In this post I'll be sharing another tip that caters more for investors. The premise is that as long-term investors, we try to invest as less time and attention as possible in building our investment portfolio. This, of course, doesn't mean that we don’t monitor how well our investment is doing. (The third tip - easy monitoring of your stock transactions - actually talks about it.) But if we could find ways to make our assets work hard for us without doing any additional work, we better grab it.
The key is the reason why we want to be investors – we want to make our money work hard for us, that is, to generate more assets that will in turn produce even more assets. We want to be masters of the power of compounding and layering of work, or doing multiple things at the same time. But that's not enough. We want to achieve that same thing without having a drastic change (or none at all) in our current lifestyle. Unless you’re really for it, we don’t want to make our profits by fixing our eyes on that computer screen for six straight hours every trading day. While that can be done at times, it will without doubt become impractical in the long run especially if you're not doing this full-time.
So if you notice yourself spending too much of your time monitoring your portfolio in a single day, you might want to take a step backward and see if you’re devoting more time than what’s really needed which could otherwise be spent more productively to address more important areas of your financial life.
So how can you make investing automatic?
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| Photo credit: Simplify by automatic investing |
First, make the funding automatic.
This is pretty obvious.
If you have a bank account in BDO, Metrobank or BPI (or any bank that has online facility), make sure you create an online account. This way you can make your financial transactions all online, like paying your bills and funding your investment fund. This is much better and efficient than going to and lining up in a branch and depositing manually.
To eliminate one step further, you can schedule a fund transfer of fixed amount to your investment fund from say your payroll account to make it automatic every after payday. Once it is set-up, paying yourself becomes automatic.
If you have a bank account in BDO, Metrobank or BPI (or any bank that has online facility), make sure you create an online account. This way you can make your financial transactions all online, like paying your bills and funding your investment fund. This is much better and efficient than going to and lining up in a branch and depositing manually.
To eliminate one step further, you can schedule a fund transfer of fixed amount to your investment fund from say your payroll account to make it automatic every after payday. Once it is set-up, paying yourself becomes automatic.
Second, make the buying of stocks automatic.
If your strategy consists of regularly buying every month with a limit stocks price in your mind, then you can use your online brokers' order options. One example will be that of COL's GTC options. GTC (or Good-till-cancelled) is basically a limit order you can place in the market that is going to be valid for sixty (60) calendar days.
How does GTC work?
Let's say you want to buy a stock but you want it at a price lower than the current market price, you can use this GTC option to place an order that will wait for that stock to go down to your desired price (your buy below price for example) resulting to a matched order for you. This is much better than placing the same order every single day.
(You can get more details about COL's GTC option here)
Let's say you want to buy a stock but you want it at a price lower than the current market price, you can use this GTC option to place an order that will wait for that stock to go down to your desired price (your buy below price for example) resulting to a matched order for you. This is much better than placing the same order every single day.
(You can get more details about COL's GTC option here)
Using this GTC option, five minutes is the only time you'd need to devote every month for your stocks investments. That includes logging in to your account and setting up this GTC order. After this, you can go back to your normal life.
Take note that this task assumes you have a desired price and stock in mind - which leads to a third task that can be also made automatic.
Make choosing your stocks automatic
You can also make picking of your stocks and setting your limit prices automatic, and that is by having a mentor do it for you. While you can definitely do all the analysis by yourself, leveraging on someone better than you doing it is not a bad idea either.
Truly Rich Club for example is one way of making this step automatic.
This club, through its Stock Updates and Stock Alert, advises its members whether it’s buying/selling time for some of the club’s stock picks, and that’s the only time I log-in to my trading account and put that buy/sell order. Its team also does the analysis and gives an already screened list of stocks and limit prices for buy below price and target price.
With this set-up, I just keep buying the selected stocks while it’s still at the buy below price and sells once they reach their target prices (or near them). All these reports and updates are sent to my email which makes me updated at all times. If there's any change or sudden news, the club will also take care of that.
By the way, Truly Rich Club primarily uses Fundamental Analysis with some sort of timing. If you're the lazy member, you can go straight to the SAM table that summarizes the stock picks and do your monthly routine. Below is a sample of that easy-to-follow table.
If you're the more curious type, you can digest the explanation of the picks at the second part of the report. For example, in the last Stock Update sent, Mike Vinas talks about some of its Stock Picks' performance. So whatever investor you'd want to be, the club is surely a big help.
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| Truly Rich Club's SAM (Strategic Averaging Method) Table |
If you're the more curious type, you can digest the explanation of the picks at the second part of the report. For example, in the last Stock Update sent, Mike Vinas talks about some of its Stock Picks' performance. So whatever investor you'd want to be, the club is surely a big help.
Focus on your cashflow
As a last advice, do not to focus too much on your stocks but keep an eye more on your cash flow. Find ways on how you can earn more and multiply your streams of income and put a portion of that increase back into your investments. This will maximize the power of compounding in your wealth building.
Start by thinking what you have now that you can offer to the world. Think of your talents and gifts. They can be your natural and automatic way of becoming wealthy!
Start by thinking what you have now that you can offer to the world. Think of your talents and gifts. They can be your natural and automatic way of becoming wealthy!
Have fun investing (with less to-dos),
Omeng
PS: For beginners, download you perfect starter -My Maid Invests in the Stock Market , and start your journey to your millions.
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