The £10-a-week investment challenge

Building wealth doesn’t have to be complicated or require large amounts of money upfront. If you’ve ever thought that investing is only for the wealthy or for those who can afford to invest large sums, think again. I’m starting this challenge with the purpose of showing you how small, consistent investments can lead to big results over time (hopefully, I don’t lose it all! :D). For The £10-a-Week Investment Challenge, I’ll be investing £10 every week in three categories. That’s £30 per week and somewhere between £120-£150 a month, all spread out across a diversified portfolio.

In this post, I’ll explain how this challenge works, why I’ve chosen these categories, and how I will try to report it.

What is the £10-a-Week Investment Challenge?

In this challenge, I’m committing to invest £10 per week into each of three distinct categories, giving me a total of £30 per week and £120-£150 per month. The goal is to build a diversified portfolio by investing in a mix of growth stocks, dividend stocks and the S&P 500 ETF (VUSA). This approach helps spread risk while providing exposure to different segments of the market, which can help smooth out volatility and increase the chances for growth.

Here’s how I’m splitting the £10-per-week investment:

1. Growth Stocks
2. Dividend Stocks
3. S&P 500 ETF (VUSA)

Each category will receive £10 per week, which adds up to £30 per week or £120 per month.

How Does the £10-a-Week Investment Challenge Work?

The beauty of this challenge lies in its simplicity and consistency. By committing to invest £10 per week in each category, I’m making regular, small investments that add up over time. Here’s a closer look at how it works:

• Growth Stocks: £10 per week
• Dividend Stocks: £10 per week
• S&P 500 ETF (VUSA): £10 per week

At the end of the month, I’ll have invested £30 per week, adding up to £120 per month. This means I’m continuously building my portfolio while minimizing the risk of trying to time the market with large lump-sum investments. The idea is to spread out my investments consistently and see the long-term growth potential of small, regular contributions.

Why Invest in These Categories?

You may be wondering why I’ve chosen these four categories. Here’s the rationale behind each one:

1. Growth Stocks: These stocks are from companies that have high growth potential, often in emerging or fast-growing industries like technology or biotech. Although they can be volatile in the short term, growth stocks can offer significant returns over the long run if the companies succeed. By investing £10 a week in this category, I’m looking to capture high-growth opportunities.
2. Dividend Stocks: Dividend stocks are known for paying regular dividends to shareholders. These stocks tend to be more stable, with slower but steady growth. By investing in dividend stocks, I’m able to build a source of passive income while also benefiting from potential long-term price appreciation. This category provides balance and stability to my portfolio.
3. S&P 500 ETF (VUSA): The S&P 500 is one of the most widely followed stock indices, representing 500 of the largest companies in the U.S. By investing in an ETF like VUSA, I’m getting exposure to the overall market without needing to pick individual stocks. This is my safer investment, providing broad diversification, lower risk, and steady long-term growth.

Why Invest Weekly?

Investing £10 per week into each category, rather than making a single lump sum investment at the start of the month, has several key advantages. The most important is dollar-cost averaging, a strategy where I invest a fixed amount at regular intervals regardless of market conditions. Note that for me, this will be pounds, although most of the shares purchase will be in US Dollars. This approach has several benefits:

1. Reduces Risk: Dollar-cost average helps mitigate the risk of investing all your money at a market high. By investing weekly, I’m buying at different price points and reducing the chance of making a large investment at the wrong time.
2. Builds Consistency: Committing to a weekly investment habit makes it easier to stay disciplined. By sticking to a set schedule, I’m avoiding emotional decision-making and staying on track with my long-term financial goals.
3. Simplifies the Process: Instead of overthinking or waiting for the “perfect” time to invest, the weekly approach makes it easy. £10 a week isn’t intimidating, and it’s a manageable amount that doesn’t require a lot of extra planning or effort.
4. Takes Advantage of Market Volatility: Because I’m investing regularly, I’ll be able to buy more shares when prices are low and fewer shares when prices are high. Over time, this can help smooth out the effects of market ups and downs.

The Power of Small Investments

You might be asking, “How much can £10 a week really do?” The answer is more than you think. By consistently investing small amounts each week, I’m giving my money the opportunity to grow and compound over time. Thanks to the power of compound interest, even small investments can accumulate into significant amounts over the years.

For example, if I invest £10 each week, that adds up to £520 over a year. While this may seem modest, the key is to stay consistent, reinvest dividends, and let time work its magic. Over the long term, small investments can lead to big rewards, unless that is what professionals say. There is only a way to check it, doing it myself.

How often will be reported?

While I will try to post about my progress and purchases weekly, I have a family and a job that takes most of my time, so in occasions that time frame might be longer. Regardless of posting progress or not, I will carry on with the purchases weekly and reporting as often as I can being the most transparent on my reports.

Get ready for 2025! My 3-way investment challenge will start in the new year!