If you are following me on Instagram or on our Facebook page you will know that my car broke down this week. It was an old car and beyond economical repair, although we are still looking at some possibilities to recoup some funds. It has made me take a closer look at the numbers.
I had to buy another ‘new to me’ car to get me by. This wasn’t in my budget.
I have an emergency fund so I dipped into this. After all that’s what it’s for isn’t it? But it got me thinking about how I would both replace this EF and continue my investment journey.
My plan in October was to hold fast with my investments anyway, therefore this little ‘blip’ would not impact that strategy. However, November’s plan was to invest more in key projects.
There are some amazing projects being launched at the moment that are so so tempting. Historical renovation projects and plastic-free grocery stores, as an example, which sit very well with my ethical status.
I have always said that the amount of money you need in order to make money out of this investment strategy is much lower than you would expect. Obviously the returns are percentage related and therefore the more you invest, the more you earn.
However, incremental deposits along with compound interest and reinvestment, really do get you a foot in the door. It serves as a perfectly satisfactory first step on the road to your goal (whatever that is).
How Small is Small
Many of the platforms I invest in will accept investments as low as 10 Euros. This is an entry level, almost anyone can afford. It is about the same cost as an individual pepperoni pizza in the UK (Pizza Hut).
So let’s take a look at the numbers more closely. Imagine adding just 10 Euros to your piggy bank each week. This would give you a nice little pot at the end of the year (520 Euros). Now keep adding to this pot every week for a total of 5 years and you’ll have 2600 Euros.
That would pay for a nice treat or pay off some debt or go towards a college or retirement fund. There is nothing wrong with that at all.
But consider for just a moment if you invested the same amount into P2P at an average of 12% APR you would then have just over 1000 Euros more at the end of this term.
No, it’s not a fortune, but I’m guessing it would help!
Practicing What I Preach
I am therefore, going to practice what I preach and use my additional funds this month to:
1. Pay debt back to myself, in the form of replenishing my Emergency Fund
2. Drip feed extra cash into my currently running investments
3. Move money around inside my portfolio to focus on my Ethical Strategy.
I’m actually quite excited by this, as I love getting into the weeds and being strong about my desire to build a fully ethical portfolio.
I will be writing an article on this process as I move forward with this goal so keep an eye out for it.
Understand your goal, read my Freedom article and see what this means for you. Why do you need to save, how much do you need? Take a look at the numbers specific to you.
Check out my Planning article and start to understand what you need to do to achieve your goal.
Remember, everything starts with the first step and the sooner you start, the sooner you will get a result. Don’t forget too, you can get my free guide that will help you do this for yourself and I’m always on the end of an email for support if you start to struggle.