REIT Investing Challenge - June 2019 Report

REIT Investing Challenge - June 2019

I have been doing the REIT Investing Challenge since November 10th, 2018.

A little background if you stumbled upon this Challenge Report. I started these challenges in 2018 as a way to show everyday people how investing and saving for your future is as easy as putting a little money aside and growing it using investment securities. As I developed these challenges, I wanted the amount that was saved to be affordable to anybody who was reading these reports. In the REIT Investing Challenge, I commit $100 per month to a Real Estate Investment Trust. The goal is to keep it there for as long as it takes (30 + years long). This isn’t my retirement plan, but in order for readers to actually see it work, I have to make this longer than just 5 or 6 years. So as long as blogs and websites are still a thing 30 years from now, I’ll keep reporting on it month by month.

Results

As of 6/15/2019 dividend date (investments are usually made on the 10th and dividends are paid on the 15th):

Investment Month Number: 8
Amount Invested Each Month: $100.00
Investment: Real Estate Investment Trust
Total Amount Invested: $800.00*
Total Account Value: $866.56
Total Expected Value: $823.73 (See below for discussion)
Total Annual Interest Rate Return: 27.25%*

*Dividend reinvestment are not considered towards the total amount invested. Only actual cash investments are considered. Results are lower if you consider the dividend as a personal investment into this challenge.

Commentary

On an annualized basis I was able to achieve a 27.25% annual interest rate return. That’s amazing. I am not sure what I would attribute it to, but I think there are a lot of uncertainty in the marketplace regarding the economy. Some would argue that REITs are a somewhat safer alternative because these are backed by a physical asset (real estate). Individuals who are taking their money out of the market need a place to park it and often times, savings are not answer for idling cash. REITs provides enough risk, but doesn’t keep your cash idling. (If you’re wondering how I calculated 27.25% see my calculation below as it is based on a time value of money calculation).

I did have a few thoughts that it might be nice to take my money and call it a day with such great returns because the downfall could come sooner than later. However that wouldn’t help this challenge, so I am going to roll with the punches and see what happens.

Some may wonder what investment am I using. The answer is…I won’t say. This site is not a stock picking investing site. I also do not want to influence a particular person’s decision based on a website commentary. As a prudent investor, you need to make those choices for yourself because ultimately, the results of your own investments are going to hurt you and only you. I do not post which investments I use for my challenges, but I can assure you they are all reachable by everyday people. Instead of giving you the stock, I am giving you the investment category. In this case, I am investing $100.00 in a Real Estate Investment Trust.

Calculation

Below is how I calculated the percentage return based on keys in a financial calculator for a time value of money (beginning payment setting):

N = 7
I/Y = Solving (27.25%)
P/Y = 12 Months
PV = $0 Starting (Technically)
PMT = -$100 (Per Month Investment)
FV = $766.56 ($866.56 - $100 just invested which has no time to grow).

Summary

So June was a great month overall. However, being in this for only 8 months doesn’t give you real stability. It’s the long run that will count. Plus, it’s like I bought all of my investments this month on the cheap side. Only time will tell if I make money from this investing strategy.

If you want to read more about this challenge, make sure you check out the REIT Investing Challenge page here.

To see more of our challenges, click on the challenge name below:

Until July, see you later.