Vishen Lakhiani missed buying Apple at $0.41 in 2004 and bought in 2016 instead, a decision that cost him roughly $5.5 million. He recommends low-cost index funds over actively managed mutual funds, which charge 2-4% in fees and underperform 90% of the time. Monthly contributions and diversification compound wealth over decades.
Questions this video answers
$0.41
$10,000
Approximately $5.5 million
2016
39
Chapters
In 2004, I was an ipod user. And for the first time, I fell in love with Apple. Now, you might not know this, but I used to work for Microsoft. Apple back then was the enemy company. But here I was, holding this beautiful white device. I was so proud, walking the street with my cheesy white earphones. And I remember thinking, this company is going to be big. I need to invest in Apple. I did all of the research, I read all the speeches by Steve Jobs, and I was convinced Apple was going to be an incredible company. Now, Apple, at that point, I'd saved up $10,000, and I decided I was gonna put that $10,000 in Apple stock. Apple stock back then, adjusted for splits, was 41 cents. Yes, 41 cents. But here's the thing. I was living in Malaysia, and buying US Stocks from a developing country wasn't easy. There was a lot of paperwork I had to file, a lot of complicated processes. We didn't just have access to E trade. So because I hate paperwork, I kept putting it off and putting it off and putting it off in years and years. And I only bought my first Apple stock, I'm ashamed to say, in 2016. Now here's the kicker. If I had put 10 grand in Apple stock back then in 2004, when it was 41 cents, today Apple stock is around 220 bucks. My 10,000 investment would be worth five and a half million dollars today. Five and a half million dollars. But I didn't have that five and a half million dollars because I didn't act on what I knew was a good opportunity. Because I kept saying, someday. You see, I. One of the most intriguing things about the world today is that growing money isn't hard. Buying stocks is no longer hard, but most people put it off. We are all sitting on an incredible opportunity to build for our future. But most of us don't even know it. And even wealthy people miss out on this because of simple misunderstandings. So let's go on to the second idea. Not everyone is going to spot a company like Apple. You don't need to. The s and P500 has grown by over 40% in the last one year. And even if you average this out, going all the way back the last 25 years, the stock market in the US has been growing and growing. You can invest in the stock market without having to pick a single stock. You can put money in a fund that basically matches the market, such as Vanguard or Invesco. Whether you run your own business or you're earning a salary Taking out a little bit of money every month and putting it in an index fund and then forgetting about it. You don't have to pick stocks. You don't have to know when to buy or sell. You're simply trusting in long term growth, as Warren Buffett says, and knowing that the market is going to correct itself repeatedly and put money to companies which are blowing up. Companies like Apple, like Nvidia, like Google, like Meta, like Microsoft. The problem is this. Many people don't understand. Index funds don't even know they exist. Instead, they put their money in expensive mutual funds which are sold to them by the bank. And mutual funds have such a high fee that your money grows nowhere as fast as in an index fund. Mutual funds are designed to make banks rich, not private citizens. So these are things which I wish I had known earlier because when I started investing, I started late. I put my money money in mutual funds rather than index funds. And I made a ton of mistakes. I only really started investing, I'm embarrassed to say, at the age of 39. That was way too late. I had my son start investing on his 14th birthday when Hayden turned 14, as in this picture over here. I remember giving him birthday money and saying, listen, you can buy a toy with this or you can put it in the stock market. Hayden went on to pick stocks that he believed in. Apple because he used an Apple computer. Microsoft because he used a Microsoft computer. Netflix because he loved Netflix. Just companies he really believed in. And at the end of one year, he'd made enough money to take the entire family out for dinner. And that was a big deal for that kid. But I wanted him to learn early, at the age of 14. So if index funds are this powerful, why aren't most people using them? Well, here's the thing. Most Americans end up investing in mutual funds because they are pushed on this by their banks. Mutual funds are similar, but they are actively managed. This means that there's someone buying and selling stock within the fund trying to beat the market. Sounds good, right? But here's the catch. These funds often charge high fees, sometimes as much as 2 to 4% percent per year. And 90% plus of mutual funds underperform the market. 2 to 4% per year may not seem like high fees, but they actually will significantly cut your profits by as much as 70% from investing in an index fund which charges 0.5%. So here's the takeaway. Understanding basic financial principles like index funds versus mutual funds. Like why it's important to save up money and put it in the stock market. Even if you have a current business, don't bet all your money on your business. Diversify, Bet in your business, but park some in an index fund. These simple things can make a massive difference in how much you have saved in the bank when it's time to retire. These missed opportunities can make a world of difference. Whether you're just starting out or you've been investing for years. Check the fees the bank is charging you. Look into low cost index funds. Don't let complexity or lack of knowledge hold you back from financial freedom. Take the time to learn to make better decisions and know that investing isn't hard at all in today's world with things like index funds. Now, if you like this video, if you want to go deeper, Mindvalley's summit for the month of November 2024 is going to be called Financial Freedom Summit. And what we are going to be talking about are various ways to grow money. So we'd be looking at all manner of investments, investing in property, investing in stocks, investing in index funds, plus other ways to manage money. These are important financial literacy skills that everyone needs. I did not have access to these skills until my 40s and I so deeply regret that I always thought that this was too hard or too boring. It's so vital that we get these skills out to more people. So if you find this idea interesting, check out Financial Freedom Summit Happening on MindValley November 15 to 17. It's free. Sign up and we're going to have an incredible array of teachers who are going to be speaking. This is all going to be on Zoom for free. And there'll be a number of different lectures you can attend where you can learn all about investing and growing money. Thank you so much.
