Let the Robots Do the Work
The best way to make sure you stick to a plan is to remove as much friction as possible.
And with the help our our computers, we can almost eliminate any such friction.
Once you are somewhat comfortable with your savings rate and investing your money, it is time to automate things so they don’t take up time and energy.
This is an important step. We want to make it easy to stay on the correct path! If you can make it so that “doing nothing” is the correct behavior you are much more likely to follow through.
The exact automation steps depend on your bank and investment platform. But overall the steps should be quite simple.
A) Set up recurring money transfer from your bank account to your investment platform.
The transfer should happen soon after you receive your paycheck - e.g., I get paid once a month so the money is in my account by the 1st. I then pay rent and other recurring expenses around the 1st. My automated transfer can therefore be something like the 3rd. This way I make sure I always pay important expenses but I also don’t have the money laying around in my account so I’m tempted to spend them.
B) Set up recurring investing on your investment platform.
Set up a monthly recurring investment on your investment platform. If your platform does not support this, create a monthly calendar task in your calendar to remind yourself to invest.
And that’s it. You now have your “automated money making system” I promised in the introduction! Sit back, relax, and let your net worth grow.