We often hear that investing is challenging, as many people find financial jargon and complex charts overwhelming. However, the most critical aspect of any investment strategy – consistently investing each month – can be straightforward and nearly effortless.
The secret to simplifying investments lies in automation. A significant number of individuals struggle with inertia when making investment decisions. While some delay saving and investing for valid reasons, like low income or other obligations, others procrastinate on financial planning. For these people, automating savings ensures a portion of their income is invested regularly. Numerous methods allow automatic saving and investing until individuals are ready to give it their full attention.
One auto-investment option involves discussing salary deductions with your employer. They may agree to withhold a specific amount from your paycheck for additional provident fund contributions or insurance premiums. You can also request your bank to automatically transfer funds from your pay account to various investment vehicles, such as peer-to-peer investments (via SIP) and fixed deposits.
To begin auto-investing, set aside funds within a week after receiving your salary. This approach protects your savings before you spend most of your monthly income. Establish a one-time mandate for each investment, determining the precise sum. Once complete, the process shifts into automatic mode, building an investment portfolio with minimal input.
Auto investment in Nutshell
Automatic investing tools enable you to schedule periodic payments to an investment account, gradually accumulating wealth over time. You decide how much and how often to invest when establishing an automated plan; subsequent installments occur automatically. Should your time horizon, risk tolerance, or goals change, adjusting the plan is simple. Your investments can be funded through various means, such as paychecks or bank accounts.
Why should you start auto investing?
Having an automatic investment plan is an uncomplicated way to stay on track with retirement contributions by putting them on autopilot. Automating investments eliminates the need to remember monthly savings allocation, reducing the risks associated with neglecting your financial future.
- It prevents you from spending investment money.
When you work hard and watch your paycheck arrive in your bank account, it’s tempting to justify a small indulgence. Occasional nights out or weekend breaks are fine if you have the funds. However, they’re not acceptable if the money was meant for your retirement plan. Automation removes temptation. Instead of taking away your power, automating your investments grants you more control over your spending habits, helping you achieve your financial goals faster.
- It saves time and reduces stress.
An automatic investment plan eliminates the need to manually transfer funds, freeing up more time for you. You also won’t be worried about saving enough money each month. With one less thing to stress about, you can focus on enjoying life more.
- It helps you avoid poor investment decisions.
Automatically investing your money for the long term keeps you from falling victim to unwise investment strategies such as day trading (where you’re likely to lose money) and micro investing apps (which distract you from gaining larger profits).
Start auto-investing with Monexo!
Monexo is India’s first peer-to-peer lender that offers automated investment in loans listed on the marketplace. This hands-off approach allows you to find and fund loans without constantly logging into Monexo’s platform. Just set the lending rules, and orders are placed automatically – it’s that simple!
The minimal commitment required from investors makes this strategy well-suited for those currently unwilling to participate more actively in investing. It’s perfect for people who want to build wealth but struggle with inconsistent investment and expenditure patterns or for those just beginning their investment journey.
