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What Investing DAILY vs MONTHLY Looks Like After 1 Year
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What Investing DAILY vs MONTHLY Looks Like After 1 Year

Introduction and Investing Strategy

The speaker shares their experience of investing $5 every day starting in January 2022. They discuss the surprising amount of money saved and invested in the stock market. A comment is mentioned, questioning the benefit of daily investments compared to monthly investments.

Daily vs Monthly Investments

  • A comment suggests that investing monthly would yield the same outcome as daily investments.
  • The speaker acknowledges this as a valid point and decides to compare daily and monthly investment strategies.

Purpose of Daily vs Monthly Comparison

The speaker explains that the purpose of comparing daily and monthly investments is to determine if there are any advantages or disadvantages to each strategy. They mention using a specific ETF (Exchange-Traded Fund) called VOO, which tracks the S&P 500 index.

Investing Strategy with VOO

  • The speaker has been investing $5 every day since January 2022 in VOO.
  • VOO tracks the top 500 companies in America (S&P 500).
  • Investing in VOO provides immediate diversification across all 500 companies.
  • Historically, the S&P 500 has grown at an average rate of 10% per year.

Using Google Sheets for Stock Price Data

The speaker demonstrates how to use Google Sheets to access historical stock price data. They explain a formula that retrieves daily closing prices for a given stock.

Accessing Stock Price Data with Google Sheets

  • Google Sheets offers a formula (=GOOGLEFINANCE) to retrieve historical stock prices.
  • By entering =GOOGLEFINANCE("VOO", "close", DATE(2022,1,1), DATE(2022,12,31), "DAILY"), the speaker retrieves the closing prices of VOO for each day in 2022.
  • The formula can be modified to retrieve data for other stocks, such as Apple (AAPL).

Comparison of Daily and Yearly Investments

The speaker compares the outcome of daily investments with a hypothetical scenario of investing a lump sum at the beginning of the year.

Investing $10,000 on January 3rd

  • If $10,000 was invested on January 3rd, 2022, at a price of $439 per share, the value would have decreased to $351 per share by the end of the year.
  • This demonstrates a significant loss on the initial investment.

Calculating Daily and Monthly Investments

The speaker explains how they calculated their daily and monthly investments using Google Sheets. They mention fractional investing through Robinhood.

Calculation Methodology

  • The speaker recorded their daily investments based on the stock price each day.
  • Using Robinhood's fractional investing feature, they were able to invest less than a full share with just $5 per day.
  • At the end of the year, they accumulated over five shares through daily investments.

Conclusion and Benefits of Daily Investments

The speaker concludes that even though they compared monthly investments with their daily investment strategy, they found benefits in both approaches. They highlight how daily investments allowed them to accumulate shares gradually with limited funds.

Benefits of Daily Investments

  • Daily investments allowed gradual accumulation of shares with limited funds.
  • Monthly investments may require larger lump sums upfront.
  • Both strategies have their advantages depending on individual circumstances.

Timestamps are approximate and may vary slightly depending on video playback.

Investing Daily vs Monthly

In this section, the speaker discusses the difference between investing daily and monthly, using a specific example. They compare the number of shares acquired and the average cost of investment for both methods.

Comparison of Daily and Monthly Investments

  • The speaker buys stocks month by month and compares the results of daily investments versus monthly investments in 2022.
  • In January, investing $5 every day resulted in acquiring more shares compared to a one-time investment of $105 on January 3rd.
  • By investing daily, they took advantage of dips in stock prices during January, resulting in a higher share count.
  • In February, due to fewer trading days, the difference between daily and monthly investments was less significant.
  • Overall, throughout 2022, investing $5 every day resulted in a higher share count compared to a $105 monthly investment.

Average Cost and Portfolio Balance

  • The average cost per share for daily investments was $375.98.
  • If the stock price reaches or exceeds this average cost, it will result in positive returns; otherwise, there may be losses.
  • The average cost per share for monthly investments was slightly higher at $381.86.
  • Currently, with the stock market down, the portfolio balance for daily investments is $1,241 based on multiplying the current stock price by the number of shares acquired through daily investments.
  • For monthly investments, the portfolio balance is lower at $1,218.

Considerations and Risks

  • Investing always carries risks; it is essential to conduct thorough research and be prepared for market fluctuations.
  • The speaker emphasizes that the results of daily versus monthly investments depend on the market conditions, and it is impossible to predict future performance accurately.

The transcript is in English, so the summary and study notes are also provided in English.

The Power of Compound Interest

In this section, the speaker discusses the power of compound interest and how it can help grow your wealth over time.

Understanding Compound Interest

  • Compound interest allows your money to grow exponentially over time.
  • By consistently investing a small amount each month, you can accumulate significant wealth in the long run.
  • The average growth rate of the S&P 500 is used as an example for calculating compound interest.

Example Calculation

  • Assuming a monthly contribution of $105 and an average annual growth rate of 10%, after 40 years, the ending balance would be $592,186.
  • This calculation demonstrates that even with just $5 a day or $105 a month, substantial wealth can be accumulated.

Increasing Contributions

  • To achieve even greater results, it is important to scale up income and increase investment amounts.
  • Doubling the daily contribution to $10 or increasing monthly contributions to $200 can significantly impact the final balance.
  • Starting early allows more time for investments to grow and compound.

Adjusting for Inflation

  • Some may argue that inflation will erode the value of money over time.
  • However, it is essential to have a plan in place to combat inflation by increasing investments or finding ways to make more than a million dollars.

Conclusion

  • Taking advantage of compound interest early on can lead to substantial wealth accumulation.
  • It's crucial not to give up if starting later in life but rather focus on increasing investment amounts and holding off for an extended period.
Video description

What if you invest each month instead of each day? In this video, we will look back to 2022 and compare investing $5 per day versus just one time per MONTH. This is a continuation of the video on what $5 per day looks like after one year: https://www.youtube.com/watch?v=WpXw_ejAqsk Join me on Patreon for more exclusive content ► http://patreon.com/BobSharpe STUFF I RECOMMEND!* Investing Apps and Tools: 🤑 Robinhood App - Get A Free Share of Stock valued between $2.50 and $200 Just for Starting ► http://sweetlifesuccess.com/go/robinhood 🐂 Webull App - get FREE stocks (limited time) ► http://sweetlifesuccess.com/go/webull 💰 Seeking Alpha - get the best research tools to stay ahead in your stock and ETF research. Receive 50% off on a Premium Membership ► http://sweetlifesuccess.com/go/seekingalpha 💰 Track Your Dividends ► https://sweetlifesuccess.com/go/dividends Credit Cards & Credit Score: ✅ Check Your Credit Score for Free at Credit Karma ► http://sweetlifesuccess.com/go/creditkarma 💳 Apply for an American Express Card with this link. We can both get rewarded if you're approved ► http://sweetlifesuccess.com/go/amex #investing #investingforbeginners #robinhoodportfolio Well, I decided to invest $5 every single day starting last year in January of 2022. And it was really surprising to me not only how much money I was able to save up over the last year, but also how much money I was actually able to invest into the stock market. But then I got this comment: "Correct me if I'm wrong, but if you just bought monthly, you would have ended up with exactly the same outcome." In this video, I'm sharing with you the results of a study I did comparing daily and monthly investing. The study found that monthly investing outperformed daily investing by a large margin! If you're looking to invest your money in a way that will provide you with a steady stream of passive income, monthly investing is definitely the way to go! Not only will monthly investing result in more growth over the long term, but it also allows you to avoid large fluctuations in the stock market. Check out this video to learn more about the results of my study and decide for yourself whether monthly investing is the right choice for you! Thank you for watching the entire video! https://docs.google.com/spreadsheets/d/1O8r8I5Pa47LNK3DLhX0z3zFR8QzRuOOWaZgkPnXhZ-U/edit?usp=sharing *Disclaimer: Bob is not a financial advisor. Please contact a professional financial advisor prior to making any decisions. Some of the links and other products that appear on this video are from companies in which Bob Sharpe earns an affiliate commission or referral bonus. Bob Sharpe is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available.