Where You Should Invest Your Money TODAY To Become a Millionaire | Ray Dalio

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0:40What have you found are the top places that people should be investing? First, calculate how many days, weeks, months, or years you can live on your saving. Because when you do that, you'll gain security. So look at how much you're spending, okay, and then say, how much do I need? And whatever that number is, you're going to need more than that because it may go down rather than go up. So, okay, now do I have a year spending? You start there. Then you start to think, what are the things that are most important for me? like and then you start with your business or your residence that have a symbiotic relationship and that you know well.

1:27If you'd start with your business, okay, you're closer to that investing in yourself with whatever that may end up being. That may be your best investment. I really think there's something good about your home, a basic thing about your home, because it's nice forced savings. It also means you fix it up, you're saving, you find out there's, oh, well, if I add this thing or that thing and you're enjoying it. So when you're enjoying it and you're controlling it and it's yours and so on, that's pretty good. And if, you know, if they keep mortgage tax deductions and so on, you know, there might be some benefits to it also.

2:08Okay. But that's not a black and white answer. So you could take a short pencil and say, is it better to rent or buy? Okay, that's a different question. But by and large, am I going to move? All of those other questions. So when you start with, okay, what is it that's close to home and how much? You need a certain amount that's liquid. In other words, you got it in your house. You got to make a mortgage payment or something. And all of a sudden, it's not liquid and you lose your job. Well, that can cause you trouble. So how much do I have that's liquid? How much do I have that's not liquid? OK, and you start to get those things right.

2:48Pretty soon you're getting yourself in good shape. You do those things, you know, you're pretty much in good shape. And then you're also having some experiences and then you go beyond that. OK, what's a stock? What's a bond? And then, you know, you learn through experiences. I learned through my experiences. I started when I was a kid, 12. I used to caddy. And I took my caddying money and I put it in the stock market. I bought the only company that I ever heard of that was selling for less than$5 a share. I was really dumb. I thought, I'll buy more shares. So if it goes up, I'll make more money.

3:25And it was the only company. It was a company that was about to go broke, but some other company acquired it. And it tripled. And I thought, ah, it was an easy game. And I like it. Easy money. You know, you experiment and you learn. What's the greatest gift a rich person or someone with money can give someone who doesn't have money? To give the knowledge, teach a man how to fish is better than to give him a fish. I mean, I think you can give him both. If I can give you the capacity to go out in the world, it's like go into a jungle. I give you a knife and can you live in the jungle? Okay. If I give you that capacity, that's the best thing I can give you.

4:05But if you've got money, you can help people a lot in a lot of different ways, which is thrilling. What would you say then are the three greatest skills that people that aren't financially abundant or that are struggling financially should learn to master in order to be in a better position financially? I know so many people who don't earn much but are there. Because if you start to think about what it is that it costs you to live in terms of, let's say, the basics. Give me a bed to sleep and give me the food. Let me be educated and so on and so forth. I think most people can get themselves in a position where they're net positive.

4:51You know, that's number one. You know, the second is, you know, what do you do next in terms of what do you need? What do you invest in? And then going beyond it. And then avoid the following mistake, the most common mistake of investing. Thinking that the investment that did good is a good investment. People rather more expensive. Quite often, those markets that did really well became more expensive. And everybody, smart money, is all the time comparing them and competing. So what happens is the naive money buys the thing that was hot or is hot. The thing that has been terrible, which might be the thing that's beaten down.

5:36Here's another one that's really important. Diversify. So don't put all your eggs in one basket. Right. Because what I learned about this, first of all, all investments compete. And it's not easy to tell whether one investment is better than the other. Because if people could do that, life would be easy and everybody would make a ton of money. And this is a competitive game that's very difficult to compete in. So it's very difficult to say which one's better or worse. You can take experts and you can do all sorts of tests and you'll find out that they can pick that and you can't tell whether the worst ones are going to be better.

6:10So because of that, you understand that even picking the best ones is difficult, particularly if you're naive. Like we spend hundreds of millions of dollars each year on research to try to give us an edge. Now, you've got to compete with us. Competing in the markets is more difficult than competing in the Olympics. You wouldn't think I'm going to compete in the Olympics, but there are more people who try harder in order to do that. So it's a zero-sum game. But diversification, that they're different, will reduce your risk without reducing your return. So if you know how to diversify well, that's critical.

7:03I have a brand new book called Make Money Easy. And if you're looking to create more financial freedom in your life, you want abundance in your life, and you want to stop making money hard in your life, but you want to make it easier, you want to make it flow, you want to feel abundant, then make sure to go to makemoneyeasybook.com right now and get yourself a copy. I really think this is gonna help you transform your relationship with money this moment moving forward. We have some big guests and content coming up. Make sure you're following and stay tuned to this episode of The Daily Motivation Show.

7:44Thank you so much for listening to today's episode of The Daily Motivation and I hope you have an amazing rest of your day. If you enjoyed this episode, make sure to click the link in the description that will take you to the full episode of our main podcast on the School of Greatness. And if you are loving the daily motivation, please follow us over on Apple Podcasts and Spotify and leave us a review over on Apple Podcasts right now. And if you want more exclusive content and ad-free listening experience, make sure to subscribe to our Greatness Plus channel on Apple Podcasts right now. And if you want to get even more inspiration from our world-class guests and learn how to improve your life and take it to the next level, then make sure to sign up for the Greatness newsletter and get it delivered right to your inbox over at greatness.com slash newsletter.

8:34Again, have an amazing day, and I'll see you tomorrow with another episode of the Daily Motivation Show.

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