Hi everyone and welcome to the first official update in the £40k challenge. I’m still thinking about whether to do this monthly or quarterly but could provide better insight monthly, however, the posts will naturally be shorter. But I’m happy to hear your thoughts.
January, for most people, is financially a poor month coming off the back of the Christmas period. However, with most of the country still spending most of their time at home this has provided one of the first low-cost December months that I can remember for some time.
Usually, my December is filled with socialising with both friends and family that I’ve not seen for the previous year. It looks like January could provide the perfect launchpad for the next 24 months.
Why am I publishing this journey?
If you’re new to this site or challenge then this is my way to track my progress towards the financial goal which will allow me to join the property ladder in London. This is not to gloat or boast but to provide me with accountability that I have severely lacked over the last few years which has scuppered my previous saving attempts.
I’m just a normal person working a 9-5 trying to get ahead like everyone else and hope that these posts might inspire others to get serious about their finances too.
Building Passive Income
It’s clear that whether I’m trying to build a house deposit or get ahead in life that multiple streams of income are important. This is why this remains my key focuses once my expenses have been cut to the minimum level.
Passive income can be generated in multiple ways from rental properties to dividend stocks. The idea is that these multiple streams of income grow to where they can begin to cover a significant amount of my fixed monthly costs.
What happened this month?
Cleared Credit Card Debt
The first thing was to ensure I was saving from a good foundation. There’s often been a debate about whether you should start saving first or clear any remaining debt. For me, this is a no brainer that you need to start saving from a clean slate without the worry of any debt.
This meant that I cleared my credit card debt which while this was only a few hundred pounds it removed the mental bandwidth that this was taking. I haven’t closed the account as I plan to continue using the card to build my credit score which will then aid in being approved for a mortgage.
Affiliate Marketing – £170.13
I currently have two affiliate marketing websites that I have built to provide additional income for the challenge. This involves creating content where I review specific products and if a user clicks through my link then I receive a commission from the seller.
I’m predominately using Amazon as my affiliate partner/publisher due to the scale of their site with the millions of products that they provide. By targeting buyer intent keywords leads to the highest conversion rates with most of my traffic being driven via search engines such as Google.
Site 1 – Sleep Site
The first site reviews sleep products so think of mattresses, pillows, duvets etc. This site is generally quite seasonal so the earnings are fairly low this month especially compared to the Christmas holiday gift-giving period.
Site 2 – Outdoor site
The second site is based around outdoor camping and caravan products so again another seasonal site that you’d expect would pick up in the summer especially as people can begin to travel again in a few months.
Both sites are still growing and I hope that I can also add new sites to my portfolio to increase the amount that I can save into the deposit challenge.
Investments – £750
The investments I made were simple this month. I opened a trading ISA account which required a minimum of £250. I’ve previously done a lot of research about different investment approaches and the difference between a passive and active investor.
I’ve decided that I am very much a passive investor as I don’t have the time to commit to keeping my ears to the ground about the latest developments in different companies. This makes index funds my ideal choice.
I have a low-risk tolerance and know I am the type to not hold the course if things were to dramatically swing which swiftly rules me out of cryptocurrency and other higher risk tolerance plays.
Total House Deposit Savings Balance: £741.83
Overall I’m happy with the start of the year. This month was all about starting the journey and not putting it off. The foundations have been laid for the rest of the challenge and hopefully, we can begin to accelerate.