The Young Investors Roadmap to Success

By Brett Aubrey Gordon

Why wait to grow up? You can start investing now!

Understanding finance at a young age can pay dividends down the road. This value investing approach keeps the process simple and easy, so the young—or new!—investor can start seeing financial success over time. As opposed to the pitfalls of short-term gains, value investing works best in the long term, much like running a small business from conception to success to retirement, building wealth along the way. This road map to your financial success will also break down basic financial technical analysis and help you understand how your money is or can be performing. Here are some lessons you can expect when you break open this investors guide:

• Honing your investment mindset
• Decoding financial statements
• Making sense of charts and trading patterns
• Trading strategies and the philosophy of wealth creation
• And much more!

• Language: English
• Publisher: Archway Publishing
• Release date: May 6, 2022
• ISBN: 9781665721332

Brett Aubrey Gordon

Brett Aubrey Gordon started dabbling in stocks when he was twelve. He studied finance and extensively read and researched economics and theories such as stochastic and quantitative finance. Brett taught himself how to write financial formulas and predict the outcome of the market based on facts and hard data. He is now the CEO of a start-up called Infinite Space Technologies.

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Copyright © 2022 Brett Aubrey Gordon.

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Archway Publishing

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and the publisher hereby disclaims any responsibility for them.

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ISBN: 978-1-6657-2132-5 (sc)

ISBN: 978-1-6657-2133-2 (e)

Library of Congress Control Number: 2022906104

Archway Publishing rev. date: 04/06/2022

CONTENTS

Chapter 1   The Investment Mindset

Achieving the Investment Mindset

The Power of Compounding

Be an Investor, Not a Speculator

The Investment Universe

Which Investment Vehicle to Choose

Buying a Business

Chapter 2   Buying the Business, Not Stocks

Find Well-Managed Companies

Finding the Intrinsic Value of a Business

Investing Guidelines

A Contrarian Approach to Investing

Ignore the Market 99% of the Time

Chapter 3   Decoding the Financials

Financial Statements

The Income Statement

Balance Sheet

Cash Flow Statement

Ratio Analysis and Interpreting the Financial Statements

Chapter 4   Using Numbers for Investing

Cause-and-Effect Relationship

Regression

Capital Asset Pricing Model (CAPM)

Law of Averages

Dollar-Cost Averaging

Chapter 5   Making Sense of Charts and Trading Patterns

Moneyline vs. Point Spread Betting

Implied Probability and Vig

Expected Value

Candlestick Charts

Bearish Engulfing Candle

Bullish Engulfing Candle

Moving Average

Bollinger Bands

Moving Average Convergence Divergence (MACD)

Relative Strength Index (RSI)

On-Balance Volume (OBV)

A Combination of Fundamental and Technical Analysis

Chapter 6   Understanding the Philosophy of Wealth Creation

CHAPTER 1

THE INVESTMENT MINDSET

H AVE YOU EVER WONDERED WHY most of the wealthiest people have their wealth tied up in investments like company stocks and real estate?

Well, the reason is simple! These are the tools that rich people have used to become rich in the first place.

ACHIEVING THE INVESTMENT MINDSET

Not every person understands the value of acquiring an investor mindset. By this, I simply mean that not everyone realizes the importance of making investments. Given a choice, many people will choose to gratify their current desires, like buying a car or buying a new watch, rather than saving up and investing that money for later.

Why do people make this choice? Don’t they know what is good or bad for them?

The problem is that we live in a society now that is more connected because of social media than it used to be a few decades back. You are constantly bombarded with other people’s lavish lifestyles—flying in private jets, partying on private yachts, and, in general, living an extravagant life.

It is no wonder that you start to feel that you are missing out on the good things in life, and you start to spend every dollar you earn trying to replicate that picturesque life for yourself rather than invest in building a stable future for your family.

The one other thing that I blame for people not developing an investor’s mindset is our education system. Our schools and colleges have failed to teach children how to manage their finances. You will not find any school inculcating the habit of saving and investing in their students or teaching them about personal finances/investments.

These are habits that, if not developed at an early age, are very hard to adopt later in life. Not every child is fortunate enough to have financially savvy parents who can teach them this at an early age, and so the responsibility really lies on our education system.

The irony of the whole situation is that not only do they not teach you this stuff at school but many students actually take on huge amounts of debt just to even attend a university. By the time they graduate, they are neck deep in debt, which they then have to pay off by working a nine-to-five job.

How are they going to invest if they cannot save?

This is one of the things that separates the rich from the poor. The poor work for a living, whereas the rich make their money work for them.

Let me explain how!

When you work in a job, you are essentially selling your working hours to your employer.

Some people might have more valuable skills than others, which is why they are able to extract a better compensation for their working hours and charge their employer a higher rate. Some people might not be that fortunate and might be working at minimum wage. But in both scenarios the workers are still selling their time.

How much of your time can you sell? Nine hours a day? Twelve hours a day?

And for how long do you think you can work a nine- to-five job?

An average 20-year-old might be able to work productively for more than 12 hours a day. An average 50-year-old can work no more than 8 hours productively in a day. An average 60-year-old can work no more