Smart Wealth Insider (4th Edition)

January 20, 2025

Welcome to Smart Wealth Insider

In today’s edition:

  • Wealth tip of the week

  • Wealth-building challenge of the week

  • (Based on topic to be discussed)

  • And more…

This is approximately a 3-minute read.

Wealth Tip of the Week

"The best time to plant a tree was 20 years ago. The second best time is now." 

- Chinese Proverb.

Wealth Building Challenge of the Week

🎯 THIS WEEK'S WEALTH CHALLENGE: The "Coffee Can Portfolio"

Ever heard of the "Coffee Can Portfolio"? It's an old-school investing technique where ranchers would store their most valuable documents in coffee cans for safekeeping. Here's your modern version:

  1. Find 5 items you regularly spend money on (coffee, subscriptions, takeout, etc.)

  2. Track exactly how much you spend on these items for just one week

  3. Calculate how much one of these expenses would cost over a year

  4. Open a free investment account and commit to investing that amount in an index fund

Example: Daily coffee shop visit = $4.50 Weekly = $31.50 Yearly = $1,638 (!!)

Share your "coffee can" discovery with us next week – what spending surprise did you uncover? Tag us on social media with #WealthChallengeUnlocked

Next week, we'll highlight the most interesting findings and share how some readers are turning their daily expenses into investment opportunities!

Deep Dive

Ever wondered what would happen if you invested just $100 in different places?

Well, someone did exactly that – and the results might surprise you.

🚀 The Shocking Winner: Cryptocurrency 

A $100 Bitcoin investment ballooned to $652.24 – that's a mind-boggling 552.24% return! But before you rush to empty your wallet into crypto, remember this comes with a massive asterisk. Crypto showed the highest volatility of all investments tested, and many cryptocurrencies actually went to zero during this period.

📊 The Steady Climber: Index Funds 

While less dramatic than crypto, index funds proved why they're a favorite among long-term investors. The $100 grew to $179.57 – a solid 79.57% return. Think of index funds as buying a tiny slice of hundreds of major companies at once. It's like having your eggs in many baskets instead of just one.

💰 The Traditional Safe Haven: Gold 

Our shiny friend didn't disappoint, turning $100 into $140.10 (40.1% return). Gold lived up to its reputation as a steady store of value, proving especially useful during periods of economic uncertainty.

🏢 The Real Estate Play: REITs 

Real Estate Investment Trusts (REITs) showed interesting results. While the initial investment dipped slightly to $98.59, dividend payments of $11.93 resulted in a total return of 10.52%. Think of REITs as a way to become a landlord without actually buying property – you get the benefits of real estate ownership with much less hassle.

📱 The Individual Stock Gamble: Samsung 

Here's where luck plays a huge role. The Samsung stock investment dropped to $67.76 (a -32.24% return). However, if that same $100 had been invested in Nvidia, it would have grown to $908! This perfectly illustrates why picking individual stocks can be risky – you might hit the jackpot, or you might take a significant loss.

Key Takeaways For Your $100:

  • Higher returns typically come with higher risks (looking at you, crypto!)

  • Diversification matters – spreading investments across different assets can help manage risk

  • Don't overlook "boring" investments like index funds – slow and steady can win the race

  • Regular dividend payments (like from REITs) can add up over time

  • Starting small is better than not starting at all

Remember: These results reflect a specific four-year period and aren't guaranteed to repeat. The best investment strategy depends on your personal goals, risk tolerance, and time horizon.

Want to get started? Many investing apps now offer fractional shares, meaning you can begin with small amounts in any of these investments. Just remember to do your research and never invest more than you can afford to lose.

Next week, we'll dive deeper into how to set up your first investment account and avoid common beginner mistakes. Stay tuned!

Connect With Me

If you want to connect, reply to this email with your thoughts and what you’d like to see moving forward.

I’d love to hear from you.

Stay wealthy,

-Matthew

Disclaimer: This is not FINANCIAL ADVICE