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Automate your investments from "summary" of The Only Investment Guide You'll Ever Need, Revised Edition by Andrew Tobias
One way to make investing a habit is to automate it. By setting up an automatic transfer from your checking account to your investment account each month, you ensure that you are consistently putting money into your investments without having to remember to do so manually. This takes the guesswork out of the equation and makes investing as easy as paying your bills. Automating your investments also helps you take advantage of dollar-cost averaging. This strategy involves investing a fixed amount of money at regular intervals, regardless of market conditions. When you automate your investments, you are essentially dollar-cost averaging without having to think about it. This can help smooth out the highs and lows of the market and potentially lower your overall cost per share. Another benefit of automating your investments is that it forces you to live within your means. By setting up a recurring transfer to your investment account, you are effectively paying yourself first before you have a chance to spend the money elsewhere. This can help you prioritize your long-term financial goals over short-term spending impulses. In addition, automating your investments can help you avoid emotional decision-making. When you manually make investment decisions, you may be swayed by market fluctuations or headlines in the news. By automating your investments, you remove the emotional element from the equation and stick to your long-term investment plan.- Automating your investments can help you make investing a consistent and effortless part of your financial routine. By setting up automatic transfers, you can take advantage of dollar-cost averaging, live within your means, and avoid emotional decision-making. This simple strategy can help you build wealth over time without having to constantly monitor the market or second-guess your investment decisions.
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