Automation For The Win

Investing consistently is one of the most effective ways to build wealth over time. But life gets busy, and it’s easy to let weeks—or even months—slip by without contributing to your portfolio. That’s where automation comes in. By creating a system that runs in the background, you can ensure your investments grow steadily without the need for constant oversight or decision-making.

Here’s how to build an automated system that aligns with your paycheck schedule, budget, and investment goals to take your wealth-building game to the next level.

Step 1: Set Your Paycheck as the Starting Point

The foundation of your system begins with your paycheck. Since most people are paid biweekly, align your investment schedule with your payday to ensure consistency.

Why This Works:

• Removes Guesswork: Automating withdrawals right after payday ensures you’re investing regularly without having to think about it.

• Budget-Friendly: By automating based on your budget, you avoid overcommitting and risking overdrafts.

📖 Example: Let’s say you get paid every other Friday. On Saturday, your system automatically transfers a portion of your paycheck to your brokerage account.

🔑 Takeaway: Treat your investments like a bill that gets paid first—your future self will thank you.

Step 2: Automate Transfers to Your Brokerage Account

Once your paycheck hits, set up an automatic transfer from your checking account to your brokerage account. The amount you transfer should be based on your budget and financial goals.

How to Decide the Amount:

• Start Small: If you’re new to investing, start with a modest percentage of your income (e.g., 10%).

• Increase Over Time: As your income grows, gradually increase your automated contributions.

📖 Example: If you make $2,000 per paycheck, you could set up an automated transfer of $200 to your brokerage account the day after payday.

🔑 Takeaway: Automating transfers ensures your money gets invested instead of being spent impulsively.

Step 3: Auto-Invest in Your Portfolio

Once the funds are in your brokerage account, the next step is to automate the purchase of investments. Most brokerages allow you to set up recurring investments in specific stocks, ETFs, or mutual funds.

What to Invest In:

• Index Funds or ETFs: Provide diversification and steady growth. Consider funds that track the S&P 500 or total market indexes.

• Dividend Stocks: Focus on reliable companies that pay consistent dividends, such as those in the Dividend Aristocrats Index.

📖 Example: If $200 transfers into your account biweekly, you could set up:

• $150 to auto-invest in an S&P 500 index fund.

• $50 to buy shares of a trusted dividend stock like Johnson & Johnson.

🔑 Takeaway: Automating investments eliminates the temptation to time the market and keeps you on track for consistent growth.

Step 4: Keep Some Cash on the Side

Not every dollar needs to be invested immediately. It’s wise to keep a portion of your contributions in cash within your brokerage account, especially if you’re monitoring market conditions.

Why Hold Cash?

• Market Opportunities: Cash on hand allows you to take advantage of market dips or crashes by buying quality stocks at discounted prices.

• Flexibility: Gives you the option to pivot your strategy or cover unexpected expenses.

📖 Example: If you’re contributing $200 biweekly, you might allocate $150 to investments and leave $50 as cash for future opportunities.

🔑 Takeaway: Balancing automation with a bit of cash flexibility helps you stay prepared for market fluctuations.

Building the System: A Timeline Example

Let’s map out a biweekly payday system for automation:

Friday: Payday Hits

• Your paycheck is deposited into your checking account.

Saturday: Automated Transfer

• $200 is automatically transferred to your brokerage account.

Sunday: Automated Investments

• $150 is used to buy shares of your chosen index fund or dividend stocks.

• $50 remains in cash within your brokerage account for future opportunities.

The Long Game

• Over the course of a year, this system ensures consistent contributions, steady growth, and flexibility for market opportunities.

Benefits of Using Automation

1. Consistency Without Effort

Automation removes the need for decision-making, ensuring you stay disciplined and consistent with your investments.

2. Dollar-Cost Averaging

By investing a set amount regularly, you reduce the impact of market volatility and avoid the risks of trying to time the market.

📖 Example: Whether the market is up or down, your automated investments continue, averaging out the cost of your shares over time.

3. Builds Good Financial Habits

Automation forces you to prioritize investing and removes the temptation to spend instead of save.

Conclusion: Let Automation Build Your Wealth

Building an automated system for investing is one of the smartest moves you can make for your financial future. By aligning your investments with your paycheck schedule, automating transfers, and setting up recurring investments, you remove the guesswork and emotional decision-making that often derail financial goals.

Start today: Set up your system to automatically withdraw from your account after each payday, allocate a portion to stocks or ETFs, and keep a little cash for market opportunities. Over time, you’ll build a portfolio that grows steadily—without lifting a finger.