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$ ETF INVESTING Low Maintenance & Stellar Returns

Kyle Prevost - youngandthrifty.ca

$ ETF INVESTING Low Maintenance & Stellar Returns

TABLE OF CONTENTS

Chapter 1 How Can I Make You $248,484.92, While You Chill On Your Couch?!.................................................3

Chapter 2: My Story............................................................................................................................8

Chapter 3: What the Heck is ETF?......................................................................................................10

Chapter 4: Why Most People Can't Beat The Average and Why You Shouldn't Try..........................13

Chapter 5: Why ETFs Kick Mutual Funds' Butt!..................................................................................22

Chapter 6: What ETFs Belong In My Portfolio....................................................................................31

Chapter 7: Exotic ETFs........................................................................................................................37

Chapter 8: Potential Drawbacks of ETF Investing and How To Minimize Them................................38

Chapter 9: Getting Started With ETFs In 99 Minutes or Less.............................................................41

Resource Page....................................................................................................................................43

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Kyle Prevost - youngandthrifty.ca

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$ ETF INVESTING Low Maintenance & Stellar Returns

Chapter 1

potato" investing, I thought it was appropriate if sensationalistic. So here's the deal guys:

How Can I Make You $248,484.92, While You Chill On Your Couch?!

If you're looking for the Holy Grail ETF trading formula that allows you to make millions overnight without any work at all ...

I feel guilty for even using a headline like that (what does it even mean without context?), but it is actually true! The way I arrived at that seemingly random (yet oddly attractive) number is by taking the average of the S&P 500 over the last 200 years ? 10.4% (rounded to 10%) and subtracting the average fees that mutual funds charge (a Canadian-specific 2%).

then you had really better look someplace else! While some people are attracted (or even addicted) to claims of semi-magical methods of how to quickly gain wealth, I'm hoping that you are the type of responsible person that is looking to maximize their investment dollars without having to pore through piles of income statements and balance sheets every night.

I then made up a random investor whom I determined would be a great test case. This "Investor X" would start saving at 20 years old and save $100 a month for 40 years. By investing with ETFs Investor X would have $584,222.17 when they turned 60 (assuming non-taxable compound interest). If they invested in aboveaverage mutual funds that matched the market average, they would have $335,737.25.

The difference gave me your headline, and since investing in ETFs has literally been labelled "couch

If this sounds like you, then congratulations on taking the initiative to put yourself in the driver's seat of building your portfolio and guaranteeing yourself a bright financial future.

Enjoy Life, Let Your Money Take Care of Itself

I can confidently say that I have plan for efficiently growing your nest egg and it won't take you away from your spouse or children for weeks at a time. It allows you to gain the benefits of being invested in stocks, without all of the risk normally involved. If this sounds

Kyle Prevost - youngandthrifty.ca

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$ ETF INVESTING Low Maintenance & Stellar Returns

like something you'd be interested in, then please, read on to become an expert on the world of Exchange Traded Funds (ETFs). If you're looking for "PENNY STOCKS THAT WILL YOU MAKE MILLIONS" then do yourself a favour and just go light your money on fire (the warmth will give you more pleasure than watching your portfolio spontaneously combust).

of financial analysis and investing instincts that is almost impossible to replicate, and definitely not without a substantial business acumen. Instead, I would advocate for an approach based on ETF investing, where you are guaranteed to enjoy the high Return On Investment (ROI) of the asset class, without all of the inherent risks that come with trying to be the next "Oracle of Omaha" (Buffett).

Here are the cold, hard, facts about the stock market and investing in equities (stocks). If you can confidently predict which companies hold a competitive edge in their sectors, and identify that they are undervalued, you CAN make a lot of money in the stock market. It's mathematically possible you could average yearly gains of 1520%. Just remember, that when you buy a stock, someone is selling that same stock, and they are fairly certain that they are getting the better of the deal.

Now if you're sure that you're the next Warren Buffet, Charlie Munger, or George Soros, then I seriously need you to pay me something for this book. I know I said it was free, but if you're guaranteed to be a billionaire, then I really deserve something for it don't you think? In all seriousness, guys like Warren Buffett are able to identify undervalued companies through a combination

My Grandma Versus Warren Buffett

I recently read an anecdote by a guy named David Chilton who wrote the personal finance gospel "The Wealthy Barber." The brilliant example he gave is the best argument for ETF investing that I have ever read. He used his mom as part of the story and explained that she was the perfect example of someone who knew nothing about investing. Chilton wrote that the simple truth was that if his mom was in an investing competition with three brilliant stock traders (say Buffett, Soros and Munger), and they each picked stocks from the

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Kyle Prevost - youngandthrifty.ca

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$ ETF INVESTING Low Maintenance & Stellar Returns

same pool until they were all gone (think of it as a hockey pool for finance guys), then her chances of beating any one of these three gentleman was almost zero; however, by simply purchasing an ETF of the entire market that they were all investing

By simply deciding to spend 20 seconds on her investment decision, Ms. Chilton would have assuredly beaten one (and quite possibly two) of the greatest investing minds of all time!

in, she was guaranteed to equal or beat at least one of these investing legends and possibly two.

Obviously this example is very artificial, but the principle of someone who spends 30 minutes a

If these four investors were the only investors in the whole market then there will likely be "winners and losers" between the four investors.

year on their investment portfolio consistently beating out some very smart people is not only realistic, it's a statistical certainty!

Now common sense says that if they were picking

stocks the results might look something like: Ms. Chilton -20%, Buffett +12%, Munger +10%, and Soros +8% (assuming the market as a whole had

I Can't Promise "Get Rich Quick" Just "Get Rich Eventually"

a 10% ROI). After all, this is what these men do professionally, and they have proven themselves to be amongst the best in the world at it.

This eBook won't make you rich tomorrow. In fact, if you haven't already gotten a handle on personal finance basics such as steering clear of consumer

IF Ms. Chilton decides to simply buy an ETF of the whole market though, now these investing legends are battling against each other for their gains. Ms. Chilton would now be guaranteed 10%.

debt, and saving a sizeable portion of your income, then the information won't really help you much at all. I could tell you it would, and then try to sell you some land I recently purchased near Vegas...

If we believe that Buffett is a genius and hits a low (for him) 15% gain, then statistical averages tell us that at least one of other two investors ? Soros and Munger, must be a "below average investor" in this mock market we have set up.

This is a guide for practical investors that want to see their money grow, yet want some assurances that they won't suddenly lose everything. Most people I know want to make sure they are comfortable in retirement, and want to start

enjoying that

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