mr. Goldman. So what's Mr. Goldman's investment worth to take? Well, it's
17:06currently sitting at $140.10. That's a return of 40.1%. Now, that's not as exciting as Bitcoin's
17:16performance, but it's solid, steady growth. This shows how gold is better for protecting your wealth,
17:22rather than rapidly growing it. Fifth, is index funds. Imagine owning a tiny piece of the largest
17:32companies like Apple, Microsoft, and Amazon all at once. That's exactly what an index fund allows you
17:38to do. It's a basket of stocks that mirrors the performance of a specific index like the S&P 500.
17:45So you're investing in the overall market rather than betting on individual companies. For learning
17:51curve, I'm going to have to say this one is low. Unlike individual stocks where you need to dig into
17:56the financial statements and company performance, index funds are passive investments. You don't
18:02have to pick and choose stocks as they're already bundled together for you. Getting started is simple
18:07too. Platforms like Trading212 let you buy index funds with just a few clicks. Once you've invested,
18:15all you need to do is sit back and let the market do the work. For passive income potential,
18:20I'm going to say this is moderate. Index funds don't directly pay high dividends like REITs,
18:26but they still provide some income. Many companies in the fund pay dividends and those are
18:31automatically distributed to you or reinvested back into the fund depending on your choice.
18:37While the main focus of index funds is long-term growth, the dividend income can be a nice bonus,
18:43especially if you're investing in funds that focus on dividend paying companies. For tax efficiency,
18:48I'm going to say this one is great. If you hold index funds in a stocks and shares ISA in
18:54the UK
18:54or a Roth IRA in the USA, you can avoid paying taxes on dividends and capital gains altogether.
19:01This means you get to keep more of your profits over time, which can make a huge difference when
19:06you're investing for the long haul. In terms of risks, I'd say it's pretty low. Index funds are much less
19:13risky than investing in individual stocks because they're diversified. Instead of putting all your money
19:18into a few companies, you're spreading it across hundreds or even thousands of stocks in different
19:24industries. Historically, the S&P 500 has delivered average annual returns of around 8% to 10% over the
19:31long term. While the market can go up and down in the short term, if you hold onto an index
19:36fund for 10,
19:3720 or even 30 years, it's one of the safest ways to grow your wealth. However, of course, there are
19:43still
19:44risks like with any investment. So what's my investment worth now? Let's rewind to when I made this
19:50investment four years ago. If we head over to Vanguard's website now and we find the S&P 500 and
19:56deposit some money and then click, there you go, job done. Right, so time for the reveal. Today, that investment
20:03is worth $179.57. That's a return of 79.57%. This result shows why index funds are
20:13such a great option for most investors. They're simple, low cost and consistently deliver solid
20:19returns over time. Personally, index funds are my favorite investment, which is why I've allocated the
20:26majority of my money there. However, I also understand the importance of diversification.
20:32So I spread smaller percentages across all the other investments we've discussed today. This way,
20:37I can balance growth, stability and risk in my portfolio. So whether you're diving into individual
20:43stocks, buying some REITs, exploring crypto, getting into gold or sticking with the steady
20:49reliability of index funds, each investment has its pros and cons. Some are better for growing your
20:55wealth quickly, while others are designed to protect it over the long term. The most important lesson
21:00is to start early. Even small amounts like the $100 we've been working with can grow into something
21:07significant thanks to the power of compounding. Time is your best friend when it comes to investing,
21:12so don't wait to get started. If you want to know what the laziest way to make money online is,
21:17then I'm going to leave that video right up there. But don't click on it just yet,
21:21make sure to subscribe if you want to grow your wealth, okay? I'll see you over there.
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