Personal Finance Learning Guide
<aside> 🗒️ In this section: We cover how to get the tips & tricks we want to pass on for you to become a 🥋 stock investor! 📈
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<aside> <img src="https://s3-us-west-2.amazonaws.com/secure.notion-static.com/3d5151c9-ff49-4810-b124-36b690702c70/Favicon-simplify.png" alt="https://s3-us-west-2.amazonaws.com/secure.notion-static.com/3d5151c9-ff49-4810-b124-36b690702c70/Favicon-simplify.png" width="40px" /> If you are just getting started OR you don't want to research specific companies, the easiest (and least risky) way to invest in the stock market is to buy index funds. Index funds are collections of stocks selected by a professional investor. We strongly suggest this for beginners (listen to Nicole Lapin who agrees!)
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There are over 7,000 index funds to choose from, each with their own selection of stocks. For example, the $SPY ETF represents the biggest 500 companies (S&P 500) in the US, whereas $ARKK or $NERD ETFs contain selected companies in technical innovation and gaming respectively. While index funds may sound boring, the returns can be high ($ARKK has increased 150% in 2020 alone).
https://s3-us-west-2.amazonaws.com/secure.notion-static.com/e544651a-fa1f-4a05-9582-6b02d8b70e66/ETFs.mov
<aside> <img src="https://s3-us-west-2.amazonaws.com/secure.notion-static.com/56b4a927-640b-4e0c-8a96-81ade795dfe5/Favicon-simplify.png" alt="https://s3-us-west-2.amazonaws.com/secure.notion-static.com/56b4a927-640b-4e0c-8a96-81ade795dfe5/Favicon-simplify.png" width="40px" /> Companies like Wealthfront or Betterment make this even easier for you by auto-selecting the best index funds for you and allow you to make monthly deposits to grow your money over time.
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To learn more about index funds, check out this article from NerdWallet.
To find an ETF based on a specific category, check out the ETF screener.
Check out this article which predicts their top ETFs for 2021.
For those more advanced risk-takers who want to select specific companies to invest, here's our 🔑s we've learned from over the years. Also, check out our sample investment proposals to give you an idea of how to think about an investment idea (FYI this is not investment advice).
<aside> <img src="https://s3-us-west-2.amazonaws.com/secure.notion-static.com/d09e197c-4163-451f-800a-321ecbb71661/Favicon-simplify.png" alt="https://s3-us-west-2.amazonaws.com/secure.notion-static.com/d09e197c-4163-451f-800a-321ecbb71661/Favicon-simplify.png" width="40px" /> When you start, you're going to make mistakes. Invest a small amount of money in 3-5 companies to focus on learning, not making $$
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<aside> <img src="https://s3-us-west-2.amazonaws.com/secure.notion-static.com/d781205a-e139-4246-b539-283b757b73f9/Favicon-simplify.png" alt="https://s3-us-west-2.amazonaws.com/secure.notion-static.com/d781205a-e139-4246-b539-283b757b73f9/Favicon-simplify.png" width="40px" /> Investing in stocks is about future growth, not about today. Don't get caught up buying companies that are popular today but aren't growing.
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<aside> <img src="https://s3-us-west-2.amazonaws.com/secure.notion-static.com/969606fd-6ab5-4c78-9087-23afdd383c68/Favicon-simplify.png" alt="https://s3-us-west-2.amazonaws.com/secure.notion-static.com/969606fd-6ab5-4c78-9087-23afdd383c68/Favicon-simplify.png" width="40px" /> Bet on the future within your circle of competence. Whether you're into gaming, fashion, sports, technology or something else, identify trends that you see and bet on companies that would benefit from those trends. For example, if you see gaming taking off, invest in companies who make gaming software (Fortnite, etc) or hardware. If you think trends from Covid-19 such as remote work and fitness will continue, you may want to invest in Zoom stock. Check out our sample investment proposal to give you an idea of how to think about this.
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<aside> <img src="https://s3-us-west-2.amazonaws.com/secure.notion-static.com/b6f9c5ce-eaa5-46da-9105-348d49b1174d/Favicon-simplify.png" alt="https://s3-us-west-2.amazonaws.com/secure.notion-static.com/b6f9c5ce-eaa5-46da-9105-348d49b1174d/Favicon-simplify.png" width="40px" /> Bet on companies whose CEOs were the founders of the company (e.g. Jeff Bezos of Amazon, Elon Musk of Tesla, Mark Zuckerberg of Facebook, etc) and impress you.
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<aside> <img src="https://s3-us-west-2.amazonaws.com/secure.notion-static.com/1a1ab6c6-389d-40c3-88d3-33a002692ecb/Favicon-simplify.png" alt="https://s3-us-west-2.amazonaws.com/secure.notion-static.com/1a1ab6c6-389d-40c3-88d3-33a002692ecb/Favicon-simplify.png" width="40px" /> Develop a community of resources outside of HAX to share and test your ideas. Finance sites such as SeekingAlpha and social media are great places to do this, such as @stockstobuy @saxena_puru on Twitter or Reddit (r/personalfinance, r/investing).
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<aside> <img src="https://s3-us-west-2.amazonaws.com/secure.notion-static.com/16de762a-92b7-4a9d-9395-69833d27a6df/Favicon-simplify.png" alt="https://s3-us-west-2.amazonaws.com/secure.notion-static.com/16de762a-92b7-4a9d-9395-69833d27a6df/Favicon-simplify.png" width="40px" /> Follow Warren Buffet's punchcard rule - bet big on a small set of companies you have high confidence in, vs. a small amount in many companies.
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https://twitter.com/saxena_puru/status/1328728104315994112
Want to learn about crypto investing? Check out Section 13!
Want to learn about the best ways to think about investment portfolio strategies. Check out Section 14!
Want to learn about how to minimize your taxes. Check out our section on taxes!
