Inspired by FI blogger, SugarMamma, I’ve been inspired to try out her idea of a $1000 project as my first step towards FI.
I came across SugarMamma while youtubing FI videos and by luck one of her videos popped up in my youtube recommended feed. I particularly like it as her style and lifestyle is more relatable than other FI coupon-cutting frugallers; she’s clearly loves designer and minimalism (tick tick tick in my books), simplifies ways to save money to invest and also is Sydney-based like Miss Piggy here. I’ve never met or talked with Canna Campbell (the blogger behind SugarMamma) but hopefully one day will be able to sit down and chat over coffee or a cocktail and talk FI!
So, what is the $1000 project?
The $1000 project focuses on using savings to build passive income, that is, money from non-active long-term investing in assets which will generate an income. Investments that you don’t need to actively monitor day in, day out and instead leave alone to make you money.
Any money that I pull together from savings, cutting down on lifestyle expenses or additional income streams I will put aside in a separate investment account. Once I’ve reached $1000, I’ll invest this into shares, real estate, bonds or any other asset classes which will generate me a passive income.
I am going to take this further by focusing on value investing instead of speculation. I’m still learning about the distinction between the two but, using shares as an example, value investing is long-term investing in companies which have sound and stable business operations and are priced in the market lower than their intrinsic value (figuring out the latter is going to be a learning curve for me). The opposite to value investing is speculation i.e. risky gambling in the short term that a stock or asset will increase in value. I’m reading a classic finance book called ‘The Intelligent Investor’ by Benjamin Graham at the moment which is all about value investing so this is giving me some good ideas how to become a guru in investing.
Keep posted for how I saved my first $1000 and how I’m going to invest it!
xx Miss Piggy