The $1 Challenge
How much money would it take to have $1 per hour for you to spent? Think about how little that is in comparison to the regular thinks you buy in the morning, at lunch or for some food on the way home.
If you spent more than you can earn, you will always have to work for what you are spending. But how much would it take to beat that and use a system that the wealthy are using?
You can find the answer in this article, if you are willing to take on this challenge!
What is this challenge?
This challenge has basically 4 stages to reach. The first goal is to reach an interest gain of $1 per month and increase that to $1 per day, $1 per hour and $1 per minute.
These are simple goals, but harder to achieve than you might think. When you read this article, always keep in mind how much money you regularly spend in an hour on an average day. For example you go out to get something small to drink or eat. That can easily add up to $10.
Let's take a deeper look
The four main goals
This table shows the values you need to save up to gain this interest per month, day, hour and minute.
The formula used for that is based on the 4% FIRE safe withdrawal rule.
| Interest income | Annual Income | Required Portfolio (4%) |
|---|---|---|
| $1 per month | $12 | $300 |
| $1 per day | $365 | $9,125 |
| $1 per hour | $8,760 | $219,000 |
| $1 per minute | $525,600 | $13,140,000 |
Do you have $219,000 laying around? Me neither, but why is the thrid goal the interesting one? The answer to that is, that this is the amount of money that needs to be invested to "just" gain $1 an hour.
But how much do you regulary spent per hour?
Let's consider you have monthly costs of $5,000 for all your expenses. That is $6.94 of spending per hour for 24 hours straight each day for that month.
To just keep up with your spending, you would need to multiple the investment by 7 which results into $1.53 million that would be needed. Or you take this as a warning shot to reduce your expenses in such a way, that the inflication point of interest gains against your spending starts to go into your favor!
Take the challenge!
I have reached the first goal, but with a safer investment by building my emergency fund on a high-yield savings account.
My goal is to achieve the $1/day badge by the end of this year. For my savings account with 2.25% yield this can be calculated with the following formula:
KaTeX
\text{\$1 interest/day}
=
\frac{\$1 \times 24 \times 365}{\text{InvestmenYield}\%}
This means i need to save up $16.200.
KaTeX
\$16.222
=
\frac{\$1 \times 24 \times 365}{2.25\%}
How about you? Do you already gain $1 or $10 per hour or are you spending that much. Feel free to give your insights and join our club.
If you want to know more about that challenge or find people that have similar goals, then join our free community.