The 1,000 day money challenge everyone – rich and poor – should begin today.

Financial literacy is one of the biggest obstacles to wealth building in contemporary Western society. While inflation and other economic factors have certainly increased the difficulties for average citizens, the temptations of credit cards and the 24/7 individualized marketing we are subjected to on our mobile devices and computers often make us spend wastefully and needlessly, further distancing us from wealth goals. 

Minnesota personal finance advisor Bob Sharpe has developed a following from sweetlifesuccess.com blog and his YouTube help videos. With a combination of humor, a friendly, humble demeanor, and solid, time-tested financial principles, Sharpe can be likened to a Millennial Dave Ramsey. 

In order to show the fallacy behind the notion that only people with lots of money can invest to build wealth, Sharpe posted a video in which he did a small investment every day for 1,000 days, and then posted the results after it was completed. 

$5.00 A Day – Less Than a Starbucks Caffe Latte

Sharpe explained that his demonstration started on January 1st, 2022, and would last until it ended on September 27, 2024. The amount was a mere $5 per day, which is less than the price of a daily Starbucks Caffe Latte, for the basis of comparison. Investing in a couple of different asset classes, Sharpe showed in hard numbers how just a little bit a day could achieve significantly sized returns. SInce he jokingly referred to himself as a “rogue” kind of guy, Sharpe did one cryptocurrency and one ETF investment.

Ethereum (ETH) 

• At $5 per day for 1,000 days, total investment in Ethereum was $5,000
• Cryptocurrency markets are 24/7 and trade in watchable real time.
• Portfolio value at the end of the test was $6,504.13
• Total return was $1,612.39 (+32.95%)

Vanguard S&P 500 ETF (NYSE: VOO)

• At $5 per day for 1,000 days, total investment in VOO was $5,000
• As the stock market is closed on weekends and holidays, investments were roughly $7.27 per day on trading days, averaging out to $5 per day over the course of 1,000 days.
• Portfolio value at the end of the test was $6,606.03
• Total return was $1,503.80 (+29.47%)
• VOO returns also paid a dividend roughly $20-25 per quarter, which was added to the portfolio value, as a reinvestment. 
• The other advantages to an ETF are low fees and no commission charges for reinvesting dividends and daily contributions through sites like webull.com or others, since other brokers may charge $10 per transaction, which would negate the efficacy of the approach. 

Bob Sharpe explained that when doing a daily incremental investment strategy into a single asset, such as an ETF, it was effectively a dollar cost averaging approach. This means that the investment amount remains constant and on schedule, regardless of whether the market was up or down for that day or for the course of weeks, or more. The underlying principle is that the overall average was in the investor’s favor, so buying more when the market was low makes for a reduced average cost and greater upside down the road. 

Thoughtful and Prudent Money Management

Sharpe asked his viewers to take a hard look at their spending habits and ask themselves if they could name anything that they were wasting their money on that was as little as $5 per day which could better be put to use for these types of investments. He cited a statistic that showed that the average American spends $82 per month just on store-bought coffee. 

The point Sharpe wished to emphasize was that by forgoing something like take-out coffee and investing it instead, the resulting profits could be used for a vacation, a car down payment, or even growing a portfolio further.

Bob Sharpe also advises the following 2 priorities to help the wealth-building process, which are echoed by Dave Ramsey and others:

• Emergency Fund – a liquid cash buffer fund on hand to pay for unforeseen expenses, like an auto repair, an illness, etc. so that credit cards or dipping into the investment fund can be avoided.
• Eliminate Credit Card Debt – Sharpe strongly believes in being debt free so that one works for themself, not to pay American Express or Chase Bank.

The 1,000 day investment challenge is tangible evidence as to how little amounts can snowball into a nice-sized first step into investing with much larger returns. It is a principle that one can continue no matter what income level they are in to generate personal results and wealth. 

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