---
title: 'Millionaire Explains: How to Invest for Beginners in 2026'
source: 'https://youtube.com/watch?v=Jd8Xv1v51vU'
video_id: 'Jd8Xv1v51vU'
date: 2026-06-30
duration_sec: 1417
---

# Millionaire Explains: How to Invest for Beginners in 2026

> Source: [Millionaire Explains: How to Invest for Beginners in 2026](https://youtube.com/watch?v=Jd8Xv1v51vU)

## Summary

This video presents a beginner's guide to investing, using an extended analogy comparing stock selection to dating. The speaker advocates for a long-term, fundamentals-based approach over short-term trading, and explains how to analyze a company's financial health through its balance sheet, income statement, and cash flow statement.

### Key Points

- **Core investing philosophy: treat it like finding a partner** [0:00] — When you buy a share, you become a part-owner, forming a partnership with the company. You want a long and successful relationship.
- **Two main strategies: technical vs. fundamental analysis** [1:00] — Technical analysis (day trading) is for short-term, pattern-based gambling. Fundamental analysis is like being a detective, examining reports, brand, and leadership to find long-term value.
- **Using the balance sheet as a company's profile** [3:00] — The balance sheet is a snapshot of assets, liabilities, and equity. A simple test: total current assets ÷ total current liabilities should be >1 to ensure short-term debt coverage.
- **The income statement: the company's report card** [6:32] — Shows revenues and expenses over a period. Calculate operating income ÷ total revenue × 100 to find profit margin (5% low, 10% healthy, 20% high). Coca-Cola operates at ~25.7%.
- **Cash flow statement: the company's money management** [9:52] — Three parts: operating (positive = good), investing (negative = reinvesting), financing (watch debt & dividends). Avoid companies paying high dividends with negative cash flow.
- **Qualitative analysis: beyond the numbers** [12:20] — Assess brand recognition, leadership quality (e.g., CEO's influence on stock price), and competitive advantages (patents, moats). Example: Apple vs. Xiaomi brand trust.
- **When to sell: based on personal circumstances** [16:47] — Sell during a financial emergency, after hitting a personal goal, or when you no longer believe in the company's fundamentals. Don't panic-sell on news (e.g., Facebook after Cambridge Analytica).
- **Building a portfolio: value vs. growth stocks** [19:10] — Value stocks (stable, dividends, low P/E) vs. growth stocks (volatile, no dividends, high P/E). Diversify with at least 25 stocks across 5 sectors and 2 countries. Use a cash ISA for tax-free savings.

### Conclusion

The video reinforces that successful investing requires patience, thorough research, and emotional discipline, much like a healthy relationship. Ultimately, long-term, diversified investing in fundamentally sound companies offers the best chance for financial security.

## Transcript

this is the best piece of advice I've
ever heard about investing it came from
a millionaire I looked up to as a kid
after over hearing him talk about
investing I wanted to get involved but
as a complete beginner I didn't know
where to start so I asked him how do I
pick the right stocks to invest in his
answer was very simple treat it like
finding a girlfriend this is quite a
clever way to look at it because when
you buy a share in a company you
actually become a part owner this is
like a partnership between you and the
company and just like a relationship you
want to make sure it's happy long and
successful but look I'm not going to
pretend that there's a crystal ball that
can tell you when to buy a stock before
it rockets in value like most of the
fake gurus online however there are
certainly a few things you can do to tip
the odds in your
favor when you're looking for a partner
you need to have a strategy in mind are
you going to shower them with gifts like
a s or treat them mean to keep them Keen
you'll get very different results
depending on which strategy you choose
and the same goes for stocks so just
like dating you need to figure out how
you're going to approach the stock
market so that you get the results you
want there are two strategies you can
choose from the technical or the
fundamental approach both of these
options are very different so let's
quickly go over what they involve
technical analysis is mainly for
short-term day Traders they use charts
and price action to identify patterns
that supposedly help them predict if a
stock is going to go up or down in the
short term I use the word supposedly
because in my opinion most of the people
using this strategy are glorified
gamblers is it possible to day trade
successfully yes but more than 95% a day
Traders lose money rather than making it
according to the modly fold fundamental
analysis is like being a detective for a
company you look at everything from
their financial reports to how well
known the brand is and who's running the
show all these pieces of information
help you understand how the company is
doing now and how it might perform in
the future this approach can help you
pick a range of stocks that can make you
a nice amount of money over a 3 to 10e
period I know saying this will probably
ruin my watch time but I only want
people getting into this for the right
reasons so if you're looking for a way
to get rich quick then stop watching my
video now my goal is to secure your
financial future not just help you make
a quick Buck also remember with any kind
of investing your money can go down as
well as up if you're still with me then
comment down below I'm in so I know how
many of you are willing to invest for
the long term right all done cool let's
jump
into when you're on a dating app and
checking out someone's profile you
usually look at their pictures and read
their bio to see if they'd make a good
match it's exactly the same when you're
thinking about investing in a company
you have to check out the company's
profile which in this case is something
called a balance sheet a balance sheet
is a financial statement that provides a
snapshot of a company's financial
position at specific point in time it
details the company's assets liabilities
and share holders Equity don't worry if
that sounds a bit confusing we'll take a
look at one together and I'll break it
down with you I'm going to be using
trading 212 to do this which is a great
place to research and buy stocks you're
welcome to download it and follow long
trading 212 is also sponsoring this
portion of the video and if you use the
code Tilbury you'll also get a free
fractional share worth up to £100 when
you open your account I'll put the link
in the description plus you can get more
free Stocks by inviting your friends
both of you will get a free share as
long as they fund their account I'm
going to be using their desktop website
for this video but you can do all of
this on the mobile app if you want to
for everyone in the USA you can find the
same information on Yahoo finance
remember that nothing in this video
should be taken as Financial advice I'm
not a financial advisor and when
investing your capital is at risk so to
find a balance sheet just head to the
stock you're interested in for this
example I'm going to pick coca
colola scroll down the page click on the
financials and then the balance sheet
and more financials this pulls up a
pretty complicated looking page but
trust me it is actually very simple to
help you understand this balance sheet
think of it like a like a cookie jar
there you go at the top you've got the
current assets these are like the
cookies you can grab and
eat M very nice for a company this is
the cash or anything that can be turned
into cash within 12 months next you have
the longer term assets these are like
the cookies that are deeper down in the
jar for a company this often includes
the headquarters and Equipment here you
have the intangible asset
these are like the invisible things that
make the cookies taste good you can't
touch these things but they bring a lot
of value for a company this is patents
intellectual property trademarks and
Goodwill this next section is all about
liabilities these are like the cookies
that you've promised to your friends for
borrowing their ingredients I'm most
interested in the current liabilities as
these will need to be paid back within
one year or a normal operating cycle so
so now you know what all of this
information means what should you
actually do with it well there's a
simple calculation you can do to easily
know if a company is high risk or not
and that is total current assets divided
by total current liabilities A good rule
of thumb is this number should be above
one but how does this actually work in
practice well let's put Coca-Cola's
numbers in their total current assets
are 26.7 3 billion do so if we divide
that by their total current liabilities
which are
2357 billion that comes to approximately
1.13 this means the company has
$1.3 in current assets for every $1 in
current liabilities indicating they have
enough short-term assets to cover their
short-term debts this is a great
indicator but our work is far from over
H when you're getting to know someone
new you're probably curious about their
past relationships it's like doing a bit
of a background check right you might
wonder whether they've ever cheated or
how many partners they've had it's
pretty much the same when you're
considering investing before you put
your hard-earned cash into a company you
want to check out his track record
that's where the income statement comes
in and unlike people public companies
have to be upfront and honest about
their past an income statement is like a
report card for a company showing how
well it did over a specific period like
a month a quarter or a year put simply
it tells you how much money the company
made and how much it spent this is
normally found in the same place as the
balance sheet if you're using the
trading 212 app like me then just click
on the first Tab and then you'll see all
the information here at the top we have
the total revenue which is the toal
total the business took in the time
period as we can see from Coca-Cola they
took
45.75 billion in
2023 which isn't too shabby if we scroll
down a bit we get to the net income
which is the money the company makes
after all expenses have been deducted
for cocacola this is
10.71
billion so why does this matter well
every business has two main types of
expenses the cost of Revenue and the
cost of operations if either of these
are too high then it could be a red flag
just think about it if you were selling
custom t-shirts you'd have to spend
money on fabric and printing this is
your cost of Revenue as you can't create
custom t-shirts without these materials
so this is a necessary expense but
that's not it you'd also have to spend
money on marketing and potentially staff
these are known as your operating
expenses once you subtract both the cost
of Revenue and the operating expenses
from the total money you make from
selling your custom t-shirts you get
your operating income now if you just
scale up that example it's the same idea
for big companies like cocacola see here
this is the operating income so now you
know what all this information means
what should you actually do with it well
here's a simple calculation to see if a
business is making a healthy amount of
profit operating income divided by total
revenue time 100 according to tide
banking as a rule of thumb 5% is a low
profit margin 10% is a healthy margin
and 20% is a high margin if we plug
Coca-Cola's numbers into this
calculation we get
approximately
25.73084 established companies will be
more profitable than newer faster
growing companies so profitability isn't
the most important thing I mean Amazon
took years to make a profit and look at
them now but saying this you should also
keep in mind that a company that's done
well in the past doesn't mean that it'll
continue to do well in the Future Past
performance doesn't guarantee future
results listen it might not sound like a
romantic thing to say but if you're
thinking of getting involved with
someone you don't want want them to be
bad with money it can lead to a whole
lot of headaches down the line trust me
in fact money issues are a huge reason
why relationships break up the same goes
for companies you don't want to invest
your money in a company that can't
handle it correctly that's why you need
to check out their cash flow statement
cash flow statement shows how much money
is coming in and going out of a company
over a period of time is divided into
three parts operating activities
investing activities and financing
activities they sound confusing but
trust me they are super simple let's run
through them one by one and I'll let you
know what to look out for operating
activities show the money a company
makes from its regular business
operations in Coca-Cola's case that's
selling their various beverages all you
need to look for here is a positive
number like this it means the company is
making more money than it spends on its
day-to-day operations this is a good
sign investing activity shows the money
the company spent on investments like
buying their equipment buildings or
other companies it also includes money
made from selling those kinds of
Investments believe it or not this
negative number here isn't a bad thing
this is because the company is
reinvesting back into the business I
always like it when I see that a company
is investing wisely in their future just
be cautious that they're not spending
too much or selling off lots of assets
financing activities is about the moneyy
a company borrows or gets from selling
pieces of the company and the money it
uses to pay back loans or give rewards
to stock owners in the form of dividends
it's very important for you to keep an
eye on how they're managing their debt
and dividend payments be cautious if
they rely too much on borrowing and if
they're paying high dividends with a
negative cash flow it's like if you won
a chunk of money and stopped working and
then kept giving all your friends
expensive gifts it's it's just not
sustainable and eventually you'll run
out of cash however this isn't the case
with cocacola because even though they
gave away
$7.95 billion worth of dividends to
their shareholders it's safe to say with
that kind of positive cash flow they can
afford
it have you ever been really attracted
to someone online who seems perfect on
paper but when you finally meet them you
don't don't feel that spark this could
be similar to stocks a company may
appear to be a good investment Based on
data but there are factors that
spreadsheets just can't capture that's
why you need to cross-examine with
something called qualitative analysis
this basically means checking out things
that aren't numerical like how well
known the company is how loyal their
customers are and how happy those
customers are with that company so yeah
it's not all about the numbers you need
to seek out this information from
sources that aren't as easy to find and
really embody your inner Sherlock Holmes
so what information should you be
looking for and how can you find it when
it's not immediately obvious well there
are three key things you need to keep an
eye on the first thing is brand
recognition if you went to a bunch of
people in the street and said tell me
what you think about Apple you'd
probably get mostly positive responses
about their product quality and good
privacy reputation I mean most people
out there own an Apple device and
they've built a very strong customer
base but what if I ask you about a brand
that wasn't as popular like XI you'd
probably get a lot more blank stairs
especially in the UK If you haven't
heard of it it's a Chinese tech company
so just through those two examples there
is a clear contrast between the two and
I'd say 99.9% of you would rather invest
in Apple stock just based off its brand
recognition even though zi is a major
player in China and Emerging Markets
with a growing customer base but why is
this well companies with a strong brand
recognition have built up a lot of trust
with their customers meaning that
they're less impacted by any competition
therefore minimizing your risk as an
investor it's like the King on a
chessboard every move revolves around it
and its position is Central to the game
making it Irreplaceable the second key
thing to check out is the company's
leadership you can find all this
information by researching the company's
board of directors reading transcripts
of earnings calls and checking out the
executives LinkedIn profiles however
it's not only important to know who
these leaders are but how long they've
been working there in general the longer
they've been in charge the more
knowledgeable they are meaning the more
successful they're likely to be in
addition to this lots of CEOs have big
followings now on Twitter however this
comes with both pros and cons with the
power to influence Millions with just a
tweet it can send stock prices to the
moon or crashing back down I mean back
in 2016 Donald Trump tweeted the F35
program and cost is out of control
billions of dollars can and will be
saved on Military and other purchases
after January the 20th that F35 program
was a locked Martin project after that
tweet loed Martin's stock price took a
nose dive the company's shares fell by
2.5% on the same day wiping out nearly
$4 billion do in market value so it's
becoming more important than ever to
invest in companies with a sensible CEO
otherwise the wrong tweet could lead to
a very bumpy ride the third important
thing to research is any competitive
advantages so this can be things like
patents law customer bases or disruptive
business models these advantages set
them apart from the competition helping
them make more money and grow their
businesses faster over time for example
Tesla has managed to secure a
competitive advantage through
cuttingedge electric vehicle technology
and an expansive charging Network these
competitive advantages are like gold for
investors because it means lower risk
and bigger potential rewards you'll be
able to find all this information on the
company's website and and also through a
good old Google search it's time
consuming yes but understanding these
aspects could make or break your
investment remember research is your
best friend it's better to spend a
couple of weeks researching rather than
make a rushed investment and have it
backfire let's say you hear a nasty
rumor about the person you're seeing you
might panic and dump them without
getting to the truth this is what so
many people do when they hear bad news
about the company they've invested in
they rushed to sell it without actually
giving it any proper thought they just
act on emotion the news is actually so
powerful think back to when the news
broke that we might see empty shelves in
the supermarkets what did everyone do
they Panic bought toilet rolls until
they really did run out the Panic buying
just made the situation so much worse
just imagine if that wasn't reported on
the news there wouldn't have been
panicked buying and toilet rolls
wouldn't have sold out in every store
the news has the same power over
investors too and can cause abrupt
surges in stock prices but more often
than not it causes extreme Panic selling
one example of panic selling is when the
Cambridge analytica Scandal broke in
March
2018 and personal data was unethically
taken causing Facebook stock to plummet
nearly 18% in just 10 days as investors
reacted to the the news of data misuse
but as we can see if we zoom out since
then the stock has gone up by more than
200% this was just a blip on the radar
and long-term investors that understood
that held strong because they were
confident in their research so if the
news is full of fear monring then how do
you know when to actually sell a stock
well there's a few occasions when you
should sell a stock and this might not
be what you're expecting to hear but
these occasions actually depend on you
and not the stock market for example if
you find yourself in a financial
emergency and don't have any emergency
fund to fall back on then I'd advise you
sell your shares to get yourself out of
that sticky situation or on a more
positive note maybe you've hit a
financial goal and you'd like to take a
vacation I wouldn't normally suggest
this to people but if it's a figure at
which you would feel satisfied selling
the stock ad then do it and enjoy your
gains the last reason to sell a stock is
when you no longer believe in the
fundamentals of the company and their
future trajectory in this case it may be
time to cut and
run when looking for a partner you don't
want to settle with the first person you
date it's important to explore what
different people have to offer some may
seem perfect but are too self-absorbed
While others may have a great potential
the same concept applies when building
your Investment Portfolio the main types
of stocks are value and growth it's
beneficial to understand both so you can
decide whether to focus on just one type
or mix and match value stocks are
normally shares in big well-known
companies these companies have a few key
features first their stock prices are
considered lower compared to other
companies in the market they also have a
low price to earnings ratio which means
they make good money compared to their
stock price addition they're stable and
they don't have wild ups and downs in
their stock prices and they pay
dividends which essentially means they
regularly give some of their profits
back to their investors value stocks are
often found in companies that people
rely on even when times are tough like
during a recession for example these
companies make or provide things that
people need no matter what examples
include Consumer Staples which are
everyday products like food and
household items energy companies that
provide Fuel and power financials like
Banks and Industrials that build things
and provide raw materials some
well-known examples of value stocks are
Burkshire Hathaway which is owned by
Warren Buffett and invest in many
different companies proor and gamble
which makes everyday products like
shampoo and toothpaste and JP Morgan a
major Bank grow stocks on the other hand
are usually seen as overvalued compared
to the market they tend to be pretty
pretty volatile meaning their stock
prices can go up and down a lot these
stocks have higher price earnings ratios
this means that investors expect them to
grow a lot in the future and they pay
little to no dividends some growth
stocks aren't even profitable for a long
time as they reinvest their earnings to
fuel further growth growth stocks are
expected to grow at a more rapid Pace
than the overall Market which is why
they often outperform the market some
well-known examples of grow stocks
include Amazon meta platforms Nvidia and
Tesla if you're not sure of the stock is
growth or value then a quick way to tell
is by using the PE Ratio you can easily
find this here on trading 212 typically
the average PE ratio is around 20 to 25
anything below that would be considered
good whereas anything above would be
worse however this is just a general
rule of fun and does vary depending on
the industry so make sure to compare it
with some other companies in that sector
once you've determined whether you're a
value growth or mixed investor you need
to ensure you have a diverse range of
stocks in your portfolio this is what we
call
diversification so if one of your stocks
takes a dive you're banking on the
others to balance things out a general
rule is not to have more than 5% of your
money in one stock and no more than 20%
of your investments in one sector such
as Tech technology for example it's a
good idea to have stocks in at least
five different sectors a minimum of two
countries and more than 25 different
stocks in total you could also look into
having a cash Isa too which is basically
just an individual Savings in the UK
which allows you to save money and earn
tax-free interest at the moment trading
212 seem to have one of the highest
paying cash ises right now at
5.2% so if you've already used code tilb
or the link in the description to pick
up your free fractional share worth up
to £100 then all you have to do is go up
here and they'll walk you through the
process if after watching this video you
think picking individual stock seems too
time consuming then there is a way you
can cut out pretty much all the research
and in a lot of cases get even better
results if you want to understand how I
make around
$177,000 a week using Index Fund
investing then you should watch this
next video where I explain everything in
detail but don't click on it just yet
make sure to subscribe if you want to
grow your wealth okay I'll see you over
there