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Everything You Should Have Been Taught About Investing in School with Brian Feroldi

Jul 30, 2024

In this engaging discussion, Brian Feroldi, a seasoned financial educator and author, shares insights from his investment journey since 2004. He emphasizes the importance of starting young to harness the power of compounding. Listeners learn about common pitfalls in investing, the dynamics of IPOs, and the advantages of index funds over traditional mutual funds. Brian also explores the history of major market indices and offers wisdom on avoiding mistakes, highlighting how self-education can significantly enhance financial decisions.

01:11:12

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Brian Feroldi

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Quick takeaways

Starting to invest early is crucial as the power of compounding returns significantly amplifies wealth over time.

Understanding the distinction between ownership shares and corporate value is essential to grasp the fundamentals of investing in stocks.

Focusing on low-cost index funds rather than actively managed funds can lead to better long-term investment performance and reduced costs.

Deep dives

Brian Feroldi's Journey into Investing

Brian Feroldi began investing in 2004 without any prior knowledge about the stock market, despite having a business degree. His interest in finance was sparked by reading 'Rich Dad Poor Dad,' which led him to explore various literature on investing. Through extensive learning over the years, he aimed to understand why the stock market consistently trends upward. This inquiry culminated in his book, which seeks to break down the complexities of stock investing into accessible concepts for beginners.

Ownership is Fluid: The Evolution of Equity

01:18

Understanding the Price to Earnings Ratio

01:57

Intro

3min

Investing Fundamentals: A Beginner's Guide

19min

Understanding IPOs and Stock Market Dynamics

21min

The Power of Compounding and Index Funds

17min

Navigating Financial Advisors: Key Considerations for Investors

3min

Common Investment Mistakes and the Importance of Starting Early

3min

Investing in Self-Education and Community

5min

Enjoy this re-release with my guest, Brian Feroldi. Brian is a financial educator, author, speaker, creator, and YouTuber. Brian began investing in 2004. He had no idea what he was doing at first, but as his experience and knowledge of the stock market developed, his returns improved considerably. He enjoys assisting others in making better financial decisions, particularly with regard to investments. He joined us today to talk about his book, ‘Why Does the Stock Market Go Up?: Everything You Should Have Been Taught About Investing in School, But Weren't.’

According to Brian, the most powerful time to start investing is when you are young. The more time that you have on your side, the more powerful the dollars that you are putting into the market. Brian shares the common investing mistakes people make and how to avoid making those mistakes.

We explore the benefits and potential pitfalls of taking a company public and investing in mutual funds. Brian also dives into the history of the Dow Jones Industrial Average and the creation of the S&P 500.

Whether you're a seasoned investor or just starting out, this episode offers valuable insights into the world of finance.

[02.54] US stock market – Starting the conversation, Brian explains why he addresses the US stock market as the greatest wealth-creation machine of all time in his book.

[10.29] Selling ownership – We talk about how a corporation can raise money from investors by selling ownership in itself.

[16.03] New York Stock Exchange - The largest stock market exchange in the world today.

[23.15] IPO – Brian defines what an IPO is and how it interfaces with the stock market.

[30.21] P/E ratio – Brian defines the Price to Earnings ratio and the macroeconomic factors that resulted in a high or low ratio in different time periods.

[38.05] Benjamin Graham – Benjamin Graham invented the concept of value investing, influenced Warren Buffett

[43.00] Compounding - The compounding of an investment leads to massive gains in wealth over time.

[50.49] Mutual funds – Brian explains the reasons for the underperformance of mutual funds.

[59.46] Financial advisor – We talk about the things people need to be looking out for if they are going to use a financial advisor.

Resources

Connect with Brian

Website - brianferoldi.com/

LinkedIn - linkedin.com/in/brianferoldi/

Instagram - instagram.com/brianferoldi/

YouTube - https://www.youtube.com/@BrianFeroldiYT

Twitter - twitter.com/BrianFeroldi

Book by Brian