Many of you want to become millionaires. And some of you might already have crossed this milestone. This is for both categories. People say the first million dollars, is the hardest to make but today a million dollars, isn't what it used to be the catch is you need to have a million dollars to understand, that it's not enough. Welcome, to, alex.com. The place where future billionaires. Come to get inspired. If you're not subscribed. Yet, you're missing out. So what is there to do, watch until the end because we are breaking it down for you. Hello alexers. And welcome back to this special sunday motivational, video. Somehow you got your hands on a million dollars. After taxes. Maybe you sold your first company, maybe you got lucky and aunt jemima, left you an inheritance. Buckle up because we'll take you through it all, let's break down your best options. Here are 15. Ways to invest, one million, dollars. Number one, buy rental properties. This is the first item on our list because this is what we did the moment real money started coming in all of it went toward buying rental properties. What we're about to say will definitely, step on some toes, but, one million dollars, isn't enough to make you rich, but if you know what you're doing with it one million dollars, could mean you'll never be poor again, at least that's how we did it, one million dollars, invested, in rental properties, will bring in between fifty thousand, and one hundred thousand dollars, per year in rental income, and this is straight up paying cash for your properties. If you know what you're doing and are open to using, debt, things can look much brighter. You've got plenty of options to choose from, single family, multi-family. Commercial, spaces. Anyone with 1 million dollars can pick up a couple of apartments, near the city center or around business, centers, and live off the rent, as we said earlier, 50 to 100, 000. Per year before, tax, might not qualify, as a rich living by any means but if you're frugal, it means you and your family will no longer worry about food or bills again. The average, property, appreciates. By three to six percent, in price every year so not only are you bringing in rental income, but the price of the property, is also going up, this is important, so pay attention. The first million dollars, park it in things that make you money while you sleep, and then pretend, you never had it, a couple of nights ago we were hosting some friends and one of them raised the following, question. What would you do with 5 million dollars, right now, our answer, put it next to the other ones and get back to work, people wrongly assume if you get 1 million dollars, you'll stop working and sip cuba libres, in cuba on a beach only to get there and realize, that life has more in store for them, but maybe you're not a sophisticated. Real estate investor, and don't know where to invest. That's where this, next option comes into play. Number two. Invest, in an reit. Reit. Stands for real estate investment, trust, to put it simply, people with money such as yourself, join up and put the money together in a management, fund, the people who manage the fund go out into the marketplace. And invest the money into properties, that generate, income, the money coming in is then divided, by how much every person has contributed, to the fund, reits.
Are Great for people who don't want to handle the day-to-day, aspects, of managing, their rental properties, and these funds, also have the added benefit of getting yourself, involved into bigger deals, for example. Buying and renting an office building is definitely, more expensive, than picking up one or two apartments, the type of deal that would be difficult to close on your own, just google, reit. And your country, and you'll find investment, options in your geography. It's important to know that if you're willing to put in the time, you can get better returns, on your own but at this stage, it's all about, saving you time. Number three. Bonds, or cds. Never in a savings account. Truth be told we didn't want to include this one we were about to make a 10 list video but since you've been so vocal about including, everything, we put this in early so we can get it out of the way, out of the three. Bonds, are our favorite option, they're super easy to understand. You simply lend money to a corporation, or the government, and in exchange, for your money you get paid a fixed amount regularly. When the deadline on the bond expires, you're paid back your initial amount, if you need the money you can sell the bond to other people or back to the bank before the term, you can find bonds in every country, they vary between 2.5. And 6 percent, and you can buy government, bonds directly, through your national bank, just walk in and ask about them. Cds. Referring to certificate, of deposits. Is another financial, instrument where you basically, agree with the bank that you'll leave your money untouched, for a fixed amount of time, and in exchange, they'll provide you with a better interest rate, personally, we don't use these, the highest return we've seen was under two percent and they don't have the same flexibility. As bonds, but at least they kind of keep up with inflation. But it's still better than just keeping your money in a savings account. We don't know about you but the worst, thing for us is just having money sitting around losing its value. Every, single, day the us dollar is worth, less and less, the government, keeps printing money and shoving it into the economy, in order to compensate, for the impact of the coronavirus.
And What does the marketplace. Do, it reacts, by absorbing, the money and raising prices, accordingly. This is why real estate prices, keep going up, this is why jeff bezos, is worth close to 200, billion dollars, that's why tesla's, stock price is going up the way it is right now, it's just the market, absorbing, all the new cash, we do not recommend, keeping your money in a savings account for more than the short term, do you know how much the bank pays you to have your money in a savings account per year. 0.01. Percent. Do you know what the average inflation, rate is. 2.44. If you keep one million dollars in a savings account for one year at the end you'll have one million, and one hundred dollars. The bank of america will effectively. Pay you one hundred dollars, to keep one million, dollars, in your savings account, don't believe us do the math yourself. But the buying, power, drops, because of inflation, and effectively, your money is now worth, nine hundred and seventy five thousand, six hundred dollars. Inflation. Just cost you almost twenty five thousand dollars in a single, year, no matter how you put it you're losing. Way, more than you're earning. And that my friends is why you never keep your money in a savings account, or under your mattress, for that matter. Number four. Gold, silver, and other metals. If the previous, point freaked you out by the impact inflation has on your wealth don't worry there are ways to protect yourself against, inflation. The preferred, option of multimillionaires. To make sure their money keeps its value is to convert, it to gold and silver. You can buy a gold or silver index, on any trading company but you can also go about it the old school way, go out and buy physical, gold. Gold has been the go-to resource, for store of value since the middle ages, what we like about metals, is every time governments, screw with the economy, smart investors, always, move their money out of the marketplace. And into gold, resulting, in predictable, jumps of the price of gold, for example. This is the price of gold for the past, 20 years. 2010. Was the jump after the economy crashed, in 2009. 2020. We have coveted on our hands and are feeling that the entire stock market is in a bubble, so people move their investments, into gold at least for the medium, term. At this point you might be thinking, why the hell would anyone invest in something other than gold just look at these numbers. And the answer is fairly, simple, for sophisticated. Investors, the price of gold is a barometer, of just how quickly fiat currencies. Like the us dollar or euro, are losing their buying power. When you invest in gold although the price goes up the value remains the same, your gold doesn't make you any more gold while you keep it in your safe, it's just worth more in today's, money, if you want to grow your fortune, you need to technically, beat the return, that gold provides. Number five, index, funds. You want the hands down best option where to park your money and how to have it grow for you, index, funds is the answer, but don't take our word for it someone asked warren buffett the following, question.
What Would you tell someone to do with a million dollars that is 30 years old unmarried, and with no dependencies. Please be as specific, as possible. Random man, and buffett, said, i would invest in a vanguard, index fund and get back to work, that random, man was tim ferriss, the author of four hour work week and tools of titans. For those of you have no idea what we're talking about allow us to introduce you to the s p 500. This is a fund that bundles, together the top performing, 500, companies in the us, if a company does poorly, it's automatically, taken out and replaced, with one coming up, you're basically, investing in the best companies, all at once, because of this level of diversification. You're almost, guaranteed, that you'll make money over the long run, ready to have your mind blown away, the average, annualized. Total return for the s p 500, index, over the past 90 years, is 9.8. Almost, 10. Year after year for 90, years. 1 million dollars, invested, today at 9.8. Percent, over 10 years, means 2.6. Million dollars. Keep it there for 20 years and you'll end up with 6.5. Million. If you're young and have time on your side, leave it for 30 years and you'll end up with 16.5. Million dollars. This is why even albert einstein, considered, compound, interest, as the eighth wonder of the world. And this is how you make sure you never go broke. Set it and forget it and your entire, family, tree could live off the interest when you retire. We're not sponsored, by them but hands down the best way to invest in an index fund right now is vanguard. Check out if they're available in your geography, and start learning more about them and if this is exciting for you and something you want to take full advantage, of in your lifetime, we recommend you pick up the following book, money, master the game, we'll link to it in the description, it's a simple read that walks you through the entire, industry. Even better if you go to alex.com. Free book and it's your first time signing up you can get the audiobook, version for free thanks to our friends at audible.
Number Six. Stock market. All this investment, talk probably has your blood flowing and the more you think about it the more you come to realize, maybe you can do better than 10, a year, you've seen tesla stock price increase, five times, since march 2020, and want a piece of the action. We promise, to always keep it 100 with you, statistically. Nobody, beats the market, in the long run, but every now and then great opportunities, present themselves, and for those who are willing to take advantage, of them you could really win big, a while back we did a video of the stocks, we've invested, in during the pandemic, which you can check out by clicking in the top right corner, and we've been able to cash in substantial, returns, because of it and we're nowhere near the point of sale, although most of our stock funds are just growing in an index fund, now and then we love the rush you get when you play the market and get it right, the best way to learn is to simply invest a small amount of real money, don't fool yourself, trading with demo money and then play it as safe as you can, you'll learn more and more by having money on the table than if you just played, investor. The internet, is filled with stock investment, platforms, so you should have no problem, finding one, we are not paid or sponsored, by any of these but some great beginner options, are robinhood. Revolut. Etoro. And so on, if you really want to do this you'll find a platform, that works for you. Number seven, start a business. With the more passive, options, out of the way it's time to get busy, if you had a million dollars and wanted to invest in a business, why not invest in your own business. That way you're taking in all of the risk but you'll also enjoy, all of the returns. Starting a business is a lot more complicated, than having a job, it's more like you have multiple, jobs and you're not getting paid unless the business survives, and thrives, for a couple of years. Sure, the million dollars you have under your belt will prove to be quite an advantage, and allow you to hire better people, and buy the tools you need to accelerate, your growth, but don't fall into the trap of overspending. Anyone, can make money if they have money the goal is to make some without, spending, any, as long as you have a frugal mentality, when it comes to your own business, you'll be able to grow it steadily, and organically. We've made a video called 15, things you need to know before starting your first business that we strongly recommend you check out you should see a card in the top right corner. But what if you don't want to take on the burden of starting a new business, from scratch. Well then the next option, might be for you. Number eight, angel, invest. Angel investing, is when a new startup, needs money and help to take the project, off the ground and you're the one who provides, that capital, and expertise. In exchange, for a percentage, of the business. With the age of tech startups, popping up left right and center, everyone, wants to think of themselves, as an angel investor, but truth be told it's probably the highest, risk option on this entire, list, no matter how good you are if the company you're investing, in isn't the one to take the project where it needs to go it will fail, and so will your investment. A seed investment, varies between ten thousand to one hundred thousand dollars, this money is used to get the company to create what is called a minimum, viable, product, and pick up a bit of traction. Based on how well you do at this stage, you can then go ahead and raise more funds at a higher valuation. Seed investments, aren't as complicated, as they seem but you never want to be what we call in the industry. Dumb, money. Dumb money refers to someone who doesn't bring anything else to the table apart from money, only, invest in businesses.
You Understand. And have the expertise. And connections, to accelerate, their growth. The entire, process, used to be rather complicated, but today you have options, like angel list, angel.co. Where you can invest in startups, from anywhere in the world as an angel investor, and, no they're not a sponsor, either we kind of hate how we have to say that every single time. Number nine, venture, capital, fund. Investing, in companies, is also evolving, and that's where the funds come in instead of hand picking one or two startups to invest in you can take the index, fund approach, here and pool your money with other investors, so you diversify. Your investment. And minimize, your risk. That's how venture capital funds came to be, your 1 million, investment, could back, 10 to 20 different companies. Statistically. 10 of them will fail completely. Five will barely hold on for dear life, four will grow steadily, and maybe, one will blow, up, your bet here is the money you'll make off of this one will be enough to make a profit. These collective, funds have grown in popularity. Throughout the world and they usually have a minimum, entry level to allow you to invest. Some, might even have you commit a recurring, amount of money every quarter, so make sure you understand, what you're getting yourself into, for beginner investors, we definitely, wouldn't recommend, venture capital, as your main option. If you made or have one million dollars, there are much, safer ways to go about it without risking, it all, and speaking of risk. Number, 10, crypto. You know how at number four we talked about gold as a store of value, for years it was the best option we had until more recently, when bitcoin, came around, which is why people call bitcoin. Gold 2.0. The gold of the internet generation. We are strong, believers, in blockchain, and what this technology, will do around the world in the future, and the idea that you could park money that no government can print more of is definitely, appealing, to every investor, out there, the price of bitcoin, at the end of march 2020, when the covid situation, happened, dropped to around five thousand dollars. As of making this video the price is just under 12, 000., the entire, ecosystem, is evolving. The entire, process, becomes a lot simpler, and leaner to access. Many of you are put off because you feel like you don't understand, the technology, and how to go about it in a safe way so we've got you covered. Right now we're in the post-production. Parts of a new course on bitcoin, and blockchain. Where we do just that, we handhold, you from the beginning to the end, explaining. In layman's, terms how the technology, works and show you the exact, tools, we use to buy, hold and sell our own bitcoin. If you're interested in this course we've set up a waiting list at alux.com. Bitcoin. Make sure to add your email so you're notified, when the course goes live. Number 11.. Peer-to-peer. Lending. Peer-to-peer, lending is the old practice, of giving someone your money and having them pay it back with interest, very similar to how banks and loan sharks do it but completely, legal, even technology, got involved and now there are plenty of peer-to-peer, lending platforms, online. We personally, don't use any of them but other acquaintances, of ours do, some of these platforms, will show big promises, of 12, to 15, to 20. Yearly returns, and although you can hit those kinds of numbers, we've never personally, looked at peer-to-peer, lending as a long-term. Strategy. It could work for those of you with a little capital, and higher risk levels, but honestly, if you have a million dollars to put down you'll most likely have better and safer alternatives.
But For those interested to check them out, here are the best peer-to-peer. Options, according to investorpedia. Who knows, maybe you'll find something you like. Number 12. Invest, in art and collectibles. If you had a million dollars, there's, no way we let you spend it all on supreme, gear or jordans, because, the resale, market is where it's at bro. Although there is some truth to that y'all are too young to know about the beanie babies, but here's an education, piece for ya in the early 90s, instead of rare jordans, and yeezys, people were reselling, plush toys called beanie babies, the most expensive, ones sold for over six hundred and fifty thousand dollars, with many of them reselling, between, ten thousand and fifty thousand dollars. It's safe to say it was a fad that went away, would you pay fifty thousand dollars for a plush toy today. Of course you wouldn't, and something similar, is happening today with hyper beast fashion, the actual, alternative. Asset class to invest in is actual, art, art is the last, loosely regulated, market with prices, constantly, going up at least when it comes to heritage, pieces. Very few people know this but blue chip art has outperformed. The s p 500, for the past, 20 years, the problem, here is where do you even start. Unless you have someone who actually knows what the hell they're doing you're better off buying bonds and leaving it at that, but even the art market has evolved in the past couple of years. Once again, not a sponsor, but there is this platform, called. Masterworks.io. That allows you to invest in art the same way you would a venture capital fund, the alternative, is, mutualart.com. That shows when certain pieces come up for sale, our recommendation, would be to never throw more than 10 percent of your net worth into alternative, assets, because even if you know what you're doing there's, still an element of real value, versus, perceived, value, which doesn't apply when it comes to let's say buildings, or land, so definitely, be careful. Number 13.. Buy a franchise, business. A million dollars, buys you at least one mainstream, franchise, business. The beauty of this franchise, model is that most business problems, are already, solved, all you have to do is be a great manager, or even better, find one and your business will keep printing you cash. Franchise, businesses, rely on a hefty investment, but they provide you with the equipment, the training, and the already established, brand, at this point in time if you're looking to start a coffee shop business, and a starbucks, opens up next to you you're basically, done. So why wouldn't you be the one opening up the starbucks.
Let's Break it down, you'll need to pay an initial fee of somewhere between forty thousand and ninety thousand dollars to purchase the starbucks, franchise. This covers the equipment, and branding. And have a net worth of at least two hundred and fifty thousand dollars, with at least, 125. 000 of that liquid, and ready to pour into the business in order to cover the initial running costs, the franchise, fee for mcdonald's, is 45. 000, to which you add the property, costs, and the initial, day-to-day, capital. These are brands, people love, starbucks. Mcdonald's. Kfc. Subway, dunkin, taco bell, there are also, cheaper options, but if you had a million dollars, we would first open up one spot in a good location. And only, then expand, into more territories. A couple of weeks ago we also did a video on franchises, that are blowing up right now that almost, nobody, watched, click in the top right corner for that one. Number 14. Land. With, land the deal is pretty straightforward. You buy the land, you hold the land for some time and then you sell the land for massive profits. We love land as an investment. Even the idea that you can literally, own a piece of the earth that you can leave to your children, to this day is mind-blowing. To us, the basic formula for land acquisition, is pretty simple, buy land, 30 to 50 kilometers. Outside, of any major city and wait 20 years, the world population, is growing, and for the foreseeable, future, businesses. Will still concentrate, their headquarters, in large cities, people working in these corporations. Need their housing nearby. Thus the land outside of the city is constantly, developing. It won't be long until developers, come knocking on your door interested, in building. These developers, will either straight up want to buy the land from you or more often than not work out a deal where they cover the building cost, you provide the land and you split the profits. If you have a million dollars, worth of land and 20 years go by, just the sale of a small portion could be more than enough to solidify, your rich status. If you're interested in playing the game you can develop the land yourself. Build an apartment building or houses. Right now we're seeing a lot of potential with agricultural. Land that is not far from commercial, hubs, you're getting it 10 to 20 times cheaper, and if the expansion, of the city goes your way, it won't be long until you have utilities.
And Roads nearby. Number 15. Emerging, markets. When we say emerging markets, we're talking about two things. One developing, countries. And two emerging, trends, for example, we already know that india has a large population. And right now telecom, is booming as a business. This means in the next decade, almost, 1 billion new people will be joining the online marketplace. These people will need to buy, sell trade, use services, and more, the same thing is happening to south america, and africa. Every, successful, business in what is traditionally. Called, the west, will be adapted, and localized. In the u.s, you have, zillow as the main real estate portal, and amazon, as the main e-commerce, store, who's going to dominate these markets, locally. Grassroots. Companies have the unfair advantage, of understanding, the customer, better than these giants, who aren't as agile, in development. So there is an opportunity, to take your million dollars, back to your home country, and turn it into a fortune. The other aspect, has to do with emerging, trends, and where the world is heading toward, tesla, became the most valuable car company, because elon went all in on the electric, car when nobody believed in the project, and most people never considered, they would ever buy an electric, car, the transition, from petrol to electric, is a trend. Everything that was traditionally, powered by petrol will soon rely, on renewable, energy. Another big trend is ridding the world of plastic. We hate the paper straws as much as the next guy but it won't be long until someone figures out a unique combination, that's maybe better than plastic without the turtles, snorting, them, another trend we're seeing has to do with consuming, local, foods, if you go to any supermarket, right now the tomatoes, are from mexico, or italy the garlic is from turkey or egypt, and so on, why is it cheaper to pack and collect the garlic in egypt, put it on trucks, take it to the port put it on a ship, carry it to here house it there and distribute, it to all the supermarkets, for you to buy. Somehow, all of this middleman, cost will be cut out at some point, and whoever, figures it out will win the challenge. If you have a million dollars to invest, we've outlined your best options. Personally, we would do a combination, of two or three of these, but that's us, at this point it's just a matter of what you believe would make the most sense, for you, which raises the question, if you had one million dollars, how would you invest it, join the thousands of aluxers, who are currently debating this in the comments section below, and as a thank you for sticking with us until the end of course you're getting a well-deserved. Bonus, piece of info. One million dollars. Doesn't, mean you're rich. Today, one million dollars, makes you upper middle class at best, sorry to break it to you when we were growing up one million dollars was the goal to shoot for because in our minds that would have been enough to never have to worry about money again. Times have changed though, governments, have been printing money like crazy, things are getting more and more expensive. And that goal has been moved accordingly. Youtubers, like mr beast are giving away 1 million dollars, for your entertainment. The million, is no longer as rare a unicorn, as it used to be, we're not there yet but before you die, billionaire. Will become, the new millionaire. All it takes is for jeff bezos, to crack that one trillion dollar net worth and suddenly, the switch will happen. By the way he's on track to get there by 2027. Which is crazy, in itself. As of 2020, in order to feel rich enough to not have to worry about money you would need to be worth between, 8 to 15, million. This would be enough to qualify, you as an hnwi. High net worth individual. It took us just under 10 years to go from zero to the first million, and by the time we got to it the world had already changed. If you're starting today we don't recommend shooting for one million dollars, because then you're aiming too low, instead. Try to find business opportunities, that have the potential to go beyond, 20 million dollars, if they work out, that way by the time you hit it with inflation, adjusted you'd be just right, if you're going to work anyway you might as well win big, keep these goals for yourself, you're different than everyone else if you told your loved ones that one million dollars, isn't enough money and you'd actually need 20 million dollars to be rich, they will genuinely, laugh at you and think you're insane. This is why you need to set big goals and keep them to yourself. Big goals, scare people with little vision. If you're ready for a big goal please write the word, big as your answer to today's question. That way we know the message got to all the right people. Thank you for spending some time with us aluxers.
Make Sure to like and subscribe, so you never miss another video. We also hand-picked, these videos, which we recommend, you watch next. You can talk to us on all social medias, or ask a question, on our website. Alux.com. Thank you for being an a-lexer. And we'll see you back, tomorrow.
2020-09-06