Welcome to 100 Every Month, where you can follow my stock market journey as I start (almost) from scratch with a £100/month regular investment.
I started this journey on December 29th 2020 where I set up a Stocks and Shares ISA with Freetrade, a trading app which takes no commission and allows completely free trading, with an optional £3/month ISA, or optionally more features for £9.99/month.
I only have two guidelines that I’ll follow on this journey:
- I must invest roughly £100 every month through my ISA
- While I will choose roughly £100 of shares each month to track for this project, I will include any additional investments separately, while focusing on the original £100 investment
I’m currently engaged in a tonne of reading and research, as I have little experience of the stock market outside of cryptocurrencies, so I would consider my position to be not much better than the average person who has no experience of investing. Hopefully this will serve as a worthwhile project to follow which might provide some learnings for future readers.
Who am I?
Call me Jay (or James); unmarried, no children, renting a terraced house with my partner. I’m a tech geek, early-adopter of cryptocurrencies, side-business-owner. I work in marketing in the money-saving industry earning a little above average for the UK while my side-business brings in some play-money.
Why invest in stocks and shares?
With average returns of 8-11% annually (depending on your source), this is far more attractive than current savings accounts which might pay 0.4%. This also beats out any other strategy of investing my money which I can think of, yet there are even countless examples of investors who are able to beat the average over time.
Working in marketing, I do have some insight into consumer trends, so this may also allow me to understand a little more about companies with potentially bright futures by looking at the people buying from them. This may not give me any advantage over other investors, but I feel as though I can see some trends emerging which I want to get into.
Why invest £100 every month?
There’s a few reasons for this:
- It’s a small enough number that I won’t miss it (much)
- It’s easy to free up this much money by cutting back on some expenses, if I need to
- Investing every month ensures I’m actively looking at the market and don’t forget to actually invest
- This should be easy enough to follow for readers of most income levels, who wouldn’t follow along with a £500-1,000/month investment strategy
As well as provide insight into my portfolio’s performance, I may also post some advice of how to fund your own investments. My work in the money-saving industry for the past 5 years means that I’m pretty fluent in saving money, which will certainly help with funding this strategy and any additional investments.
What about additional investments?
I will discuss these in the portfolio update post each month, but they will not be included in the main portfolio tracking, as this will be reserved exclusively for the £100 monthly investment.
I may purchase more of the same shares, if I feel that it is a particularly good investment.
How will I decide on which shares are included in the £100 Every Month project and which are included in the additional investments?
I will consider what I would invest in, as if I only have £100 to invest. Some months it may be that I can only afford the £100 investment, and some months I may be able to invest 5x that much. In any case, my main focus will be on what I think are the best investments for my £100 Every Month strategy, and any additional shares will be an afterthought.
Where does my money come from?
I’m no rich kid; I’ve earned my money through hard work and graft.
I grew up in a regular household, where my parents made the financially-unfortunate decisions to leave their above-average paying jobs to spend more time with their family, by buying a small series of convenience stores which over time went bankrupt. My father went from earning £36k in the mid 90’s (equivalent to about £70k now) to about £18k in 2018 when he retired.
Since a young age, I watched as my parent’s money disappeared and as the nice, annual holidays to Florida stopped, dreading having to work for anyone and relying on them for a pittance of income. I grafted through some small business ideas that made money but never really took off, and learned SEO and marketing from the ground up.
The overwhelming majority of my disposable income comes from my day job, which pays less than the equivalent of what my father’s mid 90’s salary would be worth.
As you can see, I am no rich kid with hundreds of thousands to throw at the stock market and there’s even a good likelihood that you may be in a better financial situation than I am in.
What is my money situation like right now?
I have around £15,000 of debt through a small low-interest loan and a couple of 0% interest credit cards. I move my debt around every 18 months or so in order to continue utilising the 0% interest introductory periods, so as to pay off the debt over time with very little in the way of fees to pay.
My credit card debt is being obliterated by November this year and my loan will be paid off in 2022.
My savings account is currently at about £300, or around 2 weeks of living expenses – this fluctuates depending on how much I pay off of my credit cards. In the last couple of weeks I have paid about £1k off of one card, which I withdrew from my savings account – this is to help me clear it by March, when the 0% interest period expires.
I have a small side-business, selling through ebay and etsy. This produces margins of around 50% on each sale but currently only generates £1,000 on a good, average month. Theoretically, myself and my partner could withdraw £250/month each and the business should sustain itself by generating enough money to reinvest into new stock each year.
We are currently saving for a large purchase of stock, but I hope to start taking a small sum of money out in the next 6 months. In the future I may invest more to grow this business, once we have a larger property where we can store more stock.
For reference, this side-business cost us very little money, around £100-200/month for each of us for a couple of years or so, but required a lot of time to investigate. We resell handmade products as accessories for a larger market. I do believe that we can grow this business much further but that we are currently restricted by space. I also believe that if we can do this, then anyone with the right determination and some startup funds can do the same, if not a lot better.
What am I hoping to get out of this?
As I am just about to turn 30, I don’t expect that a £100/month investment at an 8% average return, would do much to help me retire early (in fact, £100/month with a 0.66%/month return will take 25.7 years to reach a £100k valuation, far from retirement money..).
But, I am hoping that it will help me to achieve a better life for myself one day. To bring forward my retirement age, I will need to make further, additional investments, and/or invest in riskier shares which may provide better than average returns.
For example, at 8% growth and £100/month, I could expect to attain a £100k value by the time I am 55, yet at 10% growth I could do the same by the time I am 52 – if this were enough for me to retire on, I would have brought my retirement age forward by about 3 years.
For my readers, I want you to see what a small, but regular investment can do, good or bad, market-beating, average or losing to the market.
Follow my journey by browsing my more recent posts.