IFB46: Back to the Basics Pt 4: Investing 101 and Compound Interest

This is part 4 of the 5 episode “Back to the Basics” series from The Investing for Beginners Podcast. Each episode covers the fundamentals of the stock market and investing to provide a solid foundation for those who are looking to compound their wealth over time.
Here are the links to each of the episodes:
Back to the Basics Pt 1: The Anatomy of Stocks and Shares
–Defining what a stock is
–Talk about the big 3: the cash flow statement, balance sheet, and income statement
–Earnings manipulation
Back to the Basics Pt 2: Share Dilution on Wall Street
–What is a stock
–What are stock buybacks and how they affect us
–What are share dilutions
–What happens when we buy or sell a stock
Back to the Basics Pt 3: Stocks vs Other Investments
–Peer to peer lending
–Real Estate
–Gold and other precious metals
–Bitcoin and other cryptocurrencies
–Bonds
Back to the Basics Pt 4: Investing 101 and Compound Interest
–The importance of buy and hold
–Compound interest and how it can make you wealthy
–Using a compound interest calculator
–The power of dollar cost averaging
Back to the Basics Pt 5: Dividend Stocks and Value Investing
–The advantages of buying low and selling high
–Dividends and the power of compounding
 

Welcome to Investing for Beginners podcast this is episode 46. Andrew and I are going to continue our series on back to the basics, and today we’re going to talk about buy and hold and why that’s important. As well as compound interest and some other interesting topics. So without any further ado, I’m going to turn it over to Andrew, and he’s going to start off our chat.

* The importance of buy and hold
* Compound interest and how it can make you wealthy
* Using a compound interest calculator
* The power of dollar cost averaging

Andrew:  If you’ve read any investing books and gotten involved with the whole scene, these are a lot of the things that are similar themes. I’m hoping with these episodes that we’re going at such an in-depth level that you’re still picking up things that are valuable.
The whole goal of this is to get things to stick. Because it’s one thing to hear something but if you can take these basics and master them– give yourself the reasons why and give yourself not just the how but the why. Give yourself a firm foundation and understanding on why these things are applicable and why, when things get tough, you’re going to have these values to stick to. It’s important to get this mastery rather than just floating through the wind, and when adversity comes, if you don’t have this foundation you might forget about all these lessons or you just might be stubborn and not listen to what’s been proven.
And this kind of like conventional logic when it comes to the stock market and investing and so I think it really can have a big impact on your final results as you navigate through the stock market.

I think that applies whether you’re an absolute beginner or even if you are more seasoned. Getting these lessons drilled and mastered can go a long way. I would recommend going through them I think there’s a lot of good value here and obviously, today even if you’ve heard that you should buy and hold or you should diversify or you should dollar co...