If You Have $1000 In The Bank, DO THESE 5 Things!

Name: If You Have $1000 In The Bank, DO THESE 5 Things!
Uploaded: 2021-05-02T14:30:06.000Z
Duration: 2 h 50 min 30 s

Introduction

In this video, Jaspreet Singh from minoritymindset.com talks about how to invest $1000 for passive income. He explains what passive income is and why it's important, and then goes on to provide 10 ways to start seeing passive income in your bank account.

What is Passive Income?

Passive income is earning money while you sleep.

Wealthy people spend their time building passive income streams.

You want your money working for you, not the other way around.

Investing for Passive Income

Jaspreet explains that investing for passive income can be done by investing either time or money. He also discusses the misconception that you need a lot of money to start investing for passive income.

Two Ways to Invest for Passive Income

You can invest your time into building a business that will continue to pay you even after you walk away.

You can throw your money into an investment and have other people work to grow your money and pay you.

The easier option is just throwing money at the investment, but you still need to put in the time to get that initial amount of money.

You don't need a ton of money to start investing for passive income.

Addictiveness of Passive Income

Jaspreet talks about how addictive it can be once you start investing for passive income.

How Addictive Can It Be?

Starting with $100 in passive income one year could lead to wanting $100 per month the next year, then $100 per week, then eventually $1000 per month.

Once you see the benefits of having more free time and more financial freedom, it becomes addicting.

10 Ways To Start Seeing Passive Income

Jaspreet provides 10 ways to start seeing passive income in your bank account.

7 Completely Passive Ways

Investing in dividend stocks.

Investing in real estate investment trusts (REITs).

Peer-to-peer lending.

High-yield savings accounts.

Certificates of deposit (CDs).

Creating an online course or e-book.

Renting out a room on Airbnb.

3 Semi-Passive Ways

Starting a blog or YouTube channel.

Creating and selling a physical product.

Investing in a business as a silent partner.

Passive Income through Dividend Yield

In this section, the speaker explains how passive income works through dividend yield and gives examples of companies that pay dividends.

Dividend Yield Explained

McDonald's pays a 2.4% dividend yield, which means if you deposit $1000 into the company today, you can expect to make about $24 in passive income over the next year.

IBM pays a 5.5% dividend yield, which means if you deposit $1000 into IBM over the next year, you can expect to make something like $55 in passive income.

AT&T is paying a 7% dividend yield at the time of recording this video, which means if you invest $1000 into AT&T, they will pay you about $70 in passive income over the next year.

Investing in Strong Companies

The goal with these investments is to see these companies grow so that their stock price goes up and your investment value also increases.

Consistently keep investing in strong companies to build wealth by owning a large share of a company and making money as the company makes more money.

Passive Income through REITs

In this section, the speaker explains how investing in real estate investment trusts (REITs) can generate passive income.

Real Estate Investment Trust (REIT)

REIT is a company that invests in real estate and is required by law to distribute 90% of their taxable income to shareholders through dividends.

Investing in REIT on the stock market allows investors to earn rental income without having to physically own real estate properties.

Passive Income Investing

In this section, the speaker explains how passive income investing works and gives examples of two companies that offer passive income investments.

Examples of Passive Income Investments

Simon Property Group (SPG) is a company that invests in mixed-use and major property developments throughout the United States. They pay a 6.5% annual yield on investments.

Annaly Capital Management (NLY) invests in commercial mortgage-backed securities and pays an 8.5% annual return on investments.

Risks of High Dividend Yield Stocks

High dividend yields can be deceiving because they may not reflect the financial health of the company.

It's important to analyze a company's financials and fundamentals before investing solely based on their dividend yield.

Index funds are a good option for those who don't want to analyze individual companies or don't know how to do so.

Overall, passive income investing can be a good way to earn money without actively managing properties or businesses. However, it's important to understand the risks involved and do proper research before making any investment decisions.

Passive Income Investing

In this section, the speaker discusses four ways to earn passive income through investing.

Invest in Top 500 Companies

Invest in the top 500 companies in the stock market by investing in a fund like VO or VOO.

This investment provides exposure to the top 500 companies and pays dividends of around 1.75% per year.

VNQ is a Vanguard index fund for REITs that provides exposure to real estate without having to find individual REITs.

VYM is a Vanguard index fund that invests in high dividend yielding companies.

Crowdfunded Real Estate

Crowdfunded real estate allows investors to invest directly into a fund that gives them exposure to real estate properties.

Platforms like Fundrise offer historical returns of 8-12% per year through dividends and appreciation in property value.

Investors do not have to manage tenants or pay bills, as all work is done by others.

Pseudo-Passive Income Investing

The speaker mentions pseudo-passive income investing as a way to amplify passive income investments, but does not provide further details.

Learn More About Investing

The Minority Mindset website offers articles on how to invest in stocks and passively invest money, including crowdfunded real estate.

Overall, the speaker discusses four ways of earning passive income through investing - investing in top 500 companies, investing in REITs through VNQ, investing in high dividend yielding companies through VYM, and crowdfunded real estate. The speaker also mentions pseudo-passive income investing as a way to amplify passive income investments. The Minority Mindset website offers articles on how to invest in stocks and passively invest money, including crowdfunded real estate.

Ways to Make Passive Income

In this section, the speaker discusses six ways to make passive income.

Peer-to-Peer Lending

Peer-to-peer lending involves lending money to people in exchange for interest payments.

Online platforms like Lending Club can be used for peer-to-peer lending.

The average return rate is around 5% after fees and losses.

Renting Out Your Home

Renting out your home on Airbnb or other platforms can be a good way to earn passive income.

If you have extra space in your home, you can rent it out to someone else and earn monthly rent payments.

Investing in Municipal Bonds

Municipal bonds involve loaning money to local governments, which pay back with interest.

Cities and states issue municipal bonds to fund projects like building schools or roads.

Dividend Stocks

s Dividend stocks are stocks that pay out dividends regularly.

s These dividends provide a source of passive income for investors.

Real Estate Investment Trusts (REITs)

s REITs are companies that own and operate real estate properties.

s Investors can buy shares in REITs and earn passive income from rental income generated by the properties.

Creating Digital Products

s Creating digital products like ebooks or online courses can generate passive income through sales.

Municipal Bonds and Pseudo-Passive Income

In this section, the speaker discusses municipal bonds as a way to avoid paying taxes and generate passive income. They also introduce three ways to create pseudo-passive income streams.

Municipal Bonds

Municipal bonds are federally tax-free investments.

State taxes may still apply depending on where you live.

Investing in a municipal bond from your state can help you avoid state taxes on your income.

FNYQX is an example of a fund that invests in New York municipal bonds with a $1000 minimum investment requirement.

High-income earners can benefit from investing in municipal bonds to shield themselves against taxes.

Pseudo-Passive Income: Making Videos

Starting a YouTube channel requires minimal investment (less than $1000).

Consistency and hard work are key to building a successful YouTube channel.

Quality content will eventually be shared by YouTube, generating revenue for years into the future.

Pseudo-Passive Income: Affiliate Blogging

Every company wants more sales, making affiliate blogging a lucrative opportunity.

Affiliate bloggers earn commissions by promoting products or services through their blog.

Pseudo-Passive Income: Real Estate Crowdfunding

Real estate crowdfunding allows investors to pool their money together to invest in real estate projects.

Investors can earn returns on their investment without having to manage the property themselves.

The next section of the transcript discusses two additional ways to create pseudo-passive income streams but does not have any timestamps associated with it.

Affiliate Marketing

In this section, the speaker talks about how to start affiliate marketing and make money by promoting products through a blog or website.

How to Start Affiliate Marketing

Create a blog or website where you teach people how to work out and burn fat.

Link your favorite supplements using your affiliate link within these articles.

Reach out to companies and ask if you can promote their products as an affiliate.

Get a special link from the company that pays you a commission when someone buys their product through your link.

Starting Affiliate Marketing for Free

In this section, the speaker explains how starting affiliate marketing is inexpensive and can be done for free.

Starting Affiliate Marketing for Free

You don't have to pay any money to start doing this type of affiliate marketing.

Use free website builders available online to create a brand new website with zero dollars.

Write articles on these websites and include links to your favorite supplements using your affiliate link.

Becoming an Influencer on Social Media

In this section, the speaker talks about becoming an influencer on social media and making money by selling advertisements on Instagram.

Becoming an Influencer on Social Media

Create an Instagram page for yourself or business brand page at no cost.

Produce content that people want to see and engage with.

Build a following of 10,000 followers or more before charging brands between $10-$100 per post depending on niche, product promoted, and audience demographic.

Saving Money Tips

In this section, the speaker provides tips on saving money.

Review Your Bills

Review your bills to ensure you are not being overcharged.

Check for any extra charges or subscriptions that you did not sign up for.

Build Your Financial Base

Take the first step to build your financial base by saving money.

Save your money the right way and learn how to cut back expenses without sacrificing fun.

Saving a Thousand Dollars Quickly

Learn 10 ways to save a thousand dollars quickly.

Smash the thumbs up button below to help others see our financial news and education videos.

Saving Money by Knowing the True Cost

In this section, the speaker discusses how to save money by knowing the true cost of what you're buying and making sure you're only paying for what you use.

Stop Paying for Things You Don't Use

Review your credit card statement and bills to identify subscription services that are no longer needed.

Cancel subscriptions or services that are not being used to save money.

Know the True Cost of What You're Buying

Calculate how much time it takes to earn enough money to buy something.

Consider taxes when calculating the true cost of an item.

Determine if it's worth spending your time on a purchase by calculating how much money you could make if you invested that same amount instead.

Follow the 24-Hour Rule

Before making an impulse purchase, take a step back and ask yourself what is the true cost of the item.

Wait 24 hours before deciding whether or not to make the purchase.

The Importance of Delayed Gratification

In this section, the speaker emphasizes the importance of delayed gratification in saving money.

Take a Step Back Before Making Impulse Purchases

Ask yourself what is the true cost of an item before making an impulse purchase.

Wait 24 hours before deciding whether or not to make a purchase.

Understand Opportunity Costs

Consider what else you could do with your money if you didn't spend it on a particular item.

Calculate how much money you could make if you invested the same amount instead of spending it.

The Debate Over Eating and Drinking Out

In this section, the speaker discusses the debate over whether or not eating and drinking out is a waste of money.

The Coffee Debate

Some financial experts argue that buying coffee is a waste of money.

Others argue that it's okay to indulge in small luxuries as long as they don't break the bank.

Be Mindful of Eating and Drinking Out

Eating and drinking out can quickly add up and become expensive.

Set a budget for eating and drinking out to avoid overspending.

Saving Money by Making Your Own Tea and Guacamole

In this section, the speaker discusses how making your own tea and guacamole at home can save you a significant amount of money compared to buying them from a store or restaurant.

Making Your Own Tea

Making your own tea at home is easy and cost-effective.

A nice cup of tea made at home costs between 35 cents to 50 cents, while buying the same tea from a nice tea shop costs a minimum of $3.50.

By making your own tea at home, you can save up to $2.50 per cup compared to buying it from a store or restaurant.

Making Your Own Guacamole

Buying an avocado for 89 cents allows you to make four sides of guacamole at home.

A small side of guacamole from a store or restaurant costs at least $3.00.

By making your own guacamole at home, you can save up to $2.11 per serving compared to buying it from a store or restaurant.

Consumption vs Enjoyment

It's okay to go out and enjoy drinks or food with friends occasionally, but spending money every day on things that can be easily made at home is unnecessary.

Drinking water instead of ordering soda in restaurants can also help save money.

Negotiating prices is possible in some cultures like India.

Overall, making your own tea and guacamole at home can lead to significant savings over time without sacrificing taste or quality.

Negotiating Bills and Saving Money

In this section, the speaker provides tips on how to negotiate bills and save money.

Negotiating Bills

Take all your utility bills and compare them with competitors' rates.

Try to get your bill down to the competitor's lower introductory rates by calling customer service.

Ask if they can match or beat their competitor's rate.

Be nice to customer service agents as they deal with complaints all day long.

If they don't bring your bill low enough, ask to speak with a manager who has more negotiating room.

Moving Savings

Automatically move some money from your checking account into a savings account every time you get paid.

Consider moving your savings account to an online bank that pays higher interest rates than traditional banks due to lower fees and overhead costs.

Shopping Around

Shop around for services such as insurance (health, home, car) in order to save money.

Simple Ways to Save Money

In this section, the speaker provides simple ways to save money.

Spend Time Shopping Around

Spend half an hour shopping around every year to ensure you're getting the best deal possible.

Negotiate prices to get a better deal.

Sell Unused Items

Sell items that are not being used and taking up space in your home.

Clothes, furniture, electronics, and other items can be sold for cash.

Avoid Late Fees

Pay bills on time to avoid paying late fees.

Use technology such as auto-pay or reminders to help pay bills on time.

Use Technology to Save Money

Use apps like Honey and Piggy to find coupon codes and save money while shopping online.

Join loyalty programs or cashback programs to save money automatically.

Invest Wisely

Determine if you have only $1000 or more than $1000 before investing.

If you only have $1000, invest it wisely in order for it grow into something bigger.

Investing $1000: What to Do with Your Money

In this video, the speaker discusses what to do with a $1000 investment. They explain why investing in a savings account or CD is not the best option and suggest two ways to invest actively.

Investing in Savings Account or CD

A savings account pays out an average of 0.05% per year.

A CD (certificate of deposit) offers a guaranteed return but has low-interest rates.

After five years, a $1000 investment in a savings account would only grow by $2, while a CD would only yield around half a percent per year.

Investing in the Stock Market

Investing $1000 in the stock market can yield an average return of 7% over five years.

However, this still only results in less than $400 profit after five years.

Two Ways to Invest Actively

Invest in Knowledge

Investing in knowledge and learning new skills can increase your value and earning potential.

Examples include digital marketing, affiliate marketing, coding, and design.

Create Income Streams Online

Creating income streams online is more accessible than ever before.

It requires stepping out of your comfort zone and finding ways to make money online.

Investing $1000 - How to Get Started

In this section, the speaker talks about how he started his financial media company with less than a thousand dollars and shares tips on how to invest a thousand dollars.

Starting Small

The speaker started his financial media company with less than a thousand dollars by investing in basic equipment and spending time learning how to make videos.

If you only have a thousand dollars to invest, start by investing in your knowledge first through books, classes, and seminars. Then find something you want to do and use that money to fund it.

If you have a steady stream of income and can add more money to your investments every month, consider passive investments where your money is out working hard for you while you continue to create an income stream.

Investing in Index Funds

The speaker recommends investing in index funds rather than individual companies when starting out with a small amount of money.

Investing all your money into one company comes with more risk because if the company doesn't do well or goes bankrupt, your investment is worthless.

Index funds allow you to invest in multiple companies at once, reducing risk and providing diversification.

Overall, the speaker emphasizes the importance of investing in education before making any investments and suggests starting small with passive investments like index funds.

Investing for Beginners

In this section, the speaker discusses different ways to invest money, including investing in funds and real estate. The speaker emphasizes the importance of doing your own research before investing and not blindly following advice from others.

Investing in Funds

To invest in a general sector like dividends, real estate or technology, you can invest in index funds like VOO or S-P-Y.

If you want exposure to tech companies like Apple and Microsoft, you can look at funds like VGT and QQQ.

For passive income, consider investing in dividend ETFs like VYM and SDY.

Automating Your Investments

Create an automatic system where a portion of your paycheck goes directly into the funds you want to invest in.

This ensures that you don't spend your investment money.

Real Estate Investing

Crowdfunding platforms allow you to invest small amounts of money (like $1000) into a portfolio of real estate investments.

When these investments make money through rent or property value increases, you'll make money too. However, selling these investments is not as easy as selling stocks.

Note that it's important to do your own research before investing and not blindly follow advice from others.

Investing $1000 - Real Estate, REITs, and Paying Down Debt Early

In this section, the speaker discusses three ways to invest $1000. The first is through real estate investing, either directly or indirectly through REITs. The second is by paying down debt early to get a guaranteed return.

Real Estate Investing

Real estate investing can be done directly or indirectly through REITs.

REITs are companies that invest in real estate and pay out higher dividends because they are required to pay out 90% of their profits to shareholders.

Examples of REIT ETFs include V, Q, and USRT.

Paying Down Debt Early

Paying down debt early can give a guaranteed return because it reduces the amount of interest paid over time.

This is a good option for those who don't want to take on risk with stocks or real estate investments.

How Banks Make Money and Secrets They Don't Want You To Know

In this section, the speaker explains how banks make money and shares some secrets they don't want you to know about building wealth.

How Banks Make Money

Banks make money when you give them money, spend money you have, or spend money you don't have.

When you deposit money into your checking account, the bank immediately lends it out to someone else.

Secrets Banks Don't Want You To Know

Banks make more money off people who don't understand money and spend money they don't have.

There are secrets to building wealth that banks don't want you to know because they don't make the bank any money.

Understanding how banks make money is important in order to take advantage of these secrets.

How Banks Make Money

In this section, the speaker explains how banks make money and the fees associated with using credit and debit cards.

Credit Card Fees

When you use a credit card, the bank charges the merchant a fee to process the transaction.

The fee for processing a debit card transaction is less than that of a credit card, but it doesn't make much difference to the consumer.

Using a credit card can provide perks such as cash back and rewards.

Spending Money You Don't Have

If you spend money you don't have with your credit card, you will be charged an insane interest rate by the bank.

Banks make money from overdraft fees when you use money that you don't have in your account.

Getting Your Money Out of the Bank

To prevent banks from making all of your money, get your money out of the bank.

When you deposit your money in a checking account, the bank lends it out to others while giving you nothing in return.

Managing Your Money: How to Keep Your Finances in Order

In this section, the speaker discusses how to manage your money effectively by keeping it in different bank accounts and investing it wisely.

Keeping Money in the Bank

The speaker recommends having a checking account for daily expenses and bills.

It is important to keep enough money in the checking account for at least a couple of months of expenses.

A high-interest savings account should be used for emergency funds, with three to twelve months worth of expenses kept liquid.

Extra cash can be kept in another savings account for investments such as real estate.

Investing Wisely

The speaker advises taking extra cash out of the bank and investing it elsewhere, such as the stock market or real estate.

Banks do not want you to take your money out because they make money off of it, but you should use your money to make yourself money instead.

Automatic withdrawals into stock market investments are recommended.

When taking money out of the bank, expect resistance from bankers who want you to keep your money with them.

How to Build Wealth and Stop Being Broke

In this section, the speaker discusses how to build wealth and stop being broke by avoiding financing liabilities, using the bank's money to buy assets that make you money, and seeking financial advice from professionals.

Avoid Financing Liabilities

Financing liabilities such as cars, shoes, and clothes is a common practice but it keeps you broke because these things don't make you any money.

Instead of financing liabilities, use your money to buy things that will pay you.

People finance their everyday lifestyle which makes them look rich but they end up spending the rest of their life paying off debts.

Use Bank's Money to Buy Assets That Make You Money

Using the bank's money to buy an asset that makes you money is a smart move. For example, buying investment real estate can be a passive investment where tenants pay rent and cover expenses while putting some money in your pocket every month.

However, using the bank's money to buy liabilities doesn't make sense because it keeps you in debt for a long time.

Seek Financial Advice from Professionals

Your banker is not your financial advisor. Their job is to lend you money and keep you in debt for as long as possible. Seek advice from financial advisors or accountants who have your best interests at heart.

The speaker emphasizes that building wealth requires discipline and making tough choices such as driving an affordable car instead of financing a luxury car.

The Power of Compounding

In this section, the speaker explains how compounding works and why it is so powerful. He compares compounding with money to compounding with knowledge and skills.

Compounding with Money

Even if you're not investing your money in the traditional sense, you should still be earning compound interest.

The more money you have, the more power you have to earn even more money through investments.

Every dollar earned can buy another machine that makes you a nickel, which means more earnings over time.

The longer you let your money sit there and invest and compound, the more your money is going to be able to grow.

Albert Einstein's Eighth Wonder of the World

Compound interest is called the eighth wonder of the world because every time your money earns more money, you'll have even more money that can work hard for you.

Your one dollar is working hard to earn you more dollars. It becomes a system almost like a machine that's just working to produce you more money.

Starting Small and Growing Over Time

You don't need a ton of money to start compounding. Even starting with just one penny can lead to significant growth over time.

There are different strategies for actively compounding your wealth, such as buying low and selling high or investing in real estate.

Passive Compounding

Passive compounding involves putting your money into an investment account or retirement fund and letting it grow over time without actively managing it.

This can be a good option for those who don't have the time or knowledge to actively manage their investments.

Conclusion

Compounding is a powerful tool for growing your wealth over time, whether you're actively managing your investments or letting them grow passively.

Active and Passive Compounding

In this section, the speaker discusses two ways to compound money: actively and passively. He explains how he reinvests his profits back into his business to grow it bigger, and also talks about the risks involved in active compounding. The speaker then goes on to explain passive compounding, where one invests their money and lets it grow over time.

Active Compounding

The speaker reinvests his profits back into his business to grow it bigger.

He talks about how he started a cell phone accessory business with a friend in college, and they slowly compounded their profits by buying more products to sell.

The speaker warns of the risks involved in active compounding, as there is a chance that things may not work out if all profits are continuously reinvested without taking any money out for oneself.

Passive Compounding

The speaker explains passive compounding as investing one's money and letting it grow over time.

He mentions that anytime the invested money makes a profit, it should be reinvested back into the investment so that the growth continues.

The speaker cautions against keeping one's money in a bank account or CD due to low returns.

Investing in the Stock Market vs Flipping Businesses

In this section, the speaker compares investing in the stock market to flipping businesses. He explains that while there is no limit to how fast you can grow your money by flipping businesses, investing in the stock market historically yields an average of 8-10% growth per year.

Investing in the Stock Market

The stock market historically yields an average of 8-10% growth per year.

There are two ways to make money in the stock market: through appreciation (when the price of your stock goes up) and through dividends (when a company gives you a cash check).

If you can grow your money by 8% a year in the stock market, you can double your money every nine years.

You can compound your money by investing in companies on the stock market that are reinvesting their profits.

Flipping Businesses

There is no limit or baseline to how fast you can grow your money by flipping businesses.

It's uncertain how good returns will be when flipping businesses; it depends on what you're doing and how good you are at it.

Dividend Reinvestment Strategy

In this section, the speaker discusses dividend reinvestment strategy as a way to build wealth. He explains that not all companies pay dividends, but those that do allow investors to automatically reinvest their cash payments into buying more shares of the company.

Dividend Reinvestment Strategy

You can compound your money by investing in dividend-paying companies and reinvesting their cash payments back into buying more shares of the company.

Dividend-paying companies are typically more established and mature, with excess cash that they have no better use for than to give away to shareholders.

Not all companies pay dividends, but you can still compound your money by investing in companies on the stock market that are reinvesting their profits back into growing themselves.

Compounding Your Money

In this section, the speaker explains how compounding works and how it can help investors grow their wealth over time. He discusses how investing in a startup company that is reinvesting its profits can still allow investors to compound their money even if they don't receive cash payments from dividends.

Compounding Your Money

You can compound your money by investing in a startup company that is reinvesting its profits back into growing itself.

Investing in a company that is compounding all of its money through reinvestment allows investors' shares to become more valuable over time.

Dividend Investments vs Real Estate Investments

In this section, the speaker discusses the differences between dividend investments and real estate investments.

Dividend Investments

Dividend-paying companies are typically larger and more mature, making them a safer investment with smaller returns.

The average dividend is typically in the 2-4% range, depending on the company.

Taxes must be paid on dividends received, even if they are reinvested.

Real Estate Investments

Investing in real estate can provide both passive income and appreciation in property value.

A 7% annual return on investment is a good minimum to aim for when investing in real estate.

It takes 10 years to double your money with a 7% cash-on-cash return.

Real estate provides tax benefits such as depreciation tax deductions that can reduce taxable income.

The 1031 exchange allows investors to sell a property and buy another without paying taxes on profits.

Downsides of Real Estate Investments

Dealing with more people such as real estate agents, property managers, and contractors can be challenging compared to investing in stocks.

Investing in Real Estate vs. Stock Market

In this section, the speaker discusses the differences between investing in real estate and the stock market. He emphasizes that while both can be profitable, investing in real estate requires more cash upfront and involves negotiating deals with tenants.

Investing in Real Estate

Negotiating deals with tenants is a significant part of investing in real estate.

It takes more cash to start investing in real estate than it does to start investing in the stock market.

Compounding your money is essential for growing wealth through real estate investment.

To compound your money, you need to have more money working for you.

Investing in the Stock Market

You can start investing in stocks with as little as $100.

Reinvesting at least some of your profits is crucial for compounding your money and growing wealth through stock market investment.

Conclusion

The speaker recommends watching his video on real estate investment and joining their free finance and business newsletter.

There are many ways to find visible deals when investing in real estate.