Building a New Sustainable Income Stream – $50 at a Time

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Now that I have setup my investment challenge account, it is time to start putting some of my savings to work. Over the first month of this challenge, I have transferred $216.50 into this account from a variety of sources.

A portion of that total came from the $50 increase in take home pay that I started bringing in at the beginning of the year. I dropped coverage in one of my work place benefits that resulted in $50 more in pay each month. I decided that since this money wasn’t in my monthly budget, I was going to use the increase to feed my investment challenge account.

Putting My Savings to Work

Instead of letting my savings pile up in my investment challenge account, I plan to actively invest it in dividend stocks. I am not currently earning any interest on this money, so it doesn’t really matter when I start using it to invest. Just as long as I can buy stock commission free through LOYAL3 or Robinhood, there is no need to let the money pile up.

My initial plan is to setup a small feed of money each month into one of my brokerage accounts from this source of savings. My only rule is that I must start small and never let my challenge account drop below the $25 initial deposit.

Sustainable Income Stream

In order to prevent my investment challenge account falling below $25, I must make this a sustainable income stream. Each month I must make sure that my balance does not drop and hopefully goes up as I grow my sources of savings and income.

I have decided that since my $50 savings each month is sustainable (coming directly from my paycheck), I will start with a $50 investment in the stock market.

Note – If I buy stocks in LOYAL3, I can invest $50 directly into partial stock shares. However, if I invest in in stocks through Robinhood, I can only buy whole shares. This means that I may not invest $50 exactly every month.

Why Even Have a Investment Challenge Account?

It certainly would be a lot easier to just transfer money each month directly to my broker after I cash my check.

So why would I setup a process to transfer $50 from my paycheck into my investment challenge account each month? And then turn around and transfer another $50 from the investment challenge account to my broker?

I am doing it this way to help me stay motivated. I want to see my cash actually flowing from one account to the next. My hope is to have many sources of savings and income feeding my investment challenge account – which then directly feeds my brokerage account.

$50 Monthly Stock Investment

The end result of all of this is that I will have a new $50 investment each month into the stock market. This is money I didn’t have access to invest last year or the year before. It is new money from savings and income that will help me plant a new money sprout for the future.

I plan to track my progress as the year goes by, so make sure to check out future updates!

Note – I will also reserve the right to not purchase stocks if there are no attractive purchases available. I certainly don’t want to overpay for a stock just to say I did!

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Click Here to Leave a Comment Below 3 comments
DivHut - February 19, 2015

As long as you can maintain a decent to high savings rate and keep investing in high quality dividend stocks you should be OK long term. The key is to remain consistent with your purchases and watch that passive income snowball grow. Thanks for sharing.

Reply
    John - February 27, 2015

    @DivHut – Thanks for stopping by. I have tried to remain consistent in my monthly investments of dividend stocks for the past 3 or 4 years. My automated monthly investments help me stay consistent and avoid getting caught up in market news (good and bad)!

    Reply
Investment Challenge Account Updates for February – $595.45 Saved - March 5, 2015

[…] $50 was sent to the investment challenge account as a result in the increase in take home pay. This was February’s installment and this […]

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