100K Investment Challenge – The Review

Back in early April of last year, I challenged myself to hit a stretch goal of having 100K invested in index funds by the end of the year. After a couple of months, I decided to broaden the challenge to also include loan notes as well as crypto.

Now that we’ve reached 2022, it’s time for a full review. Did I complete the challenge, or did I come up short? Before we get to the final review, let’s recap how this challenge started.

Why am I doing this challenge?

The desire to get to 100K invested was driven by a couple factors.

• Getting the first 100K invested is the hardest – after that, compound interest really kicks in, so I wanted to reach this milestone as fast as possible
• A portfolio review at the beginning of the year demonstrated that I was cash-rich, stock-poor and probably over-invested in pension funds for my age

Based on these findings, I decided to make 2021 all about boosting my stock market exposure. It seems that I picked a great year to do so, as the S&P 500 closed the year with a total return of 28.7% including dividends, and other markets across the world performed similarly well.

How did the challenge go?

I started the year with just 5K invested in an index fund and formulated the challenge goal in early April.

By the first check-in at the beginning of June, I had reached 45.8K invested across my three target categories. To achieve that, I moved money from a pension fund into the challenge, sold down parts of a single stock position, got rid of my my actively managed fund and invested the proceeds in the challenge, shifted some cash reserves after re-evaluating my emergency fund size and contributed new savings.

At the end of August, I had added another 21K, mostly resulting from working down my cash positions, selling down my single stock position as well as investing some fresh cash.

By the end of November, I was close to the target standing at 83K invested, with most of the added money coming from closing down one of my pension funds. However, I was running out runway, with the end of the year quickly approaching.

So where did I end up?

I am pleased to report that I am closing the year with 89.5K invested across my three target categories. While this is short of the goal, it is significantly above my estimated realistic ceiling of getting to 80K, and way past my original goal of investing 20K in 2021.

At the end of November, I predicted that I could get to just about 90K. That’s pretty much exactly where I ended up, after investing the proceeds from selling my gold as well as adding new money from my last two paychecks of the year.

Chart by LadyFIRE, made with MS Excel

Was this a failure?

Absolutely not. I set the goal of reaching 100K invested knowing that I probably would not achieve it. However, setting an ambitious target meant that I would need to really pull out all the stops if I wanted to get anywhere close. I am convinced that I would have invested considerably less if I had set a lower goal.

Also, while I did say when starting this challenge that I would not win it based on capital appreciation, my investments across the three categories were worth a total of 102.6K at the end of 2021!

Therefore, even though I did not reach the challenge goal, I am now sitting at more than 100K invested in those three areas. To me, that makes this challenge a resounding success, and I’m so glad that I did it!

What is next?

If I really wanted to, I could have invested another 10.5K of cash buffer to meet the challenge goal. However, I said at the beginning of the challenge that I would not go to any extreme lengths to hit the target.

The reason that I did not want to push more cash into the challenge is that I am currently in a bit of an uncertain situation related to two real estate investments. Thus, I would rather keep a little more cash on hand to be safe.

This is also the reason why it is currently difficult for me to formulate concrete goals for 2022. A lot will depend on how both of these real estate investments turn out over the next few months.

I will be sure to update you all once there is a little more clarity on these, so I will likely set my 2022 goals a little later this year too. Since this challenge started last April, I see no reason to rush the goal setting just because it is January now.

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Did you meet your financial goals last year? What did you learn along the way? And did you make any goals for 2022 yet? Would love to know what you all are hoping to accomplish this year!