In the game of investing for your future, it goes without saying that the earlier you start on your investing journey, the better, and the goal is compounding, which means that your money is working exponentially for you. That’s why it is never a bad idea to start investing in your 20s or as soon as you can to reap handsome results in the years to come and until you retire. But since the 20s is typically a time of mid-life crisis and uncertainty, it may be a bit puzzling where and how to start organizing your finances. Solomon Ali dissects an online video that shares valuable tips on how to proceed with your investments even at a young age and plant your financial seeds that will yield exciting results in the future. He goes deep on the right way to approach tax payments, how to be clear with your personal goals, and the best strategies for compounding.
Watch the episode here:
Listen to the podcast here:
Start Investing In Your 20s: The Make Or Break Rules To Live By
Thank you for tuning into another episode of the show. My team is doing an awesome job. I just have to give it up for them because they’re doing a tremendous job in getting these videos and everything out so that you guys can get the information that you need to be able to help you to fulfill your goals and your dreams about what it is you’re trying to do. They thought this 2021, it will be a lot better than at least for the first quarter, I guess. They may doing a whole bunch of talking all the time to listen to other people in what they’re doing, what they’re sharing with their audience so that we can share with our audience as well. We know sometimes our audience might make up a fraction of their audience, but a lot of times it’s not catered to people who look like me or women, especially if you’re a woman that’s an entrepreneur, that’s in business and things like that. It’s a lot of good stuff that you probably need from a different point of view and a different perspective.
If you’re a man that looks like me and had to bootstrap a business or for that fact, any man, no matter what color you may be, had to bootstrap a business. You understand some of the information that I’m sharing and why it’s important. You may not have learned certain things, but now you get to learn them and you get to save your business or move your business a little bit faster by being able to get access to capital. If you’re a simple investor looking and you’re happy with where you are and everything like that but you’re just looking for companies to invest in, this is the place where you can find those companies and get educated on what to look for, why you should be looking at it and what the companies should be doing.
I know a lot of people like buying stocks and thinking it’s an easy thing but it’s a lot more to it than just buying a stock. You have to understand a few dynamics and you have to put a system together. What you’re looking for and why so that you’re not on an emotional roller coaster is what I call it. If you’re a company or an investor that’s looking for some consulting, Solomon RC Ali Corporation. Go to our website, SolomonRCAli.info, and see what consulting services you might be interested in. Pull it up, get educated, get knowledge. I’m not saying that I am the greatest at it or even the best. I take that back. I am the best, bar none. I don’t mind going hands up with anybody because I believe in what I’m doing. I don’t take the shortcuts, guys. I do the work and my team that works around me, they do the work or I look at them kind of funny and then they know what that means.
All that being said, they picked out an awesome video. They wanted us to focus a little bit on our younger audience that has a lot of questions and things of that nature about early-stage investing. People who are not quite ready to buy a company or run a company, but do want to invest in and be a part of it. They pick out this super video. I don’t know how they find this stuff but they go out and they search. They vet all of these different videos, screen them, and everything to make sure they’re the right videos for you that’s going to give you the right content, knowledge, and information so that you’re able to consistently make sound decisions. This video here is the best ways to invest in your twenties. If you’re a 20-year-old or even a 30-year-old, I’m going to add that part in the best ways to invest. It’s a really popular video and the guy does a dynamic job. He’s just super in how he explains it and things of that nature. It will be beneficial to you. My team did a lot of work to figure this out and to bring this to you. Let’s go ahead and get started.
“Something dear to my heart, what’s the best way to invest when you’re young? You’re in your twenties. When it comes to investing, the earlier you start, the better. Compounding works in such a way that your money grows exponentially on itself. What that means is that a person who starts investing a few years earlier could end up with many times more money when it comes time to retire than they would if they had just started later in life. If you’re in your twenties and you’re wanting to get a head start on investing, here are a few tips to help you out.
You must take ownership of your future.
Learn To Invest
First, what you want to do is learn to invest, big surprise. You’re going to have to figure out how investing is done. You’ve got some choices here. I’ve gone through an awful lot of the things you’re going to have to look at. Let me just give you some advice from about 35 years of doing this. There is a family of investors that started with Ben Graham and then to Warren Buffett and Charlie Munger down through these teachers, down to me, and from me to thousands of students about an investing strategy that is the best in the world. This is where the millionaires and billionaires come from. It’s a strategy you can use, whether you’re starting your own business, buying a franchise or building one, whether you’re buying the house next door to rent it.
Get Control Of Your Cash
This strategy of investing, we call Rule #1 Investing is the strategy in the world that you should learn as early as possible so that you have your whole life ahead of you to compound money. Once you’ve learned something about how to invest, then you want to start getting control of your cash. The first thing you’ve got to do is pay off that student debt. Student debt is such a common burden for people in their twenties. I want to apologize to you from my entire generation for screwing all of you on your college tuition. If you still have outstanding student debt, paying it off should be your primary investing goal. It’s a real shame because I’ll tell you, when I went to college, it was a lot cheaper. Since then, the cost of living has had been about 3% per year. Colleges have gone up at 8% per year. I know that doesn’t sound like that big a difference, but it’s the difference between going to school for $1,000 a semester versus going to it for $20,000 a semester. In the same way that sound investments grow your wealth exponentially, this debt that you’ve had to incur is also increasing exponentially. It grows larger and larger as the years go by. It’s brutal. I feel for you.
Get Into A Retirement Account
Before you wade into the stock market, you’ve just got to get out from under that burden. Every way you can think of it, start by eliminating that debt because it’s going to hold you back in the long-term. Third, get into some form of a retirement account. They call it a qualified account. You’ve got a company 401(k) plan where they match your funds. That’s an okay one. I’m not a super fan of that unless of course, they allow you to invest your money any way you want to, and more and more of them are doing that. If you’re in a 401(k) program where they match, and then you’re forced to invest in mutual funds, I’m afraid that within the next couple of years, you’re going to be giving it all back. I would strongly urge you to invest where you can get control of where that money is going in someplace other than mutual funds. I would put it into a Roth IRA or a regular IRA where you’re managing the money. A Roth is fantastic. 401(k)s are great if they’re going to match and match and all that but once they’ve matched, then you’re in this ridiculous investment.”
I’m going to recap and I wanted to make sure I placed some emphasis. If you’ve read before, you always read about taxes. Taxes is the biggest place that you can gain money. What I mean by that is if you can save on taxes, cut your tax bracket down, doing it the right way. You’ve got to give to Caesar, what is Caesar’s or give to our government what is our government’s. You’ve got to be fair about it. That is where you gain the most amount of money. The accumulation of that is extremely important. I don’t make interest-free loans and I don’t recommend you make an interest-free loan neither. I don’t give my money away and then say, “Give me it all back,” or “Give me a portion of it back at the end of the year.” I utilize my money to do certain things. One of the things he said, “Learn the rules of investing.” That’s what we’ve always been talking about on the show. We start off by telling you how we look at companies, how companies can come together, and everything of that nature.
It’s learning the rules and we’ve been going over what those rules look like, how do you pick a company that makes sense for you. We’ve got so many followers, that’s when you get to turn around and say, “Let me go to the Solomon RC Ali website. Let me pull up one of the companies that they’re working on.” Maybe you don’t like that particular company, but maybe you will find one because you understand the rules now of how to determine if a company is a good investment and then you can make that investment into that company or some other company. You’ve got to remember, our stuff is just for educational purposes only so that you can benefit from it. It’s not a recommendation or anything like that. The rules help you.
Sometimes you’ve got to go to different places where you’re going to have to spend money to learn the rules. You’re going to have to buy their different programs. You get to come to our place or come to our show, share it with a friend where you’re not spending any money to learn these rules. You’re gathering a lot of knowledge where other people go places and they’re spending $5,000, $20,000 to sit in a room for a few days to learn the information that I’m giving you for free. That’s right, I’m giving it to you for free because if I believe that you can do what I’ve done, we’ll have a better economy, our society is better and there’s enough room for everyone.
Follow your goals and stick to them. Don’t move to the left or right. Go right down the middle and you’ll get to where you’re trying to go.
The next thing he went off, if you are a student or college grad and you’ve got debt and things like that, you guys have heard me say this over and over. Pool your money with other people and buy a business. Pool your money with other people, form a legal entity. Take that legal entity and purchase a business. In that way, you all have your pro rata share of ownership based on what you invested. That may be a local laundry mat that legal entity that you just form go get. It may be a grocery store. It could be anything. You buy it and you might put 10 or 15 of your student, graduates, and stuff like that, friends that you notice graduated with you.
That’s how you can pay off your debt. That business itself that you guys formed, you can use to pay off the college debt. There are some other little secrets and techniques behind that because companies do pay for education and companies get tax write-offs for doing so. I don’t know if you guys caught on to what I just said, but there’s a way that if you’re a company, you get a tax write-off for education for your employees and things of that nature requiring certain degrees. That’s how you do it.
You form your legal entity, put your monies together, and buy a business. Use the proceeds or the profits from that business to go ahead and pay off the debt. I also would recommend strongly after that, maybe in year 2, year 3, you buy another business and another business with the same group of people. In that way, you’re starting to build a chain and then later, you can sell that for a large sum of monies. The next thing he was talking about is your retirement account. Retirement accounts are very simple. I don’t like any of the traditional ones because in 2008, what happened? A lot of people lost all their money. Some people lost some of their money.
These were things that they were investing in that they had no knowledge that the company was managing and overseeing, and they lost all their money. Just like that, gone. They were investing 10, 20 years for their money to be gone or most of it to be gone. That’s crazy. He was just beginning to start telling you about a self-directed. He hadn’t used the word self-directed, I’m going to use the word. You want a self-directed plan. A self-directed plan allows you to make investments. You control it and you get the same advantages that you would have gotten if you were investing in your previous 401(k) or some other IRA program.
You must take ownership of your future. It’s not hard. You haven’t been taught this. We’re trying to help you. We’re trying to give you the information and the knowledge you want a self-directed plan so that you’re able to direct those funds. You can make investments in stock. You can make investments in real estate. You can buy companies, you can do all kinds of things where they self-directed plan. It must be a self-directed qualified plan. That’s the least what I’m talking about and it looks like he’s talking about the same thing. Wherever there are two more gathered and so we’re right on it, like minds think. He’s doing the thing and he’s doing a good job. Please read this more than once. Let’s get back to the video.
“You pay taxes on the money before it goes into the Roth, but then you never pay taxes on the growth of that cash. I’ll tell you, you’ve got a Roth IRA and you’ve got a regular IRA. The key thing is you get your money into a place where you can control it and you have the ability to pick and choose your investments using the principles that Ben Graham, Buffett, and Munger have taught us, in that way you’re going to get the maximum returns. As for why a Roth IRA is preferable for individuals in their twenties, as opposed to let’s say, a traditional IRA, Roths requires you to pay the taxes on your contribution first. You’re in a low tax bracket in your twenties, typically. People in a higher tax bracket in their 50s maybe should use a regular IRA because they might be paying 35% or 40% tax. If you’re paying 20% tax, you want that money in an IRA to grow without taxation on it ever.
Watch your money because it will earn and work for you.
Set Budget And Saving Goals
Fifth, create a budget and set savings goals. This is important, and I am the wrong person to teach you about it. I am the worst budgeter on the planet and horrible at savings goals. If it’s any consolation, you can still get wealthy even without doing this. However, when I first started, I didn’t have a budget but I had a discipline of living on very little money and that is what I’m talking about here. Creating a budget so that you are forced into a limited amount of spending and sticking to it is one of the things that’s going to help you get disciplined about your investing. Here’s what I would suggest, from every single paycheck, designate a certain percentage that comes out right off the top.”
If you follow us, you’ve known me say about a young lady I was interested in when I asked her on a date. I liked her. I knew she was friendly enough. I asked her on this date and everything. I told her my money was funny and I was telling her the truth. My money was funny and that, “I would like to go out on a date with you, but you’re going to have to pay for lunch or dinner.” Who does that? Solomon Ali did that. I had to stay within a budget. My money was funny. I had to make sure I was making the right investments. I had a definite of purpose. I knew what my money was to be used for and nothing was going to distract me or move me off of that definite of purpose, not even a young lady.
Young ladies, don’t let a young man move you off that definite of purpose. Young man, don’t let a lady move you off of that definite purpose or whatever else is in between. Don’t do it. Follow your goals, stick to it. Don’t move to the left. Don’t move to the right. Go right down the middle and you’ll get to where you’re trying to go. When you bring and allow other people to move you one way or the other, it takes you longer, and then you sometimes have to relearn and refocus what you already know.
He said, “Pay yourself first.” Everyone tells you to do that, but no one does it. Do you know what you all do? I used to do it. We go out. The first car I bought was a Saab Turbo. Why did I need such a car? I could’ve got something old and used that was frugal, but I get this big, expensive car. People, watch your money. Your money will earn and work for you. Don’t you keep working for your money. Accumulate it by paying yourself first so you can place it to work. That’s what you need to do. Place the money to work. To do that, you have to go ahead and invest in yourself and other ways to get more education from listening to people from buying their different programs and things of that nature so you get the knowledge that you need.
“In other words, pay yourself first. I know you’ve heard that. Everybody’s heard that, but it’s important that you do it in your twenties because those dollars you’re saving and putting away in your twenties is money that I know you could live on it better. You could have a better car. You could have better clubs. You could take some trips that you want to take, but that money that you’re putting away, that turns into your millions of dollars later on. If you don’t think that’s important, let me just cue you up here. Warren Buffett was in an elevator, going up with a bunch of insurance guys. One of these guys said they were watching Buffett looking at a penny on the floor of the elevator.
He said, ‘I was wondering if Buffett was going to bend over and pick up this penny, this billionaire. He didn’t do it.’ He didn’t pick up the penny. The doors opened up, Buffett stepped out. He looked back at these guys before the doors closed. He reached out and picked up the penny. He just held it up like this went, ‘Beginning of the next billion.’ The point is that Buffett understands the power of compound. He understands the power of a little money in today, what that means 30 or 40 years from now, it’s millions of dollars. Setting a budget. It’s very important to get the money into an investment account before you spend it. In addition to setting a budget, that includes the money you’re going to pay yourself first.”
Spending Your Seed
I’m going to break it down this way. Don’t spend your seed. Think through your money as a seed, think of it as a fruit tree or orange tree. Every dollar you have, you plant that dollar and it grows to become a full, mature tree that you can eat off of. I get another dollar, I plant another tree. That’s how you have to think about this. Don’t spend your seed. If you’re going around and you say, “I need a new pair of shoes,” or “I need a new suit.” You’re spending all of your seed. You have nothing to invest in. You’re not going to get those fruit trees.
Some of you are going to end up with more fruit trees than others, but those fruit trees are going to continue to bear fruit for a lifetime. They’re going to become trees that you can feed your family with that you can pass on to your kids. They’re going to be able to pass it on to their kids. That’s how important it is. If you don’t get any other principles that people like me are speaking about or anything like that, what you have to understand is you’re playing with your future and you’re going to live just over broke for a long time. If that’s the life you want, stop reading and go somewhere else because you’re not the people we’re talking to. I’m talking to the people who want a better quality of life, who want to leave something for their family, who want to have enough to pass on for generations to come and teach these principles.
These were secrets before because people didn’t share it. Now it’s in the open we’re sharing the secrets. We’re sharing how to do this. We’re sharing what it takes how to make these decisions. Please don’t spend your seed. A lot of people tell me, “Let’s go to lunch.” These are people that work for me. They say, “Let’s go to lunch. It’s $10.” How many workdays are in a month? It’s twenty, so that’s $200. That’s $2,400 in a year. The money would have been invested. It would have had an interest on top of that. If it would have been invested in some of the stocks, in the deals and things of that nature like what we look at and like what he looks at and other people look at that we share with you, where would you be? I use your lunch money because so many people think it’s only $10. It’s only $5. In fact, I might be so out of date, where can you go to get lunch or find out because everywhere I go now, it’s costing me about $17 to $20, just for lunch for one person.
[Every dollar you plant will eventually become a full and mature tree that you can eat off from.
If that’s the case, this is crazy. Cut back on your spending. People took us to dinner on special occasions. Now, all of a sudden, everybody goes to dinner all the time. They go to lunch all the time. Your money is your seed. It’s the secret. It’s what you’ve got to place in the ground. In this case, investing it in the right vehicle so you can get a tree. That’s what we teach folks in our consulting at Solomon RC Ali Corporation. That’s what we teach people who are trying to build wealth. It’s like, “This is how you do it,” but it does require you to make some decisions. It does require some work on your part. Let’s go back to the video. He’s sharing some great stuff.
“Specific investment goals. How much money do you want to have invested by the time you’re 30? How much can you see pulling out, keeping the belt tight, keeping focused because that money is going to make you very rich someday? How much money do you need to invest each month or each year in order to achieve that goal? If you set a savings goal and you push yourself to achieve it, you’re going to find it much easier to stay motivated and push yourself further. I would say this, if you are having trouble figuring out what’s the best way to go, lean toward just saying, ‘I’m going to put 10% of the money that I make, it goes right into the kitty. It goes right into my investment account right off the top,’ and just stick with that 10% every time.
Let me give you an example of how important is that to put money aside now and invest it. Let’s say that you are going to double your money twenty times over a course of a lifetime. You’ve got $1,000 now and you’re going to double it twenty times. Let’s walk through this. $1,000 doubled twenty times is a $1 billion. Think about that for a second. If you take this $1,000 and instead of putting it away where you can double it twenty times in your lifetime like Buffett has, he’s done much better than that, you just took $1,000 and bought a refrigerator with it, and that refrigerator 30, 40 years later cost you almost $1 billion.”
I liked his analogy to how he broke that down. People, your money is your seed. When you plant that seed, think of it as a tree that’s going to grow many pieces of fruit. If you have one seed and you give it to anyone, or you just dispose of it, you never get the fruit tree that you can eat off of for a lifetime, that your family can eat off of for a lifetime. That’s what investing is. That’s how simple it is. Bank up of every dollar you get as a tree. Every dollar you invest into a business, into a stock, you have to make sure that it’s safe that the money is working for you. It’s a tree that you’re going to continue to eat off of time and time again. You’re going to be able to feed other people off of it because of your charitable contributions that you get to make.
Please do not get rid of your seed. Educate yourself, learn what your investments are to do. That’s why we’re here at MBA, trying to share the type of investment. We’re sharing our secrets. We’re sharing Solomon RC Ali Corporation, what we do and how we do it. When we look at a company, the things that we look for in that company, we’re sharing that. The things we look for in the industry, the things we look for in management, the things we look for in the marketplace, the growth potential. We know that our money will grow. We take the dollar and we invest it over there knowing that we’ve invested in a tree. It’s going to mature and continue to feed us. It has worked very successfully over and over again. That’s why I’ve been able to start over and be successful. That’s why I can lose it all, start over and get back to where I am every single time because I understand the principles. I understand how to do it. That’s what makes it work. This is awesome. He’s killing it.
“The power of compounding is crazy in terms of making you wealthy. You might not double twenty times a year. You only doubled ten times, it becomes $1 million. Do you want to give up $1 million to have a refrigerator? I don’t think so. I’d love to hear from you. Do you have investing goals set for yourself? Maybe you should. Leave a comment below with your answer and I’ll be sure to follow up with you. Thanks for watching. Now go play.”
That was hot. I hope you got it. I hope you enjoyed it. To my team, I want to say thank you. That was one of the better videos that I’ve seen you guys bring so that the people can just do it. If you’re having questions, if you want to know more information, please do not hesitate to reach out to one of my team members or one of your team members. They will help you and walk you through the things that you need to know. We’re giving this information away for free. If you are an investor, it’s not costing you anything. We’re not saying, “Buy a course.” We’re not selling anything. There are no courses to buy from us. We’re not turning around and saying, “Use any of our services.” What we are saying is go to SolomonRCAli.info, figure out what you need help in. Reach out. We can help you.
If you are a business owner, you’re an entrepreneur and you’re trying to grow and scale your business and things of that nature, we are consultants. We can help you put the package together for what the lenders are looking for, what investors are looking for. We understand it because that’s what we do. That’s who we are and we do this every day. That’s what it is that we do. If you are a business and the banks have been telling you no, other private equity companies or VC companies, investors are saying, no, they’re not seeing it, don’t get upset. Come and get the help that you need. We could put that package together. I’ve got a book coming out in 2021. It’s a must-read. It will help you no matter if you’re a business owner and investor, or you just want consulting services. Come on, read the book. It will take you through the mind field successfully and get you on time. Thank you so much for reading. It has been a pleasure like always in hosting the show so that we can get you the information that you need to make your life what you want.