Experiment: investing $100/month during 24 months

Two years ago, I was researching a 529 plan. It is a savings plan designed to save and pay for education. The goal was to start saving a little for my kids' education. I don’t remember what exactly stopped me from doing the 529 plan, but I decided to start saving at least $100 per month. I thought that $100 is not a big deal, and it won’t affect my finances. But over the next 15 years, it should be $18,000 dollars. I could use the money to help my daughter to buy a car or maybe help her pay for education.

But what if I not only save the money but also invest it? I don’t have much experience, but I have traded some stocks here and there. I tried some short-term and long-term investments.

I told my wife about the idea, received approval, and set up a $100 monthly wire transfer to a broker account. In June 2021, it’s been exactly 24 months of me doing it, and here is how it worked.

Every half a year or so, whenever I remember about the experiment, I would log into my account and buy some stocks. I don’t have time to research a lot, so I would just buy some companies that I know, something that I heard about from friends or something that I have seen on the internet. Here are some tickers that I had in my portfolio — RDFN, LMND, SPY, SFT, AAPL, MU, PLTR, FTCH. I bought Lemonade (LMND) because one of my friends got insurance through them and told me about the experience. I bought Shift Technologies (SFT) because one of my relatives actually tried to purchase a car and liked the experience. I bought SPY in March 2020 when I listened to Dave Ramsey about funds investment.

Sometimes I would hold and sometimes I would sell to buy something else. Every time I sold, I was green. And now, instead of the $2,400 that I should’ve saved in 24 months, I have $3,766.23 on my account.

When my daughter plays with other kids and they start bragging about things they own, I need to teach my little one to say — “I own Apple stocks.” :)

What did I learn?

Saving a small, insignificant amount over the years becomes thousands. I can probably apply the same approach to some other savings that need to be made. For example, I can set $200 aside each month for the next five years and use the $12,000 that I save towards my next car upgrade.

This kind of saving and investment fits me perfectly. I don’t have to stress about it because it is only $100 a month. I can review it and buy more stocks whenever I have time. I can casually invest whenever I hear about some stock from friends who trade often.

If some stock is red, I know I can keep holding it because, most likely, the stock will recover in the next couple of years.

I discovered that holding stocks for over a year will result in paying less capital gain taxes. Once I figured it out, I decided not to close positions less than a year old.

Conclusion

Overall, it was a great experiment. Will I continue doing it? I sure will. It was fun, and it worked out great. I am even thinking about bumping it up to $200/month for the next two years and see how it would look like in the end.