Everyone wants to be wealthy, or at least comfortable. Contrary to popular belief, improving your personal finances is not all about growing your income or learning everything about investing. Those things are only tools; pieces of a puzzle. The cornerstone (or corner puzzle piece if you will) of being financially successful, lies in your behavior.
But it’s one thing to understand that you need to change your behavior, it’s another to actually change it. That’s why this week, we’re sharing two behavior tips to help you become a better investor.
Most people have their paychecks directly deposited into their checking account, but that won’t help you stem your spending. A tip Joe Saul-Sehy of the Stacking Benjamins show shared with us is to directly deposit your paycheck into a separate savings account. By doing this, you are less likely to withdraw your money for discretionary purchases since depleting your savings ‘hurts’ more. Just make sure you aren’t using this hack with a TFSA or a savings account that charges withdrawal fees.
This is one of the best and easiest ways to grow your wealth. Rather than manually transferring money into your savings account, set up an automatic deposit to do it for you at a regular interval – we recommend every payday. Why automatic over manual? For most people, payday or extra money in your account means a trip to the mall or an online retailer. To avoid thinking about saving as a missed opportunity to get something you want, let your savings account take the money before you even see it.
Most financial service providers offer this functionality, including our automated dividend investing platform. Our platform takes it one step further and suggests a contribution amount to reach your goal, check out the public version of that tool here.
To reiterate, whether or not you’re investing on your own, using a robo-advisor, or having your money managed elsewhere, behavior is the overarching key to successful investing. Join us on the Fireside Finance podcast next Friday, where we will discuss a few more ways to better your behavior with Joe Saul-Sehy.
Until next time,
The Emperor Team