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Easy Investing Strategies That Outshine Robo-Advisors

Financial planner vs financial advisor

In recent years, robo-advisors have surged in popularity, promising simplified investing solutions. However, despite their convenience, they often come with unnecessary fees considering their simplistic services. We believe there’s a better way to invest—one that’s straightforward and data-driven.

Many robo-advisors primarily invest in index-tracking Exchange-Traded Funds (ETFs)—a strategy you can easily replicate yourself. Explore Australia’s ETF providers and construct a customized ETF portfolio tailored to your risk tolerance by seeing what robo-advisors, ETF providers, and other financial companies’ “asset allocation” is for said risk tolerance.

You can even opt for a single ETF comprised of other market-tracking ETFs, simplifying the investment process even further. Several companies have these broad ETFs for each risk tolerance and are much cheaper and very similar in composition to many robo-investing services available.

Furthermore, some robo-advisors don’t invest shares in your name, potentially complicating matters as you may not be the legal owner of “your” investments.

Instead of relying on robo-advisors to overcomplicate investing, consider direct investment in ETFs via an online broker and focus on increasing your investment IQ through our “micro-investing” strategies below:

Automate Your Investments with Direct Debits

Stop relying on round-up features on robo-advice apps; to us, this is spending dollars to invest cents. Direct debit a portion of each pay to your online broker – bonus points if yet set up an auto-invest function for complete hands-off investing.

Automating your investments through direct debits removes the need for constant manual intervention, easing the stress of decision-making and ensuring consistent progress towards your financial goals. By setting up this system, you can trust that your investments are being taken care of without the need for daily monitoring, allowing you to focus on other aspects of your life with peace of mind.

Leverage Dividend Reinvestment Plans (DRIPs) for Compound Growth

There are two ways to make money from shares: You can sell the share at a higher price than you purchased it (this is a capital gain), or you can get quarterly, biannual, or annual payments from the company (a dividend).

With ETFs, this dividend is known as a distribution and is generally paid quarterly. A DRIP will automatically take your distributions and use that money to buy more shares, compounding your growth faster and saving time and brokerage fees.

DRIPs foster a sense of progress and momentum in your investment journey. Seeing your returns reinvested to generate even more returns reinforces the power of compounding, motivating you to stay invested for the long term and reap the benefits of sustained growth.

Boost Superannuation Contributions

Another easy way to invest more (and save on tax) is to increase your contributions to super. Just ask your employer to add a higher percentage of your overall pay to super (some people suggest 15% overall) and watch as you passively save for your retirement.

Increasing your superannuation contributions not only offers direct financial benefits but also instils a sense of proactive planning for your future financial security. By taking control of your retirement savings and optimizing tax efficiency, you cultivate a sense of empowerment and confidence in your ability to shape your financial destiny.

Maximize Returns with High-Interest Savings Accounts

Researching and switching to high-interest savings accounts empowers you to make informed decisions about where to allocate your savings, fostering a sense of control over your financial resources. Knowing that your savings are working harder for you generates a feeling of satisfaction and accomplishment, motivating you to continue seeking out opportunities for financial optimization.

Invest Windfalls Wisely

Lottery winning, inheritance, tax returns, or generous gifts: Any of these large one-off payments is what is called a windfall. Considering that you were getting by before this one-off payment came around, why not put this money towards your future?

Strategically allocating windfalls towards debt repayment, emergency funds, or investments cultivates a sense of financial responsibility and prudence. By consciously directing unexpected funds towards your financial goals, you reinforce positive financial habits and demonstrate your commitment to long-term financial well-being, boosting your confidence in your ability to navigate financial challenges effectively.

Declutter and Sell Unused Items

This isn’t only a microinvesting strategy, but a lifestyle move. If you have items around the house and things you haven’t used for a long time, consider selling them and investing the profit.

Selling unused items not only generates extra cash for investments but also declutters your living space, promoting a sense of order and simplicity in your life. Knowing that you’re putting your resources to productive use by selling unused items reinforces a sense of financial mindfulness and purpose.

In Closing:

These strategies not only simplify the investment process but also empower you to take control of your financial future. Focus on implementing these straightforward techniques to enhance your financial well-being gradually.

If you found these strategies useful but are looking to make big financial changes and decisions, book a financial health check with us today and secure your future with confidence.

Secure your financial future today!