Dollar cost averaging: a $689 monthly retirement plan

0:00What if I told you that investing just $689 every month, less than what most people spend on their car payments, could have turned you into a millionaire by now. Winston and I are not talking about crypto gambling, day trading, or some get-rich-quick scheme. I'm talking about a stupidly simple strategy that has consistently worked for the last 16 years, even through three major market crashes. While everyone else was panicking and selling during market crashes, this automatic system just kept building wealth. And by the end of this video, you'll know exactly how to set up the same system for yourself.

0:39But here is the catch. This only works if you can ignore the noise and stick to the plan. Are you ready to learn the strategy that could change your financial future forever? Put a "ready" in the chat or just an "a" will do as well.

0:55My name is Felix Freed. I'm a former investment banker. I'm also the founder of the Gold Academy with over 20,000 students and I'm the co-founder of TradeVision.io where we give you news and data that usually only Wall Street has access to. But more importantly, this exact strategy took me from being broke and struggling to splitting my time between some of the loveliest places in the world.

1:18And my mission here is simple. I'm going to spend my retirement to help a million people achieve financial freedom using proven data-driven strategies, not get-rich-quick schemes or super complicated trading tactics. And today I'm going to show you the exact $689 a month plan that would have turned that money into $461,000 based literally on verified historical data from the S&P 500. By the end of this video, you'll have everything you need to start building your own wealth automatically.

2:01Let's start with this $689 per month specifically. This isn't some random number I pulled out of thin air. It represents approximately a 20% savings rate for the average American. Challenging for many, but achievable. And it forces you to prioritise your financial future and your freedom without completely destroying your current lifestyle.

2:26Think about it this way. Most people spend more than this on their car pay, eating out, and entertainment subscriptions combined. But here is what makes the number magical. From 2009 to 2024, if you had automatically put in that $689 per month into the S&P 500, no matter what was happening in the world, you would have put in a grand total of $132,288. That was your total investment over 16 years.

3:03And by the end of that, how much do you think your portfolio would have gone up by? A whopping 248%. So you would have turned this amount, this $132,000, that was not what you ended up with. You instead ended up with $461,000. Not too shabby, right?

3:25And this was literally through three major market crashes. We had the 2011 debt ceiling crisis. We had the 2020 COVID crash. We had the 2022 inflation bear market and so on. The system didn't just survive. It loved it.

3:38Now, do I think you could have done better? Yes, I think you could have done better if you'd known how to find winning stocks. If you'd known how to set up your portfolio a little bit smarter, get out of some of the losers, you could have done that better. And if you want to learn how Wall Street professionals actually find those winning stocks, I've actually created a free training for you that breaks down that exact process. It's only 15 minutes long and you can get it at felixfriends.org/getfree. It's literally 20 years of wisdom packed into 15 minutes. Just part of our mission here to help you get to your goals.

4:10Now, let me show you how this very simple strategy actually works. First of all, you need to understand what the S&P 500 is. The S&P 500 are the largest, most successful US companies. Think Apple, think Nvidia, think Microsoft, think Amazon. All those big boys are in there. Well, there are actually 500 of them.

4:33And from 2009 to 2024, those companies on average returned a 14.5% return. That means they went up 14.5% on average. I'm not promising you that that's going to happen in the future. I'm going to be very clear on that, right? You go back a little bit further in the data, it becomes 12%. You go back really really far in the data, it becomes 10%. So this is a golden period here. Although my humble opinion is that the period ahead is very very much platinum, but that's a personal opinion.

5:07So how did this actually work? How does this 14.5% come about? Did we have really good years? Yeah, we had some really good years. We had 2013, that was a 32%, wonderful year. What about some really terrible years? Did we have a really terrible year? Yep, we did. We had 2022 where the market went down 18%.

5:30But on average, the market was positive 14 out of 16 years. And that means on average you make some really quite nice money. Even when you have these end of the world scenarios. COVID, the market dropped 34% in 33 days, right? Everyone's screaming it's the end of the world and lock yourself in the basement kind of thing.

5:53We've also had high interest rates. We had the war in Ukraine. We had supply chain disasters. The market dropped 25% over 10 months in 2022. Again, the system just kept buying and the result, you get a massive recovery after the drop. So yeah, 2022 was a disaster, but then 2023 comes in and you're up 25%. And because you kept buying when the market was low, you actually get better returns.

6:21And that's the power of literally just dollar cost averaging. When the market goes up, you will automatically buy fewer shares because they're more expensive. And when the market crashes, you buy more shares because they're running at a discount. And over time, it smooths out your average purchase price. And it takes all the emotion out of this equation.

6:39So while everybody was panic selling the bottom or getting greedy at the top, your automated system was making a mathematically optimal decision every single month. No emotion, no second guessing, no market timing, just consistent, disciplined investing.

7:07Now, the strategy I want to show you takes this foundation and potentially supercharges it by adding carefully selected individual stocks. So let me show you what I do. And you could literally just do the index fund thing, the S&P 500, and you're going to be great. But what I do is this. I divide my money essentially between the S&P 500, and that's 50% of my money. You're wondering why I do that. It keeps my family happy. They sleep better.

7:35And then on the other side, I select stocks because I believe this is not rocket science. I've met quite a lot of bankers. They weren't that smart. And what do we do? We put some of this money into individual quality stocks or growth potential, but not just any old stocks.

7:52So let me walk you through exactly what your money would have done using historical data. You started out in year 1. By the end of year 1, you had invested $8,268, but your portfolio actually went up that year. That $8,000 became $9,362. It's not bad for a first year. You already made $1,000.

8:17And you take this a little bit further forward. By year 5, what do you think happened? Your total invested is now $41,340. But your portfolio looks a lot happier than that because of the market working for you. Your portfolio was worth not $41,000, it was worth $65,000. So your gains here are tremendous. $24,000, more than half of what you put in.

8:50And then in year 10, which was a terrible year, year 10 was 2018. The market literally did minus 4% that year. Disaster. But your portfolio, how much is your portfolio worth? It's worth $147,000. How much did you put in? What was your contribution? It was $82,000. That's all you put in. So that gain there is huge. The compounding, the growth is already doing most of the heavy lifting.

9:29And as I already said to you, by the end of it, you had $416,000. You only put in $132,000. You literally allowed your money to make you, I'm going to have to write this down because the number is that insane, your money earned $328,717. You didn't do anything. You just slept and snoozed and let the automation do its thing.

10:00And that's why I keep saying to people, you own a business, you're in a shop in the greatest location in town, and you decide to lock the door and put a closed sign at the front door because you're not doing this. Now, you might be thinking, "Should have started 16 years ago." Well, when's the second best time to start rather than 16 years ago? It's today.

10:18But it gets even more mind-blowing. Some of you have more money. If you put in $1,000 a month instead of the $600 whatever dollars, your portfolio would be $669,000. If you put in $1,500 a month, and let me know what you're planning to put in after this, put it in the comments down below, you would have a million. Now, if you go a little higher than that because you're a higher income earner, brilliant. $2,000 a month, how much would you have? You'd have $1.3 million.

10:55Longer and so on. But you know what I'm talking about, right? Starting early is crucial. Starting now is crucial. Even if you can't do the $689 right now, start with $100 or $200. It creates the habit. It begins the process.

11:10I literally had breakfast with a chap who does some stuff for me. He works for me as an agency. And he said, "Oh yeah, tell me about this investing thing. Yeah, I'm going to start once I have a bit more money." And I'm like, dude, you're making pretty good money. Just start now because this is it. The time is your best friend.

11:27And the counterintuitive part, some of your best returns come in the worst years. In 2022, when the market dropped 18%, your automatic system was buying shares at a 25% discount. So when the market recovered the following year, those discounted shares exploded in value. And that's why emotional investors lose money and systematic investors build wealth. The system removes fear and greed from your decision-making.

11:53So how do you set this up as an automation? Let me give you the full thing as a breakdown. One, you need a brokerage account. That's the first step. Otherwise none of this works. A low-cost brokerage account. You could literally go to one of the big players. And again, this is not sponsored in any way, shape, or form. I don't particularly like these guys. I will never take money from anybody. You could go to Fidelity. You could go to Vanguard. You could go to Schwab directly. I actually have a Schwab account. And they will give you commission-free and very, very low-cost S&P 500 funds.

12:22And there are many of those. You can look them up. Just find the one that's got the lowest fee. Something like VOO will do well. I think that has a 0.01% fee, I think something like that. Now, if you're investing for retirement, don't just put it into a brokerage account. Make sure you're using a Roth IRA. That's your biggest friend, my friend. And it means there's going to be no tax on this, which means you're going to compound twice as quickly or 3 or 4 times as quickly as the guys who are doing this in taxed accounts.

12:49And you want to set this up as an automated monthly investment on the day you get paid, not at the end of the month because there's nothing left at the end. Really, really crucial. Treat your investment like a bill that must be paid fast.

13:01And if you don't just want to do the low-cost index funds, well, to start with, watch the free training at felix.org/getfree because we need to dive a bit deeper there. But if you want to buy individual stocks, here are some of my rules. We want to buy quality because this is for our retirement. This is for our freedom, right?

13:20What do I look for in quality? I look for a couple of metrics. You might want to write these down. Gross margin means absolutely nothing to most people with fractional friends. You're like me. Well, you need to know your gross margin needs to be 30% or greater. And it basically tells you there's pricing power. It means it isn't that easy for a competitor to come in and undercut.

13:42Another metric that I absolutely love is called ROCE, return on capital employed. It tells you is the company good at investing its money, because ultimately that's what their job is, because we as shareholders own it. And you want that to be 15% or greater. Why? Because that's kind of what we're aiming for with our portfolio. Again, no promises on returns, right?

14:04And if you look at just these numbers, that'll literally eliminate 90% of every stock out there, literally. But stocks like your Microsoft, like your Apple, like your Johnson & Johnson, like your Visa, like your Procter & Gamble, they will typically do well. Literally open up Google and type in any company name and say gross margin, or type in any company and say ROCE, and you're going to find that data for free. Thanks to the power of AI, we no longer need to pay for subscriptions, all this stuff.

14:31And then the truth is that most people fail doing this. And it's just the lack of discipline people have. People track their brokerage account every single day on the freaking app on their mobile phone. Uninstall the app. Seriously, promise that to yourself. Just get rid of it right now. You don't need it. Delete all investment apps from your phone. They're designed to make you trade more. Why? Because the brokers make money on the trading fees.

14:53Now, even if you have a zero-fee broker, they still make money on trading fees. It's just that they hide it from you through something called bid-ask spreads and selling your data. What you want to do instead is you want to have a journal, good old paper, and in that you want to write down what you bought, why you bought it. And you want to look at that quarterly if this is all you're doing, maybe monthly if you really must. Write down why you bought each stock with the date. It prevents panics, right?

15:21So the key thing you want to write down in your journal here is the why, right? Write down those gross margin and those ROCE numbers I told you to write down. And then you can check, have they changed? No, the stock's down 20%, who gives a who, right? Maybe it's just the market crash that month. Keeps your mind focused on growing wealth.

15:40And do please prepare mentally for crashes. Your portfolio is going to drop by 30%. I'll guarantee it. And how should you see that? Well, it's a buying opportunity. When I see market crashes now, I smile because I'm like, I can buy more of my favourite stocks at amazingly discounted prices. That is fantastic.

16:01So market crashes will happen and you need to be prepared for it both mentally, but also financially. Turn off the financial media because they scream at you and they make you go crazy.

16:10"You did this to me. I know what you're doing. You're trying to drive me crazy. You're a cunning little mastermind who will stop at nothing until I go completely insane."

16:21How are you prepared financially for a market crash? Well, if the market drops 30% and you've got zero dollars in your bank account, you're going to sell because you're worried it's going to go down more and you'll be poor and you can't afford stuff. So you want to make sure you have cash set aside. And that's why I keep hopping on about the good old emergency fund, because that in itself makes you hold on to the stocks you have.

16:48And this should be something like 3 to 6 months of expenses. You don't have to have that in cash. You can put it in a high interest account. You can put it in a money market account, some sort of short-term debt thing. We don't need to get into that in too much detail. But the key thing is that you have it. And if you have it, you know you can make it through the crash and therefore you're not going to do something silly like sell it.

17:07And you think, oh, that's not going to happen. The market just keeps going up in a straight line. No, every 5 to 7 years we go down 30%. Every 5 to 7 years. That's really, really often. So in your lifetime, that's going to happen a lot.

17:17And there's a lovely little mental exercise you can do. Imagine logging into your account tomorrow, seeing your portfolio down 30%. How do you feel? If you're panicking, you're not quite ready. If you're thinking time to buy more, well, you're starting to get the right mindset. And most successful investors I know are the ones who sleep well during market storms because they know their system will automatically take advantage at lower prices. You don't need to take any action. The automation will just do its thing. Maybe you can increase the amount of the automation. That could be the one thing you could do.

17:47"You had a balance of 93 cents and at an average of 2.25% interest over a period of 10,000 years, that comes to $4.3 billion."

17:57I've now helped over 20,000 people in our academy. And let me help you avoid the biggest mistakes they keep making. The first one they keep making is, I'll wait for the market to drop before I start investing. That's the most expensive mistake. While you're waiting for the perfect entry point, maybe you're waiting for the pay rise or to earn more money next year or whatever, you are missing out on compound growth. The best time to plant a tree was 20 years ago. The second best time is today.

18:24And then the second mistake is just emotional investing. The average investor significantly underperforms the market because they buy when it feels good. The market moves like this, right? So what do most people do? They buy here and they sell there and then they buy here and then they sell there, and the only people who get rich are the brokers and the buggers on Wall Street. So don't do that. Don't check your portfolio that often. Leave it up to an automation and then you can check it quarterly or monthly.

18:56And the real problem of course is that when you are in the crash zone here, people just abandon it because it doesn't feel good. The 2008 crisis, the COVID crisis, inflation crisis, all of these, and lots of people stop investing. The key is to zoom out. Pull up a 100-year chart of the S&P 500. Every major crisis, world wars, Cuban missile crisis, oil embargo, dot-com crash, 2008, it all looks like a small blip on the long-term chart.

19:23And maybe you feel like you're not ready yet. You think, I've only got 100 bucks a month spare. What difference is it going to make? Over 30 years at just 10% returns, $100 every month becomes $226,000. So every dollar you don't invest today will cost you $17 in retirement wealth.

19:43Think about that. Your money is actually worth 17 times more than you thought. I've literally given you the complete strategy, the historical proof, and the common pitfalls to avoid. All you got to do is actually get started.

19:56Set up the account, open a low brokerage account, compare expense ratios, choose an S&P 500 index fund with the lowest fees imaginable. Determine your monthly amount you can realistically put in there the beginning of every month. Make that an automation, that's crucial. Most brokerages allow you to do that automatically and they just debit it out of your account.

20:16And if you want to take it further and you want to look at quality stocks and maybe do a little bit better potentially than the market overall, then go to felix.org/getfree and actually learn the rules that Wall Street uses to find good stocks, where they enter, where they sell, all that kind of good stuff, because that takes a little bit more effort.

20:34Let's just recap here for a second. We started by understanding why just $689 monthly is the magic number to get to enough wealth to retire for most people. We examined the last 16 years of verified S&P 500 data and how that took $130,000 to $460,000. I gave you an actual system of automations, how to set it up. We covered mindset and discipline required here.

21:00And it's just consistency that beats perfection. Start with what you can afford. Over time, it's going to motivate you. You want to put more in that, I promise you that. That's going to happen. And then your financial future is in your hands. The strategy is proven, the data is clear, the tools are available to everybody for free. The only question is, will you take action?

21:17Just remember, even at just 10% a year, your dollar now is worth $17 in 30 years. And if you want to take this to the next level, go join my free training felix.org/getfree. Our mission here is to help a million people achieve financial freedom. Share this video with somebody who needs it. Leave your questions in the comments down below. I read every single one. And I wish you great success.