My Investment Thesis

While I’ve been a little loose with my purse strings this past week, I want to focus on the strategy element of investing in this post. I don’t quite know how to account the large investment I made this weekend after my first post-loan paycheck.

Rising Tides

After spending the last few months pushing down my student loan, I’ve expanded my disposable income. I didn’t realize how much it would be until I had the cash sitting in my bank account on payday. The fact that my problem is having “too much” in this challenging time is certainly a blessing.

A majority of my spending this past week was in the form of gifted subscriptions on the streaming platform Twitch. Subscriptions are paid support to a streamer, and on a couple occasions, I was inspired to pay for other viewers’ subscriptions. For better or worse, I accompanied this spending with a saving strategy of skipping groceries this week, so the scale is slightly balanced. Fear not though, I certainly have enough food to make it another week.

While my spending slightly increased, my saving was an exponential rise. Because of my frugal lifestyle, I was able to make a significant deposit to Robinhood, my broker for buying stocks. In terms of this trial, my deposit put me significantly ahead of any spending to this point. I am curious to see how it impacts my spending for the rest of the month.

Will my matching buffer encourage me to spend more, or will the habit of saving settle in? Only time will tell. What I think was far more important this week, was the strategic work I finished, my investment thesis.

The Thesis

An investment thesis is an argument for why an investment is a good option. While financial analysts and investing firms need a rock solid thesis, making one for personal use allows a lot of room for personal preferences.

My thesis was inspired by this post by entrepreneur, marketing expert, and taco-obsessive, Noah Kagan, in which he walked through step by step of his thesis. If there is any interest of hearing the details of mine, drop a comment below.

Here are some of the high level points. I’ve separated my current investments into three categories, self-managed, automated, and unique. My self-managed portfolio is handled via Robinhood, where I plan to have 40% of my total equity in the Vanguard Total Stock Index fund. An additional 35% of my total equity is spread out evenly across 10-15 companies. The criteria for those companies are ones which are both successful and that I use. From an automated standpoint, I started most of my portfolio with Wealthfront, and I really enjoy their service. I plan to keep 20% of my equity in my account. The final category and final 5% currently belongs to Lending Club, a service I started investing with a few years ago. The idea is crowd funded loans. I like the service offered, and the returns are decent, so I plan to keep my account going.

Ultimately, what I think is important is to have a thesis, any idea of where you are putting your money and why you believe that is the right decision for you. Considerations can be risk tolerance, return expectations, income, opportunities, and more. No two people’s circumstances are the same, and thus it’s not likely every investment option is right for two people. Hopefully this helps you come up with a plan for your own portfolio.