Many financial planners say that “Automation helps save consistently, which is the code to build long-term wealth” as their favorite way to build wealth. They all said the best approach is to automate your savings and retirement contributions.
You don’t have to strike diamonds in a mine or make it big on Wall Street to get wealthy. In fact, there’s an easier way: These 3 things that can make you better financially. “Save early, consistently, and automatically.”
“Through automation, you’ll spend less time thinking about saving. Instead, you can use that free time to make mental capacity to better. whether that’s making yourself more marketable to increase earning potential or figuring out your passion and purpose, making a career out of it,” said Andrew Westlin, a financial planner
“I don’t try to time the market, I don’t follow the latest hot stock or fad, just save and invest systematically every month or out of every paycheck consistently,” said Luis Rosa, founder of financial-planning firm Build a Better Financial Future.
Start with your employer-sponsored retirement account
Anyone can automate their savings, all it takes is five minutes at the computer. Start with the lowest amount and increase it according to your expenses.
Anjali Jariwala, a financial planner at a financial-planning firm advice business owners, saying “maximize your retirement by retirement saving plans (401(k)s, 403(b)s, HSAs, Roth IRAs)”. The contributions to a 401(k) or IRA are pretax is a great option. Because the money will be taken out of your paycheck before it even hits your bank account.
Deposit part of your paycheck into a savings account automatically
Login to your payroll provider and use a portion of the paycheck into an account that isn’t used for everyday expenses. You can choose a separate bank for your savings. So the money doesn’t tempt you to spend it every time you check your bank account.
Most financial experts say you should aim to save at least 10% of your income. Half in a tax-advantaged retirement account and a half in liquid savings. But start where you’re comfortable. Even 2% or 5% works, as long as you’re consistent.
Author Chris Hogan studied more than 10,000 millionaires and found the qualities that make them successful hinge on a distinct behavior: Consistency. “They know from experience that wealth-building is a long-term frame. They’ve seen that sticking to the plan over decades leads to millions at retirement,”. Hogan wrote in his book “Everyday Millionaires.”