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Revealing ALL My Investments at 27

2021-08-15 · Long video (solo, talking head or whiteboard) · Ali · recording, 25:55 · watch on YouTube

Topic: Money and investing (also: YouTube, writing online and creators) · mode: Explanation and tutorial · tags: His own numbers, His own products discussed, Family

Ali reveals his whole investment portfolio at 27: about £300,990 in stocks and shares (90% in the S&P 500, 10% dabbling in individual stocks), about £92,900 in crypto, £85,000 of equity in his flat, small angel investments and almost no cash, and argues that YouTube videos and online courses are his best-returning asset class.

What is said

The parts of the video and what is said in each (★ — how much it matters to the video).

00:00:00 — Caveats: not financial advice, no flex, a long game built over 13 years

  • ★ Ali talks candidly about his money because he thinks it is a net positive for more people to talk about money. — 00:00:58
  • ★★ Ali has made money on the internet since the age of 13; after seven years of failed businesses, he built a business that succeeded at 19, in his second year of medical school. — 00:01:27
  • ★★ Ali says building wealth like his is a long game, not a get-rich-quick scheme, and tells people at the start of their journey not to be disheartened that it takes a while. — 00:01:56

00:02:18 — Stocks and shares: index funds with Charles Stanley Direct and Vanguard, individual stocks on Freetrade, lessons

  • ★ Ali invests in two kinds of stocks and shares: index funds and individual stocks. — 00:02:18
  • ★★ Basically all of Ali's index-fund money is in the S&P 500, an index fund of the 500 biggest US companies weighted by market cap: of $1,000 invested, about $40 goes to Apple, $30 to Google, $20 to Microsoft and $20 to Amazon. — 00:02:47 · Apple, Google, Amazon
  • ★★★ Ali invests in index funds because Warren Buffett and every financial-advice book he has read say so: there is no point trying to pick individual stocks to beat the market. — 00:02:47
  • ★★ Ali has put £75,959 into his ISA with Charles Stanley Direct, maxing it out every year since 2015; an ISA is a UK tax-free wrapper taking £20,000 a year, with tax-free gains. — 00:03:29
  • ★★ Ali's Charles Stanley Direct ISA is now worth £124,960, a gain of £49,000 over six years of paying in and forgetting about it, which he calls staggering. — 00:03:58
  • ★ Ali started investing in 2015 because until then any money he made sat in his bank account losing value to inflation every year. — 00:03:58
  • ★ A few years ago Vanguard opened its investment platform to UK retail investors; Ali calls Vanguard probably the biggest, most reputable company for index funds. (hedged) — 00:04:27
  • ★★ At Vanguard Ali has an ISA, with £60,000 paid in over three years, and a taxable general account, which UK investors use once the ISA is maxed out and whose gains are liable to capital gains tax. — 00:04:57
  • ★★ Ali's Vanguard ISA has made £13,000 on the £60,000 he put in; into his Vanguard general account he has put around £55,000, now worth £74,000. (hedged) — 00:05:27
  • ★★ Ali calls index-fund investing a set-it-and-forget-it thing: you put money in and forget about it, and he never even looks at his account. — 00:05:27
  • ★★ Ali has £148,329 in his Vanguard accounts, entirely in the S&P 500, of which £33,800 is gains. — 00:05:52
  • ★★ Ali has £27,794 in individual stocks on Freetrade, up £7,700 since he started. — 00:06:45
  • ★★ Ali has invested in individual stocks on Freetrade since December 2020, about eight months; his holdings include Tesla, Shopify, MP Materials, the NASDAQ 100, Netflix, Teladoc, Fastly, Fiverr, Etsy and MongoDB. — 00:07:11 · Tesla, Netflix
  • ★★★ Ali has actually lost money on the individual stocks he picked, his only gains coming from free shares: £2,000 in Teladoc is now worth £1,300, down 34%, and £2,000 in Fastly is now £1,200. — 00:07:41
  • ★★ Ali says a retail investor like him cannot feasibly beat the market against institutional investors with big computers who pick stocks full time, which is why financial books and Warren Buffett say to just invest in index funds. — 00:08:15
  • ★★ Ali says he has never lost money on index funds because they track the market, and the market always goes up. — 00:08:56
  • ★★★ Ali treats individual stocks as a fun side thing, fully expecting not to beat the market: 90% of his stocks and shares are in the S&P 500 index fund and 10% he dabbles with on Freetrade. — 00:09:25
  • ★★ Ali's first lesson: start investing earlier; his successful business made money from 2013–14, but he left it in his bank account for two years before investing because investing felt hard and risky. — 00:09:25

  • ★★★ Ali's second lesson from six years of investing: you cannot time the market, so do not try; time in the market matters more than timing the market. — 00:10:06

    “time in the market is more important than timing the market”

  • ★ An unnamed friend whom Ali urged to open an investment account 18 months earlier never did, and missed about a 60% gain. — 00:11:02

  • ★★ Ali says putting in the first $100 or $1,000 is often the hardest part of investing; after that it becomes very easy to top up your investments over time. — 00:11:02
  • ★ To anyone who has been meaning to start investing, Ali says the best time to start was 10 years ago and the second best time is now. — 00:11:51
  • ★★ In total Ali has about £300,990 in stocks and shares, mostly in the S&P 500. (hedged) — 00:11:51

00:12:20 — Crypto: the 2017 losses, the recovery, weekly buying and three lessons

  • ★★ Ali started investing in Bitcoin around 2017 as the market rose, lost a lot in the crash and had to sell at a loss to afford the deposit on the flat he lives in; for four years his crypto was about $60,000 down. — 00:12:20
  • ★★ After a recent crypto rally Ali's crypto portfolio is worth £92,903, a 7.8% gain: he has made £6,700 from crypto over four years. — 00:12:49
  • ★★ Ali now sets and forgets his crypto: a weekly order buys some Bitcoin, Ethereum and Cardano, dollar-cost averaging, with no intention of selling for a very long time. — 00:13:18
  • ★ Ali holds £4,000 in Litecoin and £3,000 in Cardano, both doing badly, and £500 in Dogecoin, down 50%; Ethereum, which he did not sell in 2017, has been good to him. — 00:13:45
  • ★★ Ali's first crypto lesson: do not day trade, which he calls a terrible idea; to get involved in crypto, buy and hold, because you cannot beat the market by day trading. — 00:14:14

  • ★★★ Ali views crypto as pure gambling rather than an investment, so he puts no money into crypto that he might need in the next five years. — 00:14:14

    “it's pure 100% gambling. It's not an investment.”

  • ★★ Ali's third lesson, for crypto and investing in general: do not get emotional; much of the money he put into crypto in 2017 came from fear of missing out. — 00:14:14

  • ★★ Ali now treats crypto as a rational investor by following the plan of the Crypto is Easy newsletter, whose author has done the numbers; he says it is not an affiliate link or sponsored. — 00:14:44

00:15:12 — Real estate: the flat with his brother and three rental flats in progress

  • ★ Ali's stocks, shares and crypto together are worth around £390,000. (hedged) — 00:15:12
  • ★★ Until about six months earlier Ali's only real estate was the flat he lives in, bought in 2018 on a joint mortgage with his brother for £370,000 with a £55,000 deposit; he has paid back about £30,000, leaving about £85,000 of equity. — 00:15:12 · Taimur Abdaal
  • ★★ Ali does not consider his flat much of an investment beyond its £85,000 of equity, though the rent he saves and a lodger's rent give him around a 16% return a year. — 00:15:52
  • ★★★ Ali is in the process of buying three more flats to use as rental properties and calls the paperwork an absolute nightmare. — 00:16:21
  • ★★ Ali promises a video about his rental flats once the purchase is sorted; for now they are still in the paperwork stage, working out how to get buy-to-let mortgages under a limited company. — 00:16:50

00:17:20 — Angel investments in four companies

  • ★ Angel investment, Ali explains, is when an individual investor invests in early-stage startups; he finds the name a bit self-aggrandising. — 00:17:20
  • ★★★ Founders have emailed Ali through his channel seeking investment, and he has invested small sums in four companies: Riverside, Peek, StudyStream and Heights. — 00:17:20
  • ★★ Ali angel-invests especially in products he already uses and likes, after speaking to the founders and seeing their pitch deck. — 00:17:20
  • ★★ Ali has used Riverside to record his podcast for the last year; he reached out to its founders and invested in the company. — 00:17:20
  • ★ Ali says a video about Riverside is coming at some point soon. — 00:18:02
  • ★★ Peek, a fairly new UK company making reading a more social experience, reached out to Ali; he invested and will use its product extensively once it is out of beta. (hedged) — 00:18:02
  • ★★ Ali invested in StudyStream, a live co-working platform whose model he thinks is really great, and recently in Heights, a brain-care supplement he has been trying, after becoming friends with its founder. — 00:18:31
  • ★ Ali says YouTubers such as Casey Neistat and Marques Brownlee are big angel investors who do not really talk about it on their channels. — 00:18:31
  • ★ New to angel investing, Ali invests in companies he thinks are cool and tries to add value to them as an adviser or by promoting them on his channel. — 00:19:11
  • ★ Ali says Graham Stephan always keeps over a million dollars in cash in the bank, ready to pounce on a real estate deal. — 00:19:11
  • ★ Ali does not really like real estate because it is slow and annoying. — 00:19:11

00:19:25 — Cash: almost none personally, a lot in the company

  • ★★ Ali carries almost no cash: any cash he has is in the business account or in investments, and he recently went into his overdraft. — 00:19:40
  • ★ Ali's personal expenses are small: tech he buys for the business is a business expense, and he mostly spends on Ralph Lauren shirts and takeaways, paid from his salary through the business. — 00:19:40
  • ★★ Ali interviewed Ben Francis, the founder of Gymshark, on his podcast, which is launching soon; Francis joked that Ali's company was hoarding cash and had to do something useful with it. — 00:20:09 · Gymshark
  • ★★ With a lot of cash sitting in the company account, Ali's business is hiring around eight or ten people, and he invites people based in London to apply. — 00:20:09 · London

00:20:39 — Digital assets: YouTube videos and online courses as an asset class

  • ★★ Ali counts digital assets as an asset class: an investment is something you put money into that then makes money for you, as stocks and real estate do, and a YouTube video does that too. — 00:20:39
  • ★★★ AdSense on Ali's channel made $121,903 in the last 90 days, and his passive income video from April alone made $47,559. — 00:21:12 · passive income
  • ★★ Ali's ultimate guide to investing in stocks, made in October 2020, made $4,800 in AdSense in the last 90 days. — 00:22:00

  • ★★★ Ali says that if an investment is something that puts money in your pocket, every YouTube video you make is an investment in yourself: evergreen content can make money for a very long time. — 00:22:29 · passive income

    “anytime you make a YouTube video, you are investing in yourself”

  • ★★ Ali says one video can make a few thousand dollars a month, while a good rental property, if you are really lucky, makes a few thousand dollars a year, so treating digital assets as their own asset class makes a lot of sense. — 00:22:58

  • ★★★ Ali's Skillshare class on editing videos with Final Cut Pro took him one day to film and a freelancer two days to edit, and makes between $2,000 and $5,000 every month without him doing anything. — 00:23:41 · Final Cut Pro, Skillshare classes
  • ★★ Ali likens investing to levelling up in a game: a beginner can only invest in stocks and shares, from $10 or $100; with more money you unlock real estate, which needs a deposit of usually 25% of the house's value. — 00:24:10
  • ★★ A creator with an audience unlocks a further level, Ali says: online courses, YouTube videos, ebooks, digital downloads and physical products, like his friend Olier's (as heard) store; a business is an asset and an investment. — 00:24:39
  • ★★ Excluding his digital assets, Ali's investment portfolio is worth about £500,000. (hedged) — 00:24:39
  • ★★★ Ali thinks more about digital asset classes than about real estate and stocks, which he sees as a fallback if YouTube crashes or he is cancelled; he thinks most gains are in the digital realm. — 00:25:08

Threads in this video

Where the stories that moved here went next

Mentioned

Central: angel investment · digital asset · index fund · S&P 500

Also: People: Andrei Jikh · Ben Francis · Casey Neistat · Graham Stephan · Marques Brownlee · Taimur Abdaal · Warren Buffett

Works: Crypto is Easy

Organizations: Amazon · Apple · Charles Stanley Direct · Fastly · Fiverr · Google · Gymshark · Heights · Microsoft · Netflix · Peek · StudyStream · Teladoc · Tesla · The Motley Fool · Vanguard

Concepts: business expenses · capital gains · dollar-cost averaging · inflation · passive income · time in the market

Places: London

Products: Bitcoin · Cardano · Dogecoin · Ethereum · Final Cut Pro · Freetrade · Litecoin · Riverside · Stocks and shares ISA · YouTube AdSense

Also centred on index fund: How to Invest for Beginners · 9 Passive Income Ideas - How I Make $27k per Week

Also centred on S&P 500: How to Invest for Beginners · 9 Passive Income Ideas - How I Make $27k per Week

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