Stock Market 101 Basics

The only thing that separates where you are today to being financially free is you taking action.

But so many don't START because of the fear... intimidation? Overwhelm? Don't know where to even begin?

Most of the time it's because they just don't have the basics. And once they do, it's soooo much less scary.

So babe, this ep's to give you the intro to the basics.

The investing path works.

The investing system works.

You just need to start!

Want more? Come and watch the free investing masterclass 

xo
Simone

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If you want to keep on animal and make more money you're in the right place. I spent over 10 years learning from the most brilliant minds in money, wealth, and investing to take myself from 20 K in debt to a seven figure investment portfolio. Join in. As I share the secrets towards more money investing and ultimately freedom. My name is Simone MES Huggins, and welcome to ms. Wealthy's. Kiss my money podcast.

Hey, all my money Vevo. Hey, welcome back to another apps I thought today I would go back to stock market basics one Oh one, essentially, so that I can bring you up to speed because if there are some questions still, if there is some, I'm really not sure about this feelings, uh, I just want to like cover them all off. So you have the clarity, you know exactly what we're talking about, right? Because we are closing off investing bootcamp in a couple of weeks and we're doing a live round with everyone. And I don't want you to miss this one because I don't know what I'm doing the next live round. So I want to cover off, honestly, the questions that I get the most, I want to cover off the basics. You understand it more. And so a lot of the questions that I know so many of you have are answered, and sometimes I forget to do this, right, because I like, I forget that it's been this long.

And I forget that I was in the exact same position. When like, before I started to investing, I had zero clue about what even a stock was. Um, I didn't know what the Dow Jones meant. I didn't know what an index was. I didn't understand what a tracker was. Uh, and all these kind of like basics seem so intimidating. Cause they didn't know the words and seems overwhelming. But once I understood them and like I got like a base knowledge, I was like, Oh, it's actually not that scary. Uh, and I don't want like the fear of the overwhelm or the intimidation or feeling like it's scary to stop you because the more and more that I see all these stats on the difference between what women end up with when it comes to their retirement funds or even just like building wealth themselves on the side, like women honestly are at least at least 25%, less than men on average in terms of what they have in their investment portfolio or what they have in their net worth or their assets.

So, and you know, I've spoken before about how, uh, the industry as a whole has been built by men, which is why I teach women to invest. So I don't want all of this stuff to be stopping you from getting started because honestly the best time is yesterday and the next best time is today. The biggest thing, the only thing stopping you from where you are today to getting to financial freedom is starting and taking action. Like that is it. I am not kidding you. And I really want that to really sink in. Or there is just one thing that you learn and take away from any of these podcasts apps or any of my trainees, any of my free stuff, or like anything. It is literally taking action. And there's so much information like we are drowning in information, we're starving for knowledge, right?

And the thing is this, the plan works, the path works, the system works. It just works. The only thing stopping it is actually starting. And so I don't want any of that stuff to stop you from starting. Okay. So first off, what is even a stock? Like, have you ever kind of thought, like, what does it even mean? So there's a difference between like public companies and private companies. So there's obviously a bunch of private companies. There's your mom and dad shops on the corner. There's the corner stores, but there's also a bunch of really big companies that are very well known that aren't public. So they're private, meaning they haven't gone to the public. They haven't opened all of their books and provided all their financial statements and documents, uh, for the entire world to see. And that's what happens when you go public, because you're essentially going to the public saying, I want to borrow money because I want to grow.

I want to, um, you know, sell off essentially a part of my company based still own the majority controlling stake, but I want to sell off a part of my company. And in turn, I will pay you dividends and you obviously get, um, the growth as well, like as the company grows, uh, which is how the stock market works. When you buy a share, that is literally the term means you buy a share of that company. Um, and so when a company goes public, they list on the stock exchange, um, you know, in whatever country and it's called an IPO, an initial public offering. And that is the very first time that a new, um, private company goes public. And it's the very first time that the public get access to buying into that company. So there are some, for example, Spanx, you know, there is amazing, um, pants that keep us looking really good on the needle about clothes.

Um, Sarah Blakely, the CEO and founder of Spanx, uh, who is like one of she's one of the women. I just love, I love reading all of the, his stuff, her, like, I just follow her because she's such an incredible, strong, powerful, independent self-made woman. Right. But her company is private and she has no intention of listing on the stock exchange, uh, because she wanted to do it. Like all of all herself. The difference is though that she got a lot of venture cap, uh, backing meaning. So she still like sold off a part of her company, but not to the public and more to like private investors. Right. So, but most of the other companies that, you know, and love and use, uh, public, right? So even before, like you get your morning coffee, or even before you get to eight, am you have used like a dozen, if not more at least companies, right?

Because all of your major banks, Facebook, Google pretty much every major internet provider, every major electricity provider, um, every major like beauty brand like proctoring gamble and whatever. Like when you've washed your hair, you've used the internet. You've searched on Google. You've used Facebook, you've gone an Instagram, right? You've used makeup products. You've gone to Starbucks. Think about every single company that you use literally before you even get into work, uh, or get into your office. If you're an entrepreneur, then you've used like at least half a dozen companies, a dozen companies like, and that's not even before we get to lunch, that's not even before we get to like the end of the day. So by the end of the day, you've used like 30 to 50 to sometimes a hundred different companies that are all listed on the exchange publicly. And so you're using them anyway.

So why not own them as well? Thing is like the entire economy is built on what the stock market going up because we are all consumers because our population growth continues to increase because we continue to use new things every day. And we need to, like, we need to eat, we need to wash our hair. We need to use electricity. Like we need to use the internet, right? Like all companies, including us, uh, also dependent on other companies, right. That are all listed on an exchange. So it's built on the economy consistently going up over time. We also have this thing called inflation fun, not, uh, which basically means, you know, 10 or 20 years ago, $20 could have bought you, you know, like five or six items at the grocery store. And now it can buy like two or three. So basically that means the cost of things go up over time.

And that's kind of in a very loose way and I'm going to gloss over it. Very, very, very vaguely, essentially. That is what is what helps to stimulate quote unquote, the economy to go up over time. Inflation increases that for our pay increases. Therefore we spend more on things. Therefore, you know, there are new, um, new jobs because there are new people and that's essentially stimulates growth, right? So it's built to go up over time. Now, do we have corrections sometimes? Do we have like downward trends sometimes? Yup. We do. Cause sometimes the balance of getting the economy right, is doesn't quite work out or sometimes, uh, it's just a bunch of different things. For example, the GFC in 2008 happened because basically lenders and banks were doing dodgy things to how they were making up investment products. So that wasn't necessarily built in anything else.

But that, and so we have corrections occasionally too, you know, as the term suggests re correct the market because it's been going just a little bit too crazy. And that's what did happen before 2008. Now thing you get to bear in mind is that corrections last usually about six months, not even often, they even lasted less than that. 2008 crash lasted less than six months. You guys, less than six months. And previous to that, it's been seven, eight years on upward trend going up the last 10 years, the market's just gone up. We had a little bit of a dip in 2008, 2015. Some people say that that was our correction. And now at like golden and we're like ready to go on for another seven years. Some people say we're going to have a correction, you know, next year, because people will say that every single year and feel listened to the news, they're going to tell you that we're going to have a crash every year.

Right. They said we were going to in 2015 when we had a little bit of a, like a dip. Um, but all it's done well, the economy's down since then has just gone up. And then the last five years, if you hadn't invested, you would be up 50%, 50%. Right? So bear in mind that news is just reporting what is happening currently. They don't know because no one knows. Okay, here's the thing for you to manage the risk. The best thing for you to do is to diversify. And you probably heard that word before. It's not a new word. Uh, but it's essentially to invest to suit you. So you can invest in a portfolio that suits your risk, right? And we go into all of this stuff inside of vesting care. And we talk about your risk profile, what you can actually tolerate, what is best suited to you and then design a portfolio around that.

So that you're confident and it suits you. It also suits your goals. Cause everyone has different ones. Some people want a wealth build. Some people want to focus on income. Some people want a different, you know, like the combination of both, uh, and to manage risk, you can invest in other things that go up when the economy goes down, I'm not even kidding you right now. If I could just show you, um, diagram, I would actually show you. And I do show this in my free online masterclass. I'll put the link in the show notes. If you haven't done that yet, go and take it. It's like not even an hour long. In fact, in a week, I'm going to be live doing it again. So you come and join me. And then that's the last time I'll be doing a live for a while because I'll be focusing on the live round with all of my babes inside investing bootcamp.

So come and join the free online masterclass, uh, and then come and join investing in bootcamp. So we can actually get you started, like I said, in the very beginning, because that's the only thing stopping you, right? From getting to where I know that you want to go. So the other thing that you can invest in is bonds and bonds is what is very, very stable. Essentially. It's probably as stable as you could possibly get. Uh, nothing is guaranteed in life, nothing, right? You step outside, you walk across the road and you know, there's no guarantee that some car or motorbike is going to come around the corner and like swipe you. Right. But it is as guaranteed as possible, probably as guaranteed as the cash that is sitting in your bank account, gathering dust instead of interest, right? Because bonds are essentially companies, corporations and the government.

So what a bond is, is, uh, if the government or a corporation, including banks go out and go look, I want to borrow some money to grow or to, you know, like whatever invest. Uh, and I want, you know, I need this money. They go out, put out, you know, this IOU essentially that anyone can invest in and you essentially get paid the interest on that loan that the government or the corporation has to, has to abide by it. Right? Anyone taking out a loan like credit cards or a home loan knows exactly how this works. It just happens in reverse. So you actually get the IOU, you get, you're essentially lending the company the money, right? So it's called a fixed interest payment because you get the interest on the loan, the government, or the corporation has to, has to pay. And so that's why they're considered, um, very, very secure, very reliable.

And they don't really fluctuate and go up and down, uh, that much. So it means that you can balance a portfolio with these two things, because bonds are pretty secure because the government like the government's there, right? It's very few governments in the world ever, ever, ever default and happening grace like few years ago. But like, if you think about the major first world countries, like where you're talking as secure as you could possibly really get. And so what happens with bonds is they, uh, a very, very stable and they have to be paid back by the period of time that they take out that loan on. Right. So I know it sounds like this is a really, really top line, but essentially you invest in these, on the stock market as well. So bonds are issued by companies. They're also issued by the government and they are, are you ready for this inversely correlated with interest rates?

So when interest rates go up, bond prices fall, what are we looking at right now with interest rates? They are super low, right? Because that's why you're getting nothing in your savings account. Uh, which means that the bond interest rate, the interest rate that you get, you know, the corporation or the government has to pay you, um, is actually higher. Went out, interest rates are lower. So that means that you can invest in things that, uh, a lot less risky and you can balance out the higher risk stuff. Like if you consider the stock market higher risk, uh, then you can balance it out with bonds, right? And like I said, that's what we go into investing bootcamp, uh, and explain it a lot more, what all of it actually means, how it works, understanding the credit quality and the interest rates and which one and the duration, uh, which ones are better like corporate bonds or government bonds.

So that's what we go into in the program. But you need to understand that you can invest in things that aren't quote unquote as risky, right? And even if, even if you're in your fifties, you still have one to two decades before you even need to be worrying about wanting to take that ma that money out and rely on it as an income source, right? If you're in your thirties or forties, babe, like you have got like decades and decades and decades ahead of you. Like not even kidding. And even if you want to retire way earlier and I totally get it, cause that's my plan to, uh, even if you want to that, then you still have decades before you even need to rely on using that as an income source. And even then, if you want to retire, you actually need an asset base.

You cannot retire with a savings account and expect that that will actually take you through for the next 20, 30, 40 years. Right? So it's crucial if you want to retire early that you actually invest in things that pay you money. The millionaires in the world have multiple passive income streams. So they have rental properties. They have stocks that pay dividends like this is the actual key. And I see so many women going, I want to retire in five to 10 years, but they don't have any assets. And they're really reluctant to even invest in. There's just, there's a complete misalignment with the goal and actually the action and the behavior around what needs to happen for that goal to actually become a reality. So I want to know what your thoughts are on this episode, because I know that it's been way, way, way in, in depth.

Um, and possibly a little bit dry. I don't know. I want to know like, has it been dry? Is this stuff, the stuff that you want is this making sense? Do I need to break it down even more? Um, and there's no right or wrong answer. Like I just want to give you the content that actually transforms your beliefs and actually helps you and actually means that you take the next step in the right direction. Uh, so please tell me, I need to know, uh, I always love it when I hear from like, honestly, the babes that listened to the podcast are my favorite women, because I know that you guys are serious. Like so many people that have joined investing bootcamp actually start off with the podcast. And so that's why I love you girls, because I know that this is part of the next step towards you being a serious, fully fledged confident investor. So, okay. Can't wait to hear the feedback on this. Um, otherwise if I don't see you inside the program, I will see you next week. Bye bye.