This is going to be a short post. I’ve challenged myself to contribute enough to raise my portfolio balance by a $1000 per month. Now, I’m announcing it to the whole dividend community. This challenge will apply throughout the remainder of 2020. How does it work, and what about the Adopt A Stock project? Let’s talk about it.
$1000 A Month Challenge Details
Here is how the $1000 a month challenge is going to work. Each month, I will look at my portfolio balance. Then, I will contribute enough money to increase the balance up to the next $1000. This will be easier in months when the stock market is up and more difficult when the stock market drops.
Note that this is not the same as contributing $1000 per month to the dividend portfolio. If in June 2020, the portfolio balance reaches $3700, then I will try to contribute at least $300 to bring it to $4000. If instead the portfolio balance is $3200, then I will try to contribute $800 to bring it to $4000.
Clearly, the portfolio balance changes everyday based on the volatility of the stock market. Also, a limiting factor is that I can realistically only contribute twice a month to the portfolio, corresponding to when I get paid. So, I will make this assessment to bring the portfolio balance to the next $1000 around the 15th of the month. If the portfolio then drops below the next $1000 by the end of the month, so be it.
I think the above approach is just another fun way for me to invest additional money into the market. Otherwise, I probably would be wasting that money. And having a mini-goal to focus on, like the $1000 a month challenge, helps keep me focused on rebuilding the portfolio.
What About The Adopt A Stock Project?
This $1000 a month challenge will work in conjunction with the Adopt A Stock project. I already am contributing a minimum of $500 to the portfolio. The question will be how much of any additional amount gets placed into the adopted stock versus the overall portfolio.
In an effort to not make one stock too overvalued in my portfolio, I won’t commit to placing every additional amount into that adopted stock. I will only pledge to add enough money to that adopted stock to purchase at least one additional share. Depending on the share price, I may purchase several more shares as well as contribute to the overall portfolio, but that determination will be made on a case by case basis.
Conclusion
I think about my portfolio constantly and ways to get money out of my pocket into my dividend portfolio. I have a strong desire to rebuild the portfolio as fast as possible, and this is one way to do it.
If I’m able to complete this challenge by the end of the year, I should have a portfolio balance of around $10,000. I hope it will be more, but I don’t want it to be any less. We shall see.
What did you think of this post? Let me know your thoughts by commenting below.
Geting back agresivly. Nice. Looks like a good time for that. Good luck!
Ya, I’m just hoping things work out as planned. Thanks!
Why not just add $1000 each month no mattert what? Go all in. What happens if your 4000 portfolio goes down to say 3200, i assume your putting $800 in?
Hey Nicholas, great question. The reason why I don’t just add $1000 per month is because I’m not sure I can do that every month. I wanted my goals to be realistic. Right now, I have a minimum of $500, because I expect that with my current income and expenses, I should be able to meet that. Some months I have extra and I try to devote the extra in the stock market. But, I don’t think I can afford to do $1000.
If the portfolio goes down to $3200, then yes, I would put $800 in, but only if I have it! I didn’t want to create a goal that I would consistently fail at. Although, I am mindful of the quote by Michelangelo which says, “The greater danger for most of us lies not in setting our aim too high and falling short, but in setting our aim too low, and achieving our mark.” I think I’ve struck an appropriate balance with the $1000 a month challenge.
Again, great question.
good luck with your target.
Thanks Kiddies. Where there’s a will, there’s a way!
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You do have a similar way of investing like I do. I don’t have a unique name to go towards each style though. Keep it up! I, also spend a chunk of time thinking of ways to make the investing process interesting and fun. It is what drives us to save more towards our future.
Welcome back again Cntrysky. Glad we share similar investing styles. It’s sometimes hard to keep motivated, and even when motivated, it’s hard to keep investing in this day and age. There are so many distractions and alternatives as far as what to do with your money. But, I think it’s important to keep investment goals in focus, and do whatever you can to keep the momentum going.
Thanks again for stopping by.
At the moment, I’m reassessing my portfolio. I’ve sold 5 out of 23 different stocks entirely in under 10 days- somewhat regretting only one. I figured that one had gone too high too soon from what I considered to be fair value especially in the crazy market period we are in. Based on my research spreadsheet, it’s 5yr yield average to current annual yield at today’s share price makes it just above fair value towards the overvalued side. It went above its June 5th spike after going lower and somewhat flat for a while so I took it. Couldn’t resist. I could have waited a bit longer though based on the yield comparison for fair value. All other valuations on it are quite good in my opinion after reviewing it just now so that’s why I have regret – but, I’ll wait. “It is what it is” It’s on the watch list again.
I’m talking about National Bank. NA.TO I should have eventually put a stop loss in place at my sell price instead but there’s no knowing where it may have gone. I previously averaged at 60, sold at 66.25 when it had spiked from around 52.25 in under two weeks. A nice gain from being negative since March. That’s a quick sudden 25% for a bank stock. I found that odd. Normally, my plan was to not sell anything until retirement. It was sold based on a plan I’ll mention. I could have just kept on adding to it to hopefully lower my average on a good company like that one. I do have about 20-25 years to go for a “normal” retirement.
To be honest, I am a little spooked with the way the market is going. Market cap to GDP is out of whack. – but it has been that way for a while – only getting worse. This pandemic in the mix makes things a bit different. The market is rather overvalued at the moment especially when there are too many people jobless and near eviction (or are homeless now). School is starting up again soon too. There will more than likely be a huge spike in cases that will further spook the market. That does create opportunities though. Lots of money tossed into this to bring us where we are now though. It isn’t that easy at the moment to find good deals out there.
Within the last two weeks, I thinking of selling everything and wait for a correction being that I was finally a few hundred over break even – but what’s the point when the money isn’t needed for another 20 or so years? The funds in the TFSA are separate from the emergency fund. Yet, who knows what may happen as we carry on with this pandemic. I did stop aggressively overpaying my mortgage since March.
Luckily, my wife and I are still employed and better off as there’s no daycare cost since March and for the next quarter or so. I’ll soon be teaching the little squirt again when I get home each day.
Thanks for sharing your story. As I’m not a financial advisor, I can’t begin to tell you what you should do in your situation. However, I can say that I’ve never been good at timing the market, and, in general, the average investor is not. Because of that, I dollar cost average my way into the market and so I don’t really worry what the market is doing because I too have a long-term investment horizon. I would be lying if I said the markets didn’t seem scary at times and I agree with you that the market does appear to be overvalued at the moment, making it difficult to find good deals. Ultimately, you’re going to have to do what you think is best for your situation, but whatever you decide, good luck.
I know you said you stopped aggressively paying off your mortgage in March. I’m struggling with that decision right now. On the one hand, it would be nice to have a paid-off house, but on the other hand, I feel like I’ll be losing out on hundreds of thousands of dollars if I choose to pay off my mortgage early – because I wouldn’t be using that money to invest instead. So, it’s a very tough decision for me. I may write a post on this soon actually.
But, what I decided to do was tie my decision back to my original goal which is to have a paid-off house (or two) by the time I retire, which is about 15 years from now. So, I’ve been prepaying my 30-year mortgage to get it paid off in half the time. However, I still second guess that decision every day, which is not a good thing.