16 years ago, my dad told me to start investing in index funds. I had no idea what they were, but I learned and I began putting money into them. Fast forward till now, and I can see why they are so powerful. They are, in my opinion, the best stock investment most people can make. And in this video, I'll show you exactly what index funds are and how to invest in them properly. This is coming from someone who allocates most of their extra funds towards this investment category. I now have millions of dollars in index funds, which is crazy to say, but I really truly love index funds, and hopefully it shows in this video. If you stay until the end, I promise you're going to become very proficient at index funds. You're going to be able to start investing in them right away. So, let's get started. I've learned a lot about index funds in the last 16 years. I'm going to teach you everything I know. Now, if you guys don't know who I am, uh my name is Charlie. I'm currently 34 years old, and like I said, I've been investing in index funds for over 16 years now. I'm a finance nerd. I love investing. And if you don't know that much about the stock market or you want to just start investing in index funds and actually know what you're doing, you're in the right place. Now, this is not a get quick rich type of investment. This is the type of boring strategy that actually works that so many people build their wealth doing. My dad really beat this into my brain and he basically said, "Spend your time trying to make more money and just invest in easy things like index funds to have it make passive income for you." So, let's first talk about what an index fund is. Because when this clicks, uh, you're going to get why I love them so much. When you buy a stock, you are basically buying a tiny slice of a company. Uh, and if the company does well over time, your slice is worth more. Now, the problem with picking a single stock or a single company is that you have to be right about which company you actually buy. And even a lot of the pro investors out there, they fail at this a lot. If you guys look at the data, it's extremely hard to beat the market. In fact, almost everyone that tries to beat the market by trying to pick stocks and get their timing perfect, they usually fail. And so my thinking is if all these people with all these degrees that are super super smart can't do it, why would I think that I possibly could do it? Especially because I don't spend that much time looking at investments, doing research, and all that stuff. And so analogy I like to say is if you pick one stock, it's like betting on one horse in a race. Whereas an index fund is like betting on the whole race. So instead of trying to just like pick winners because you'll be right sometimes but you'll be wrong a lot too. What if you just buy for example America's biggest 500 companies all at once? That's basically what an index fund does. So let's define what an index is, right? So this is a list that tracks a group of stocks. It can get a little bit complicated, but just hear me out. So for example, we have the S&P 500 and this is the 500 biggest US companies. So companies like Apple Microsoft Amazon Tesla stuff like that. An index fund is one investment that buys all of those companies at once in that index. So for example, an S&P 500 index fund, when you buy that, you are investing in a slice of all 500 companies. The really beautiful part about this is that when you do this, you have instant diversification. All the great investors talk about diversification and with one purchase you're basically able to invest in hundreds of companies. Some of them might tank, but it's totally okay because you have, let's say, 497 other companies in there. Of course, there are other types of indexes that you guys can track, right? Index funds don't need to just be the S&P 500. But we'll talk a little bit more about that in a sec. So, now let's talk about what index funds are versus ETFs versus mutual funds. And these terms can, you know, get a little bit confusing. And it took me quite a bit of time to understand this, but let's try to sort this out right now. An index fund is the strategy of tracking the S&P 500. A mutual fund is basically where you buy in dollar amounts and it trades once a day after market close. So, for example, this is going to be something like Vanguard's VTSAX. This is a mutual fund that you can invest in and it tracks the total stock market. Now, an ETF is basically like a stock, right? It's a thing that you can trade all day and you often buy a single share or a part of a share. So, this is going to be something like V or VTI. Now, for most beginners, ETFs are going to be the easiest entry points, but I know this is still a little bit confusing, so I'm going to show you guys real quick on my computer. Okay, so I have VTSAX pulled up. This is a mutual fund, aka index fund. Basically, a lot of people use these terms uh interchangeably. Now they are different but essentially what I like to think of it is an index fund can be both a mutual fund or an ETF. Those are like the two different ways to invest in an index. So like I said VTSAX this is a mutual fund. It's also available as an ETF. But let me just show you the difference. This particular one is tracking the total stock market. So every company in the US basically. And so if you look at this portfolio composition, you can see there are 3,494 stocks in this mutual fund. There's a bunch of these terms that we will learn later on, but as you can see here is the price. So currently it's $180.81. This is of course going to change depending on when you guys are watching this video. We have the 52- week high here and the 52- week low. So actually quite a bit of difference. And if you come up here, you can see uh the year-to- date return for this one has been 11.14% which is solid. It was started in the year 2000. So, it's been, you know, 26 years. And the main thing with a mutual fund is that you're not investing in different shares. Um, you are investing a dollar amount. So, as you can see, the minimum investment for this is $3,000. So, if you don't have $3,000 to put into this, you're basically going to want to buy the ETF version. And I forgot to mention the expense ratio. This is basically the fee that they charge to manage this fund. It's 0.04%, 04% which is very very low. That's why I like a lot of these mutual funds and ETFs. This essentially means that for every $10,000 you have in VTSAX, you are paying $4 per year in management fees. So basically nothing. I'm doing this because this is like the easiest way to understand the differences between mutual funds and ETFs. Now we have an actual ETF, right? So, this ETF is tracking the same exact index, the total stock market. It is basically the same exact thing as buying a VTSAX, but as you can see here, the expense ratio is just a tad lower. The price per share is $371.65 as of right now. And you can basically buy shares of this, right? So, at any time during the day when the stock market is open, you can literally pull up your brokerage account and you can buy, let's say, one share of this for about $371. You can buy two shares, you can buy partial shares, and if you want to sell it right away, you can do that. So, it's essentially like buying and being able to sell a share of a company, a normal stock. That's why this is often a bit easier for most beginners to grasp. And this is definitely what I got started with, right? I didn't have the money to buy mutual funds because some of them have, you know, pretty high minimum requirements for how much you have to invest. So, I would just buy individual shares of ETFs like this one. Hopefully that makes a little bit of sense and that really clears up the distinction between index fund, mutual fund, and an ETF. For most of you guys watching this video, I probably would just start off with an ETF because it's the easiest entry point. Now, I showed you guys the expense ratios of those two that we just covered, 0.03% and 0.04%. And the reason why these are so low is because this is a passive fund. A lot of the times when you invest in a fund, it's going to be a an active fund, which means that there's going to be a manager that actually has to pick stocks. They're always active in it, right? This is very expensive. And so the expense ratios for active funds is a lot higher since these index funds just copy the list, right? It's super super passive and it's very cheap to manage. So that's why that savings basically it's passed on to you as the investor and that's why you pay such a low expense ratio. There are funds out there that charge over 1% expense ratio which is insane. Meaning every $10,000 you invest, they are taking what? $100 per year. That really adds up quick and over many many years that compounds and you lose out on a ton of your potential returns. Since the data shows that, you know, passive investments just tracking uh different indexes usually wins. That's why I think this is such a no-brainer type of investment. And of course, I'm not a financial adviser. I'm not like a professional investor or anything like that, but I love data. And to me, the data shows this. Okay, so now that you guys know what they are, let me show you why they are so powerful. And this is the part that honestly changed how I think about money, investments, all that stuff. The point of this section is basically to persuade you guys or give you guys as much information as possible about why index funds are so powerful. Most people when they start out investing, they want to choose everything. They want to spend a ton of time diving into the numbers and buying and selling, right? Buying low, selling high. And this is where a lot of people lose a ton of money. So hopefully this section can help you guys out. And it literally is the reason why majority of my investments are passive and not active. Okay, so number one, index funds. They beat the pros, right? So for the last 15 to 20 years, around 90% of active fund managers actually failed to beat the S&P 500. Like I mentioned earlier, people that do this for a living with like big teams and Bloomberg terminals, they lose to a fund that just buys everything. So that's pretty crazy to me. Now, if you look at the historical return, uh the S&P 500, for example, since this is the most popular index, has averaged roughly 10% per year before inflation over the long run. And if you account for inflation, it's about 7%. Now, I will say it's not like a steady 7 to 10% per year. Some years it could be down big, but over decades it trends up. Like that's the data. Now, the real cheat code is compound interest, which is basically exponential growth. For example, if you invest $500 per month at 8 to 10% for 30 years, that's going to be about $680,000 to over a million. Now, most of that is actually just from growth. It's not like actual money that you put in. So in that case, 500 per month times 12 is 6,000 per year times 30. That gets you $180,000 of principal, which is money that you actually put in. But as you can see, over time, that grows to something that is significantly more and could make you a millionaire. So that's basically why my dad told me to start early and invest at the earliest age possible. It's because time does the heavy lifting. Now, another reason why I absolutely love index funds is because of the low fees. And I talked about this, but I really want to nail this into your head because with these low expense ratios, you just keep way more money. So, if you compare, for example, like a 1% fee versus a 0.03% fee over 30 years, that's going to cost you six figures. I know it doesn't seem like that big of a difference, right? It's just 1%, but that 1% also compounds and that 1% grows exponentially. And so, over time, this costs you so much money. If there's any place in your life where you should really be frugal, I think it's investing fees because fees add up over time. They compound and that is the worst thing to grow exponentially. Next is it is basically fully passive, right? So, you're not going to be spending your time day trading. You're not going to be checking the charts all the time. Probably not going to be that stressed since while they can be a little bit volatile, they're generally quite stable. All you're basically doing is just buying regularly, putting X dollars per month, let's say, into your index funds, your investments, then you hold it. You don't sell it, and then you live your life, right? I literally don't touch mine. I've never sold a single ETF or mutual fund that I've bought. And we'll talk about this a little bit more later on, but you can actually borrow from your investments and not make a taxable event, which saves you a ton of money in taxes, right? Like if you build a $1 million portfolio, you can literally pull out, let's say, $300,000 of that, depending on what stocks you have and what brokerage you use at, let's say, x% interest, and just live off that money. And when you're pulling that money out, it's not a taxable event. So, you're not paying taxes. Crazy, crazy stuff. Now, since it's passive, basically what I can do is I can focus my time and energy on building my business, making videos like this, doing work, going to the gym, self-improvement, traveling, all that stuff. Seriously, I don't think people realize how big of a mental toll like active investing actually takes. I think it's really going to negatively impact most of you guys because the truth is investing can be interesting and fun, but you don't want to sit in front of your phone all day checking the price of a stock that you just bought to see when you want to exit. You don't want to like trade options and have these huge swings where you're maybe making some money some days or losing a lot of money other days. Not doing that stuff allows you to focus on more important things. And that's why I think being a passive investor is such a superpower. It's like buying a BMW M3, right? If you can buy a BMW M3 and not put $30,000 of unnecessary mods into it, then you're winning. Because when you're going to sell that car, you're not going to get any of that money back. or at least not most of it. I know it can be very tempting to want to buy all those mods on a supercharger, coilovers, all that stuff. But if you just buy the car and enjoy as is and spend your time on other more important things, then you're winning. Sorry, I had to use a car analogy because I just bought an M3. But hopefully you guys see the point that I'm trying to make. Now, let's talk about which ones should I actually buy. Now, I will say you don't need to invest in a ton of different funds, right? I think a lot of people think they need like 20 plus different funds, but the truth is you don't. If you guys are starting out, I'd say just pick one to three different index funds and that should be enough. And the reason for this is because when you're buying an index fund, you're already super diversified. And if you're buying a different one, there might be a bunch of overlap. So, there's not really a whole lot of need to buy a bunch of different index funds, especially if they are in US companies. But, let's go over some of the most popular index funds that people are buying. Now, let's talk about S&P 500 funds because I think this is probably one of the most popular indexes that people love tracking. When you're buying this, like I said, you are investing in basically the American economy, the top 500 or so companies in the US. A lot of the times, these are high growth companies that people really like investing in. There's a lot more tech in S&P 500 versus, let's say, the total stock market. And so, yeah, some of the most popular tickers are going to be, for example, V. So, I have VO pulled up right here. I love Vanguard funds because they have really low expense ratios. So, that's why I choose a lot of Vanguard funds for my portfolio. Let's go to the Vanguard page. This is a very popular one that I have a lot of. This is like the I think I'd say the main ticker that I have. As you can see, it's also available as Admiral Shares, which is basically mutual funds. So, if we click on that, you can see the accompanying mutual fund is going to be VFI AX. These are the same thing. So it doesn't matter which one you guys buy. So this one 0.03% market price currently is $693.36. Expense ratio of 0.03%. And let's take a look at the performance over time. Okay, looking pretty solid. These are the percent returns for each time period. So yeah, over the last year 29.92% which is insane. Most high yield savings accounts are paying like 3 to 4% interest. So this is basically 10 times higher over 3 years, 23.57% per year. Yeah, it's really cool to just, you know, look at all these different data points. It helps to do research like this for any type of fund that you want to buy. There's also FX AIX. This is a Fidelity S&P 500 index fund, basically a mutual fund, right? Very, very similar annual returns as we expect since they are literally tracking the same index, which is the S&P 500. You can see all the data right here. growth, top 10 holdings, and yeah, any type of brokerage that you guys end up getting. And by the way, I'll have links down below to some of my preferred brokerages that you guys can use. And I do believe you guys do get some incentives or bonuses for using those links. And you also do help support the channel. So, do want to say thank you a lot in advance. Yeah, no matter what brokerage you use, you're going to be able to see all this information. Here is another very popular S&P 500 index fund ETF. In this case, it's called SPY. It's spy. So very very similar thing. This one just does have a higher expense ratio. So yeah, if you want to invest in the 500 biggest US companies, just buy one of these. Now the next index that is very very popular is the total US market index. Some of the more popular tickers uh to buy this is going to be VTI FZ RO X. And so let me show you guys that right now. We already went over this in the beginning of the video, but VTI is the Vanguard ETF and this tracks about like 4,000 different companies in the US. So, the total stock market. If you want to invest in the mutual funds version of this, just click on this and this is VTSAX. You don't need to have a Vanguard account to buy these. Uh you can buy them on any brokerage. It does not matter which one you use. Now, if you look at the different sectors for VTI, you can see them right here. for example, 1.7% in basic materials, 3.8% in energy, 10.3% in financials, 39.3% in tech. So, you guys get the point. It's very, very diversified and you really can't go wrong with any of these index funds that track the total stock market. Now, if you want to invest in more international companies, then there are definitely indexes that track international companies. So, we basically call this total world or international. Now, VXUS is the Vanguard Total International Stock ETF. You can see the expense ratios a little bit higher at 0.05%. Basically, the more niche these get, the higher the expense ratios get. Still though, super super low. As you guys can see, the year-to-ate returns uh for this particular fund is 14.25%. Here are the returns over these different time periods. Generally, in like the last 10, 20 years, international companies haven't done as well as the US. But of course, you want to diversify because if you're only invested in the US, then if the US takes a dip, but international stocks actually go up, then you are missing out on gains. So, I do definitely have both international as well as US index funds. Here is another one. It's a stock trigger VT. This one has an expense ratio of 0.06%, market price 157. So, you guys can check out the returns. But yeah, these are two of the more popular index funds that track international stocks. Another index that people like tracking is going to be the NASDAQ. So, this is very very techheavy. So, a very popular one for this is going to be QQQ. If you only want to invest in tech and you don't want to invest in some of the other like sectors, then you might not want to do something like VTI or even VO because those are going to include those types of companies and sectors. Rather, you can just invest something like QQQ and it only has tech companies. So for example Nvidia Microsoft Apple Alphabet, Broadcom, Amazon, you guys get the point. With tech, right, it's definitely a bit more risky since it's more niche, but there is more room for growth. And yeah, in recent years, right, tech has done extremely well. So you would have made more money investing in just tech versus a more diversified fund. But of course, it is more risky, right? Whenever there's more risk, there is more possibility for higher gains, but there's also more possibility for losing money. So, you really have to look at your risk tolerance and see what you want to do. So, my advice for you guys is if you are just starting out investing in index funds, I probably would just go with a very basic S&P 500 or total stock market fund. Maybe get one or two of those. If you want to get a little bit of international exposure, you can definitely get some of those funds. But just with those three categories, you are super super diversified. Now, I will put a link down below to this spreadsheet which contains some of the most important terms that you guys should probably know. I'm not going to go over all of these right now, but let's go over some of them just because I find it very interesting. For example, dollar cost averaging, right? So, this is basically what most people recommend doing. It's when you invest the same amount of money on a regular schedule. So instead of like not just dumping all your money all at once into the market, you are putting let's say X dollars per month over time consistently. And that way you're not trying to time the market. This has done really well for people. Although some studies actually show that just dumping all your money in it at once can actually make you a bit more money in the long run since you are invested for a longer amount of time, but it's definitely a little bit more risky as well, right? We'll talk more about market orders and limit orders as I show you guys how to actually buy these ETFs, but essentially a market order is you're buying the current price right now. And this is the best one for beginners. This is what I use. You hit buy, you choose market, and then you get the stocks if the market's open. With a limit order, this is another way that you guys can buy stocks. Essentially, you're setting a price that the price needs to reach, and if it doesn't reach that, you're not buying it. So, for example, if the current price of a stock is, let's say, $100 per share, and you set a limit order at $99 per share, that order is only going to execute if the price of that stock hits $99. If it stays at 100 or if it gets to $991 or if it even goes up to $105, it's not going to buy the stock. So, a little bit more risky, but when done right, uh you can get in for a little bit less money. Fractional shares are what a lot of you guys might be buying, right? So, instead of buying a full share, you're buying a piece of a share, which allows you to invest in very expensive, let's say, ETFs, but not put that much money in. And yeah, like I said, I'll have a link down below to this sheet. So, now I'm going to show you guys how to actually buy index funds on two different platforms. It really does not matter what platform you use. There are so many different platforms out there. They all do the same exact thing. But today, I'm going to show you guys Weeble as well as Public. These are two of my favorite brokerage platforms that I've been using for quite some time. For Weeble, I'll be showing you guys on my phone. So, actually buying, you know, stocks using just your phone and public, I'll be showing you guys on my computer. But yeah, for both of these, I'll have a link down below in the description. You'll get some type of bonus when you sign up using them. The bonus changes all the time, so I'm not going to say what it currently is since it might change, but yeah, they're both free to open. There's no like minimum requirement you need to start. And what I found really helpful is just like following along, right? to actually like download the app or sign up for the account right now while you're watching this video and actually buy something while I do it. Or if not ready to buy right now, just sign up and then you can follow along right until I actually submit the buy order. Okay, so I have Weeble pulled up on my phone right now. You guys should be able to see it. And what I'm going to do is I'm just going to buy some. Let's say V. So I'll search up V here. As you can see, it is this one right here. And I know it might seem a little bit intimidating, but it's actually not. So this is basically where you can see the price of VO over the last 5 years, 1 year, 3 months. And as you can see, yeah, 5 years it's done really, really well. You can also click here for news to see if there's any updates or anything that you guys should know. I'm going to go back here to chart. We come back down here. Don't worry too much about this. This is also a little bit more advanced. You guys don't need to know this, but I have some money in my account and I'm going to show you guys how to actually buy it. It's very, very easy. So if I click on trade right here, this is going to be the trade screen, right? So I'm in my individual cash account. So my normal brokerage account. So now you have the option to select either buy or sell. So since I am buying VO, I'm going to select buy to have this green color. It's set to limit right now because we are outside of normal market hours. But as you can see, we can select what type of order we are making. Market order and limit order are the two main ones. Don't worry too much about the other ones. You can even set a recurring investment, too. But I'm going to select market order. Now you'll have the option to buy either in quantity. So X shares for example I can do one share here. It's going to be about $691 per share for this. Or if I buy two, right?$ 1380. And yeah, you can do it like that. Might be wondering that's a lot of shares. It's true, but you can also switch it to USD. And this is where you buy fractional shares, right? This is a really cool feature with Weeble. So let's say I want to buy $20 of VO. We'll select $20 right there. You'll get about 0.02. 02893 shares and you will click on buy. Now, I can't buy this right now because I can't do a market order using Weeble during, you know, outside hours, but let me show you guys how to do a limit order because I can actually do that. So, we'll go back to this. We'll go to limit order. We'll set our limit price. So, let's say I want to have it be 691, which is very conservative. Just 0.03% the last price. It's very likely that that price is going to hit this level. For example, if I set this limit price to $300, right? There's basically no way that VO is going to drop from $691 to $300. So, that order is probably not going to execute. So, we'll set $691. Let's say we want to buy one. And since we are overnight right now, let's select this one. But, of course, select accordingly. And then we'll click on buy. And we'll click on confirm. So, cool. It's submitted the order. And to actually deposit money into your Weeble account, it's very easy. You'll just go to your account on the bottom in the middle. You'll click on deposit. You'll put a number. So, let's say you want to deposit $100. You'll choose your account/method. So, these are different accounts I have connected, which you'll want to do. We'll go ahead and select this one. You can set a schedule if you want. So, I'm just going to do once, but you can also do daily, weekly, bi-weekly, monthly. Confirm. We'll click on review. And then to actually put this money in, you'll want to click on submit. And we're done. So, as you can see, super super easy to use Weeble. And now I'm going to show you guys how to buy, let's say, VTI on public. And the reason why I want to show you guys multiple different brokerage accounts is because it really doesn't matter which one you guys use. Yes, the interfaces are a little bit different, but they all do the same thing. And as long as you choose a reputable brokerage, then you are totally good. Okay, so I'm in my public account. This is a new account that I created to put some money into so I can show you guys. Here is where your portfolio is going to be, where you have the different stocks that you have in your portfolio. And what I'm going to do is let's go and search up VTI. We'll go ahead and click on this right here. As you can see here, we have the price down a bit in the last day, but if we look at the last month or let's say year or 5 years, looking really, really solid with some dips, of course. Now, you can learn more about, you know, whatever you're trying to buy here, right? All these brokerage platforms give you a ton of different information about what you're buying. We have news right here, but let's go back up to here and let me show you guys. So, we're going to buy VTI. You can also short VTI. We're not going to talk about that because it's a lot riskier. So order type, very similar to Weeble, right? We're going to select this here. Market order, limit order. Those are the ones that you guys need to know. We'll set ours to market order. We're going to buy in either dollars or shares. So same thing as Weeble. Dollars is basically going to be partial shares or fractional shares. And the shares is of course just going to be buying 1 2 3 whatever. Since we are after hours, we can't actually do market orders right now. But we would just select the number of shares and click on buy. If we do dollars, for example, let's say, let's do $20. We can click on review. You can click on submit order, and it's made the buy. So, this is still pending right now. So, it's not yet in my account, but once it is in my account, you're going to be able to see your position right here. And if you go to your portfolio, it's also going to show up right here. To put money into your account, you'll just come up here, click on deposit. You're going to select how much you want to put in. So, let's say 100 bucks. You'll select from where. So, you'll want to add different accounts. It's going to be going into my brokerage account. And then you'll click on next. And then you'll click on confirm. So, yeah, super super quick. Just wanted to show you guys how to use these two different platforms and show you guys just how easy it is to buy these. Now, something I really recommend doing is setting up recurring investing. This is the pro move. Think of a number that you are willing to invest every, let's say, week or month. Set that number a recurring buy and just forget about it. Right? The reason why this is so powerful is because we're human. we forget to do things and especially for me, right? Like if I didn't have a lot of these automatic recurring buys set, I would just simply forget to invest. So if you want to dollar cost average your way into the market, just set up a recurring purchase like this where invest X dollars per month or week or whatever it is. Make sure it's something that you are okay investing and then just set it and forget it. Okay, so now we have a very good basic understanding of what investing is and what index funds are. Now, let's talk about how you guys can actually invest like a pro moving forward. So, what I would do is I'd pick one to three funds and then I just buy those funds, right? Don't over complicate things. Automate it. Set up a recurring buy. And yeah, every paycheck you get, you're going to have X amount going out automatically. This is especially good for people that are not that good at saving money, like people that love spending, because the money is just automatically taken out. And yeah, just trust me, it it's smart. Now, as you buy index funds and build your net worth and your investment portfolio, I will say there are going to be market drops, right? So, not every single day is it going to go up because that just doesn't happen. If the markets do drop, don't panic sell. This is a huge mistake that a lot of new beginners will make. If there's, let's say, 5% dip in the market, right? Something big happens in the economy. A lot of people, they freak out. They're like, "Oh my god, it's going to keep going down." And they sell all their stuff. It's totally normal to have these feelings, but the people that win in the long term don't do that. They just keep buying, right? You can sort of think of every dip as a sale to buy more. And yeah, I've seen my accounts drop a lot sometimes, right? For example, the pandemic, we had some big big drops and that was definitely very very scary. But as you guys can see with the market and it's very good that I kept buying more. What I like to do is I just think in decades. I think about me in 20 30 years. I don't think about what is happening today or tomorrow or next week. In fact, I don't even check the value of my portfolio on a day-to-day basis. I actually check it pretty infrequently. Now, I do want to talk about using tax advantaged accounts if you can. So, there are different accounts like the Roth IRA, there's the traditional IRA, there's the 401k. Basically, yeah, the government gives us a bunch of these like wrappers or account types that we can actually hold index funds in. Right? So, when you are just opening up a standard brokerage account, you're taxed like normal. If you buy and sell and you make a profit, you're going to pay either short-term capital gains tax or you're going to pay long-term capital gains. And there's no way to get around that. Now, if you're opening up a different type of account, so for example, a Roth IRA, there are some really big tax advantages when you buy your index funds in those accounts. I'm not going to get into these accounts too much in this video, but just know that this can save you a ton of money. So, what I would do is I'd watch some of the other videos on my channel or I would do some more research about these types of tax advantaged accounts. Might make sense for you to, for example, have a Roth IRA account. This type of account, you post tax money into it. So money that you've already paid tax on and then any gains in that account, you actually don't pay any taxes. Now, of course, it is a retirement account, so there are some rules on when you can take the money out. There can be some penalties if you take out money early. There's also the 401k. So if you have a job, it's very likely that your employer offers a 401k for you. In this one, you are putting pre-tax money into it. So basically, you get a deduction the year that you put money into it. This lowers your taxable income, but any gains are taxed like normal. So, yeah, you can open up these accounts and then just buy index funds within these accounts. So, that's a cool way to build some long-term wealth with some tax advantages. You can also do that alongside having a normal brokerage account, which is exactly what I do. I have my retirement accounts. I also have my normal brokerage account. I have index funds in all of them. Real quick, some mistakes. Uh, just to recap, right? Don't try to time the market. Don't chase hot stocks. Don't pay high fees. Don't panic sell and don't wait to start investing, right? Invest as early as you can. So, you guys have learned what took me years to figure out and now you know what index funds are. You know why they beat the pros. You know some of the more popular ones that people buy and you actually know how to buy them on two different platforms. So, yeah. 16 years ago, right? I had really no clue what index funds were. I didn't know what ETFs were or mutual funds. And I just started investing. Right now, index funds are the biggest chunk of how I invest. I really owe it to my dad who helped educate me at an early age. But yeah, no matter what age you are watching this video, now is the best time to invest, right? You can't go back in time. And today is without a doubt the best day that you guys can start investing. So if you guys start today and you stay consistent, the future you is going to be really, really happy you did so and you're going to have a net worth that a lot of people just dream about. Yeah, that's pretty much everything you guys need to know about investing in index funds. So I encourage you guys, like I said, go open up an account. I have links down below to my favorite brokerage accounts. You get bonuses when you guys use my link. And even if you can only invest $10 today. That's awesome, right? That's better than 95% of people out there who just never get started. Now, I'm going to have other types of investing on my channel. So, if you want to stay up to date with those, I encourage you guys to subscribe, give this video a like if you got any value from it, share with a friend who needs to start buying index funds. And yeah, thank you guys so much for your time. I really, really appreciate it. And yeah, I'll see you guys in the next video. Peace. Heat. Heat. N.