APRIL FOOL

It’s a Year Since We Began Our Money Challenge, This Is What We Did With Our £1,000

And what we learned in the process

It’s a year since I gave my kids a wad of cash and set them a challenge.

They each got £1,000 and had to make as much money by using it to invest, buy and sell, or any other legal method.

It’s been a fun experiment, but there is a serious side.

The plan was for us all to gain new investing skills, develop an entrepreneurial mindset, and earn some extra money. Building a nest egg would help them cope with unforeseen eventualities.

There is a big dollop of self-reliance that comes with fending for yourself.

The results are in

I set the challenge on 1st April 2021 — and called it The April Fool Challenge. I had two reasons for calling it that.

First, is their happiness.

Second, I told them they could keep all the money they earned but would have to hand back their initial £1,000 stake. If they lost money, they wouldn’t be liable for any losses.

Well, April Fool guys. You can keep all the money, even your stake.

Let’s see how it paid off for each of us.

Myself

I figured I’d do okay. I’m a sensible guy. I wouldn’t blow my £1k on fanciful investments — turned out I don’t know myself as well as I thought.

I put my £1k in a gold mine — literally. I bought shares in a gold mining company.

I did due diligence. I looked at the fundamentals. The gold miner was producing gold at a profit, it was paying a handsome dividend (8%) and its share price was half what it had been six months previous.

It was an inspired decision based on sound information — except it wasn’t.

There is more to share price movements than reasoned argument. It stagnated. It went up a little, down a little. It didn’t have the explosive growth I predicted.

So I sold up and gambled on two cryptocurrencies. I spent £500 on Bitcoin and £500 on Litecoin. Both bounced around like boobs on a bouncy castle. Painful for the owner — but hard to take your eyes off.

Within three weeks, I was up £500.

Within three months, I was down £500.

It was a useful exercise. I learned from having skin in the game. I researched cryptocurrencies. My due diligence has given me a greater understanding of blockchain and its one big flaw.

Today, my £1,000 stake is worth £885.

№1 son

He bought built a workshop in his garage. He bought tools and wood and made a workbench from scratch. He’s used that to refurbish furniture.

He made a beautiful lounge table, which he gave to his girlfriend’s mother as a gift.

He loves his projects. This is him in action. He is not bothered about winning the challenge; he is having a ball learning new skills that will stand him in good stead for the future.

Final total: £40 + a damn good workshop.

№2 son

He planned to rent out a large movie screen and projector to families for the weekend. A home cinema experience that would have been a welcome distraction from our isolated world.

He also looked at dozens of other businesses he could start. He spent some money testing ideas on carrd.co, a platform for building simple one-page sites. But didn’t get started on anything.

Paralysis by analysis.

Final Total: £964.56

№3 son

He spent the summer buying and selling golf equipment. He bought full sets of clubs and split them up to sell on. He also bought and sold cameras for a profit.

His buying and selling turned his £1,000 into £2,500 by the summer, which he then invested in shares and cryptocurrencies. He made a further £500 from his investments and got up to £3k.

However, he incurred some losses.

The money he invested in Vanguard’s 80% lifestyle strategy did well.

• Games Workshop lost him £6.
• Cineworld lost him £20.
• Boohoo lost him £400.

He’s the runaway winner in terms of profit. His last count is £2206 (still sitting in investments) and a £200 camera he plans on selling.

Final total: £2406.

The most important lessons learned

All of us enjoyed the challenge. It made us think, and we learned a little about investing and making money. We also learned a little about ourselves.

I have friends (and even some Medium members) who have taken an interest in the challenge and plan on doing the same thing with their kids. I reckon the younger they are, the better.

If you are considering doing something like it, this is the advice we would give:

• In business, get started. Just get started.
• Reading and researching are important before investing — or you can leave that to others who know what they are doing.
• You don’t have to be the smartest person in the room to make money.
• The more mistakes you make, the more you learn — but make sure you learn from them.
• Making money isn’t life or death important.
• Life and work interfere with money goals — schedule time to do it.
• Happiness is a verb. Do it.
• Having money doesn’t make you happy, it just makes experiences easier.

Ask any old person what they regret in life and they will tell you their most enduring regrets are for the things they didn’t do.

Whether or not you make more money, be a lifelong learner. Make time to walk with those you love and stop to smell the roses. Experience life. Don’t be a doodling doomsayer, worrying workaholic or a worn-out wall-flower.

The challenge has been a novel experience for my kids and me. We have had a good bit of banter and it has been fun.

And tomorrow, I will start another challenge.

Make it your purpose to read more here and/or sign up to get an email when Malky publishes.