Investing $5 Every Day – The Beginning
In January of 2022, I embarked on a unique financial journey. With a simple goal to invest each day, and not get overwhelmed. I started with $5 daily into stocks, and, I wanted to explore how consistent and minimal investments could grow over time in the stock market. The task was simple – fund the account, allow automatic investments to do their work, sit back, and monitor the progress. And to keep everyone in the loop, I committed to providing monthly updates on the investment journey.
Getting Started with Investing
If you are new to investing or have a limited budget, this approach is an excellent place to start. A small daily investment of $5 into the stock market can grow significantly over time. The key here is consistency and patience, even during the market’s volatile times. You may witness your investment shrinking some days, and on others, it might seem like you’re striking gold. However, the end goal is to let these small investments accumulate and grow over a decade, and then marvel at the impressive outcome that a mere $5 per day could lead to.
How I was Expanding the Investment Portfolio
I chose to diversify my investments between stocks and cryptocurrencies. Using Robinhood’s automatic investment program, I designated $5 daily to be invested in VOO, a popular ETF that tracks the S&P 500. The remaining $5 goes into Ethereum, a leading cryptocurrency, resulting in a balanced portfolio that works around the clock.
Understanding the Investment Dynamics
The advantage of investing in stocks is the potential to earn dividends, essentially getting paid for owning shares of dividend-paying stocks or ETFs. For instance, my investments in the Vanguard S&P 500 ETF (VOO) have earned me dividends, increasing my overall return.
On the other hand, cryptocurrency investments, though not yielding dividends, can provide substantial returns given the right market conditions. However, with crypto, you have to be prepared for a rollercoaster ride, as the market is notoriously volatile.
Managing Investments During Market Closures
While cryptocurrency markets operate 24/7, the stock market is open only from Monday through Friday, excluding major U.S. holidays. To manage this, I implemented a system of depositing $10 manually into VOO on Mondays to cover for the weekends. However, based on insightful comments from you all, I transitioned to a $7 per day investment on weekdays. This way, the investment remains steady at $5 per day throughout the year.
The Impact of Regular Investing
My daily $5 investments into VOO and Ethereum since January 2022 have accumulated into substantial holdings. Despite the market downturns in 2022, my average investment cost remained lower than the current price, implying positive returns. By July 2023, the value of my VOO shares had grown to over $3,000, and I owned 1.5 Ethereum.
Investing in Today’s Fee-Free Era
One crucial element that makes this strategy possible is the advent of commission-free trading platforms like Robinhood and Webull. In the past, brokerages would charge substantial fees for each trade, making daily investments of $5 impractical. Today, these free platforms have democratized investing, allowing everyone, regardless of budget, to participate in the market.
Investing $5 Each Day YouTube Video
Check out my YouTube video where I’ll walk you through my full results by investing $5 a Day (be sure to subscribe to me on YouTube too!)
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