8 Years Of Investing Knowledge In 15 Minutes

Over the last eight years, I've grown my investment portfolio from zero to 175,000 pounds. I've quit my job, but now I live life largely on my own terms. And today I'm gonna share with you guys the eight principles that define that journey, which if followed, I have no doubt whatsoever that you guys can achieve the same too. Now, for those of you who are new around here, well, hi, my name's Mitch. I'm an ex-banker turned YouTuber and investor, and I've been on my own investing journey for quite some time now. And in today's video, I wanted to give you guys a little bit more of an insight into that journey in the most transparent way possible to help you guys build the confidence to build out your investment portfolios too. I grew up in a working class, single parent household, so naturally money was a little bit tight. And I think I kind of always knew this as a kid, and it's the reason why as soon as I turned 16, I went out and got a job. The first job was here, washing dishes in a local pub. It paid a pittance of three pounds 64 an hour, and I absolutely ******* hated it. I hated it so much! But I knew as soon as I turned 17 that I wanted to drive, so I had 12 months to save up as much money as I possibly could to make that financial goal a reality. So whilst doing this, I also decided to get a job at a local McDonald's too. Thanks very much. I took on both of these jobs to make as much money as I possibly could in and around my A-level studies, which I was doing at the time. And all of this, I guess, was a little bit instinctive, but it taught me one thing that I still believe in to this day. It wasn't about the number of hours I was working or how hard I was working. It wasn't even about how much money I was earning because it was an absolute pittance. In actual fact, it was how I was able to treat that money. Despite only earning a few quid an hour, I managed to diligently save up about 3,000 pounds. That was just about enough money to buy a clapped out Peugeot 206 and afford my first year's worth of car insurance, which is about 2,500 pounds. And the only way I was able to achieve this was through saving a large proportion of my income, somewhere in the region of probably 90% or so. Now, of course, that's obviously not realistic in terms of a percentage savings rate. In today's day and age, we have me now having a mortgage and bills and cars and all that kind of stuff. But it was that level of financial discipline that allowed me to achieve that very first financial goal that I had in life. And it was this very level of financial discipline that I believe has allowed me to build out my own investment portfolio. But before I could do that, there was something that I had to do first. I've read well over 100 books on the topic of personal finance and investing. Before I deposited a single penny into an investment account, I spent hours and hours and hours learning first. And there was one very simple reason for that, and that was to build up my confidence. When I first started out, I literally had no idea whatsoever what I was doing, but studying the people that did gave me a little bit more of a feeling that I had a better chance of success. I guess it was almost like having a millionaire mentor of sorts that could kind of give me the knowledge that I needed to give me a 90% degree of certainty that I knew what I was doing. After all, investing was, and kind of still is, a foreign concept in my childhood household. It wasn't a topic that was discussed nor understood. So I'm sure like many of you guys watching, I kind of had to go and help myself. Now I've got some of the books that I've read on my shelf here, but one of the first books that I ever made was a book called Money Master the Game by Tony Robbins. It was this very book right here, which pretty much told me all of the things that I needed to know when it came to the foundations of investing. It gave me an introduction to the S&P 500 and changed my perspective on investing altogether. And there is a quote that I want to read you guys, and it says that over any 20-year period in the history of the S&P 500, the market has never gone down, never. The stock market is a little bit like a roller coaster, and if you get out whilst it's at the bottom, you're going to miss out on the ride to the top. And that was kind of all I needed to know to commit to a long-term investing strategy. I'm investing in the top 500 companies in the United States of America. Having read the book, I felt pretty inspired to take action, but unfortunately at the time I was still at university and I didn't really have any kind of amount of money to invest. So I kept studying, and then eventually once I secured a graduate job and got my first month's pay packet, I then started investing into the stock market. Now I hadn't planned to do this, but if you'd like me to send out a free copy of this book, well, I'm going to pick three of you guys who are subscribed to the channel and leave a comment down in the comment section below with perhaps an investing tip along with the book emoji too, and I'll get a copy of this book sent out to you. I've always loved the saying learn before you can earn. It perhaps doesn't resonate as much in today's modern society. However, for me, I think it's really, really important because as I've learned, it does these three things. Number one, reduces your risk of failure. Number two, cuts down your learning curve. Number three, it speeds up results, which means you're only really missing out on one thing to become a successful investor, and that's experience. And we'll touch upon a little bit more about my experience and my successes and mistakes in just a moment's time. But when you're starting out investing, I feel like reducing your risk of failure should be one of, if not your top priority, especially because of today's world of internet stock investors that perhaps could influence you to make the same mistakes that they're making. Shout out to James Janney, who's done a recent documentary on the GameStop cult. And the reason why I say this is because if you'd invested into a stock like GameStop at the height of the mania in kind of 2021, and you'd invested, say, a thousand pounds, and then that stock then sold off by about 73%, well, today you'd be sat in a portfolio of under 300 pounds. If you were to get caught up in that, it would probably leave you thinking that investing is kind of like gambling. It would leave a sour taste in your mouth, and you'd probably only think that it's only there to make money for the big investment bankers over on Wall Street. So before you go out into the world of investing, there's three things I think you should do. First up is to have an investment plan. Secondly is to make sure that you have an investment thesis around your investments. And thirdly is to make sure that point one and point two are both aligned to your financial goals. These are the things that I've done over time, and it resulted in my first 400 pound investment growing into a portfolio size altogether of over 14,000 pounds, and is now well up over 125%. But the only reason I was able to achieve this is because I followed the next principle down to an absolute T. There are thousands and thousands of different investments that you can make, which makes it somewhat difficult if you're just an investing beginner starting out. Trading 202 are a prime example who have over 13,000 stocks available on their platform. So even if you say had a portfolio size of 10 different individual holdings, that would only make up 0.06% of the overall total investments that you could make on that platform. And then from that very small selection, you'd then need to curate an investment portfolio that traditionally speaking was perhaps well diversified, very much aligned to your risk appetite, and offer you stable returns. But this is where controversially, I've taken a slightly different approach to my own investment portfolio, and so far it's kind of worked out for me. And that position was to prioritize growth over stability. I don't own any low risk bonds or inflationary hedges like gold. I don't even own a globally diversified ETF. Instead, I very much focused my investment portfolio on a collection of top performing tech and growth stocks, and have full exposure to the best performing index over the past 20 years, which is the S&P 500. And the reason why I've done this is to maximize every single percentage point that I can get my hands on, to hopefully disproportionately have better returns at some point in the future. Here's a chart of the stocks that I've invested in and the returns that they've generated over the last five years. And now here's some of the returns of some more traditional investment portfolios, like a 60-40 stock bond split, and lower risk investment returns like a Vanguard investment grade bond fund. I would have still certainly got positive returns from investing in some of these other funds. I just wouldn't have been able to maximize my returns. Even if we'd, let's say, put a thousand pound into each one of them, well, here are the returns that you would have received after the last five years. And hopefully that demonstrates why I've personally chosen growth over stability, because after all, I am only in my 20s. And because of that, my investment time horizon is long enough that I can kind of swallow up any kind of downside fluctuations within the market. And that's not to say that this will be the strategy that I have forever, because it certainly won't. But I guess that's one good reason to subscribe to the channel in order to make sure that you stay up to date with my investment strategy and how it's gonna change over time. Now, not only is it important to kind of figure out your own investment strategy, but also your tax strategy is perhaps just as important. So that's what we're gonna cover next. In my opinion, picking the right investment account is just as important as picking your investments. The two most common accounts that are used when it comes to investing are a general investment account and a stocks and shares ISA account. I have and will always use a stocks and shares ISA account, which I currently have with Trading212. And the reason why I do this is because Trading212 as a broker are commission free, but the account which I've opened with them is also tax free as well. Meaning that any capital gains that you make from growth in stock prices or perhaps any income that you receive from dividend stocks, you will not be liable to pay any kind of tax whatsoever. So you kind of keep all of your costs associated with investing to an absolute minimum. Whereas with a general investment account, well, that account is taxable. I won't specify what the rates are here because they could certainly change, but I'll leave some helpful links down in the description below if you wanna see a little bit more of the details. Now, if you would like to open an account with Trading212, they are kindly offering all of my subscribers one free share valued up to 100 pounds when you click on the link down in the description below and open an account. Alternatively, if you've opened an account in the past 10 days, you can just enter the promo code Mitch, just deposit one pound into the account and you'll still be able to claim that free share. Now, the next bit is how I was able to build an investment portfolio over onto Trading212 with over 17,000 pounds of unrealized profits. There are a lot of investors out there that overcomplicate things and it's usually to their own detriment. Trying to time the market for an impending recession to sell at the top and buy back in at the bottom once the market has potentially crashed 20 or 30%. But let me be real, that's not going to work for 99.9% of you guys who are watching this video. And there are tons of different studies and research papers that show that actually professional active fund managers just fail to outperform a passive investment fund. And aside from what all of the studies say, let's just be honest, nobody really knows what's going to happen in the stock market anyway. It's the reason why I've adopted the strategy of cost averaging into the market every single month, taking a passive approach to my overall investments. And this strategy for as long as I'm investing will be one that I simply don't deviate from. It's easy for me to manage from a personal finance perspective, I get paid on a monthly basis and then I use some of that income to straight away put into my investment portfolio. Then once a year, usually around Christmas time when I've got a little bit of downtime, I start to review my portfolio and my personal finances as well. I understand how I'm positioned and whether I'd like to make any changes in the year ahead. In the past 12 months, many of you guys have been staying up to date on the channel probably have seen that I've not actually been actively investing in the individual stocks that I own. And instead I've been more investing into the S&P 500 ETF instead. And that's certainly been intentional because of the review that I did where I wanted to increase my overall portfolio's percentage allocation to a more diversified fund rather than my individual stocks which had increased so much in value. And when I started out investing, I was only 21, but I'm 29 now and my portfolio has grown quite a bit. And the reason for this is in this next step that I'm about to share with you. When I started out working life, I was on three pounds and 64 pence an hour. But over time, I was able to climb the corporate ladder eventually over the course of the past seven years or so, increasing my income and then once again quitting my job which allowed my income to increase even more. And whilst that might sound quite linear in terms of my progress, throughout that period of time, I was constantly testing different side hustles. And I think that's becoming ever more important regardless of your income level. And let me explain why. I found a chart from the Office of National Statistics showing the average weekly wage over the course of the past few decades. And I've annualized the numbers and it shows that back in 2000, the annual salary was 15,680 pounds. That compares to 2024, which is 33,800 pounds. That's a 115% increase. And I want you to take a mental note of that 115% figure because when we compare that to some of the other common expenses that we have, well, the math doesn't quite match. Average house prices are up from 77,698 pounds to 265,012 pounds, an increase of 241%. Average household electricity bills were 312 pounds a year. Now they're 964 pounds and 80 pence per year, an increase of 209%. Pint of milk was 34p. Now it's 85p, an increase of 150%. You kind of get the picture. And that's without even considering things like insurance, council tax, petrol, going on holidays and even meals out. Like everything is more expensive. And it's not just that it's more expensive because that's natural with inflation. It's the fact that it's disproportionately more expensive relative to the growth rates that we've seen in our income, which therein lies the problem. So I guess that's quite a long-winded way of me saying to try and think outside of the box of your nine to five income in order to combat this disparity, which I believe will only get worse over time. It's what I did and it allowed me to significantly increase my contributions to my own financial future. But there is one word of warning that I must make before we finish off this video. I'm not gonna shy away from this fact that most of us like to speculate a little bit. I feel like it's kind of human nature that most people like a little bit of a bet to see if they can perhaps 10X or 100X their money. I mean, you only really have to go onto Reddit pages like WallStreetBets or Stonks to see that this is kind of common practice in the retail investing community. But what I would say is if you do have appetite to do this, make sure it's a small percentage of your overall investment portfolio allocation. For me personally, I make sure that it's always less than 5%. And the reason for that is because back in 2020 or 2021, I bought a stock called Tattooed Chef and I got burnt bad. The stock dropped 70%. I lost like 600 pound once I'd sold the position, which I'll flash up a screenshot of an old investment portfolio update. And then the company eventually filed bankruptcy. This was a very tough lesson to learn at the time. And it also goes to show that when you are investing into speculative stocks, exactly what can go wrong. I admittedly took the same level of risk on a company called Palantir Technologies at the time, and that stock has done the complete opposite and has gone on to become a really good performing stock within my investment portfolio that I still hold to this day. But nonetheless, if you do have the appetite to speculate within an investment portfolio, just don't make sure the whole portfolio is full of speculative investments because that is without doubt a recipe for disaster. So I've talked about the eight principles that I've learned over the past eight years worth of investing, but if you would like to see what my investment portfolio looks like in practice, to show you where I put my money, where my mouth is, well, be sure to check out that video next. With that being said, see you over in the next one.