Automatic Investment for Automatic Millionaire “wanna be”?

Posted by Grace under Investing on October 19, 2014

Looking for automatic investment? Dreaming to become an automatic millionaire? Are you busy and have no time in watching or monitoring your investments? Planning to invest automatically with less hassle on your part? I am not saying this auto-invest example is for those who are lazy, actually this are for hardworking people, because they work too much, they have no time to invest by themselves. I am not also saying that this auto-investment is not requiring work on your part, it requires, but just a little task on your part.

Awhile ago, I wrote an article entitle “types of investments”. There are different types of investments but I didn’t find most of these investments offer auto investment system. Today there are only 3 easy investment plan for you to learn.

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 Automatic Investment Advantages and Benefits

You must know what are the benefits and the advantages in investing automatically;

  • Less-Hassle on Your Part
  • Help You Focus on Your Day-to-Day Job
  • Retirement Planning Made Easy
  • No-Headaches, Heartaches, Stomachaches During Market Crashes

Less – Hassle on Investor’s Part

Less hassle because it only require some task, once these task are completed, it can be so easy to invest automatically. Once you opened an investment account, all things are easy. You can only spend for almost half an hour in opening an investment account especially in UITF but in opening a stock broker account, it might take 24-48 hours.

Focus on Your Business or Job

It helps you focus in your day to day job. Investing automatically means you don’t have to spend a lot of time watching your funds. Maybe once a month or once a year, therefore, you can focus your energy and time to your business and job. The good thing is you have a lot of time to make money and make additional investment funds as much as you can. Leave to the trader the day-to-day tracking and analyzing the market place. You are an investor not a trader.

Make Your Retirement Pension Automatic

You will be amaze how far can your money take you after a period of time, let’s say you are investing a small amount of money in 20 years. Your discipline and patience will give you financial rewards. If you are planning to retire rich, this is good for you. The best thing is, you can’t easily touch your investment funds once they are invested, these investments are really good for retirement.

No Headaches, Heartaches, Stomachaches

Automatic investing requires only a small amount of investment capital. Assuming there is a market crash today and you only have $2,000 investments. Would you think it deeply? I think no, compare to the big time investors investing millions of dollars. So, just relax, keep on investing. The good thing about this is, when there is a market crash, aside from being calm and easy, you can buy a more stocks shares in stock market or mutual funds or UITFs.

Now, you know the benefits, actually there are lot of benefits and advantages. Let us now know the disadvantages of automatic investing.

Automatic Investment Disadvantages

Investing is risky, especially if you are not confident and sure on what you are doing. Investing is risky especially if you only want to know the advantages, find also the disadvantages, and here they are;

  • Growth of Funds / Slowly Getting Rich
  • Return on Investments Issue
  • You Can’t Compare Yourself to the Rich Investors

Getting Rich Slowly

What if you invest automatically for 20 years or more? Yes, you can make millions but did you ask yourself, how could I enjoy my money if I have few years to spend in this planet earth? I have remembered the quote from famous rich people stated “get rich or die trying”, “get rich slowly but surely, get rich while you are still young, the better”. Why you are investing your money in the first place? Of course, you want to get rich, if you don’t want to get rich but you are investing, I think you are fooling around. Why I invest? I want to become a multi-millionaire and want my kids to become a billionaire. What about you? Why do you invest?

Solution: Increase your investment funds. Example, if you plan to invest P2,500 per month, try to make it P5,000 per month.

Return on Investments is Also an Issue

Since you are only investing a small amount per month. Of course, the return is not that high compare to “lump sum” (one time investment). In investing, I know you are familiar with the risk involve, the higher the risk, the higher the returns. You are taking risk with your money and (time) years invested.

Solution: Invest automatically with investment vehicles that can give you high interest earnings such as stocks or equity and balanced funds (for UITF and mutual funds)

Rich Investors Getting Rich

Can you compare yourself with the rich? Compare the profits made by the rich investors investing millions and your profits investing thousands. What do you think?

Example: If you invest P2,500 per month in 20 years earning 15% per year, you will get a total return investment amounting to P3,073, 307.48

If you invest P600,000 one time investment (lump sum) and earning 15% per year in 20 years period, you will get a total return amounting to P9,819,922.44

(Note: The example above (cost averaging and lumpsum) has equal investment capital amounting to P600,000. Simply calculate P2,500 x 12 months x 20 years = P600,000)

Conclusion: Automatic investing is for everyone who are willing to take risk with a small amount of money. Think about this, if you have P600,000, would you go for easy investment plan? Or Invest it lump sum?

Example of Automatic Investment

Are you following on what I mean about auto investing? If yes, continue reading the examples of automatic investments, thank you for reading. Let’s continue….

Easy Investment Plan in the Stock Market

Do you know that you can invest in the stock market automatically? Let me write the details after I give you an idea about what stock is all about. You can make money in the stock market through capital gains and dividends. You will gain when the stock you bought increase its value – capital gains. Dividends are distribution of profits to be given by the companies to its stockholders.

How to make stock investing automatic? If you are familiar with COL Financial, it is easy for you to understand this. Just go to www.colfinancial.com, log on to your account. Go to EIP schedule and filled out the details.

Example: If you want to buy stocks worth P5,000 per month, just write the total shares and total amount plus your chosen company stocks.

Fund your account amounting to P60,000 and let the system invest your money amounting to P5,000 per month within a year. If you want three years, then fund your account a P180,000.

Investing Guide: 5 Steps to Open a COL Financial Account

Trust Account in the Banks Made Automatic

There is also a UITF (Unit Investment Trust Fund), you can make it automatic. How? Simple, open a savings account at BDO, apply for an EIP easy investment plan and decide how much you want to invest per month.

Example: If you want to make it automatic, just deposit money to your savings account worth P30,000 and apply at BDO UITF Easy Investment Plan amounting to P2,500 per month. It means in a year you only transact once, and the BDO UITF will make a auto deduction from your savings account to invest in your chosen UITF types.

UITF Type: BDO Equity Fund – for investors with aggressive risk appetite
Objectives: Aims for capital growth over the medium to long-term by investing in a selection of exchange-listed equities. Recommended to Stay Invested: More than three (3) years.

UITF Type: BDO Peso Balanced Fund – for investors with balanced risk appetite
Objective: Aims to achieve capital appreciation over the medium-term by investing primarily in equities (stocks) and fixed income securities. Recommended to stay invested: more than three (3) years.

Investing Guide: How to Invest in BDO UITF Easy Investment Plan?

Automatic Investment for Private Companies Employees

If your employer is using a BDO in payroll system, and if you have BDO ATM card or cash card, you can ask the bank branch wherein the company opened your BDO account to invest some portion of your salary in their Easy Investment Plan. This is really good especially for those who are “permanent” employees. Just ask question in the bank, it is FREE to ask. DO not be shy to ask, or else you miss the great investment opportunity to make your money grow.

Tips: Tell the bank to make an auto deduction for your UITF investment, for as low as P1,000 you can participate in their program.

GSIS or PERA (401k Plan in USA) Retirement Plans are Also Automatic

This is a great thing for government employees. Awhile ago my husband talk about GSIS contribution. He is a government employee, he wants to cancel the GSIS contribution, but someone told him that the government requires its employees to contribute in GSIS. In USA, there is also a retirement plan called 401(k). Is it a good idea to invest in such investment instruments?

Read the Guide and Conclusion : 401(k) Plan in USA Investment
(What Robert Kiyosaki points of view about 401(k) / GSIS in the Philippines?)

As a Summary:
The advantages of automatic investments are less hassle on your part once you have applied in the easy investment program, you can focus your attention to your day to day job or business, setting aside for your retirement is easy and you will never encounter some panics when the market crashed.

The disadvantages of investing automatically are growth of funds seems slow, there is an issue on return on investment, return on lump sum investing is high compare to cost averaging.

You can make an auto investing in the stock market using COL Financial services easy investment program. Invest in BDO UITF in their EIP for as low as P1,000. Do not cancel your GSIS contribution or 401(k) because these serve as your retirement funds.

What do you think about automatic investment in the stocks and UITF? Do you agree on what is written in this article? Share your opinion in the comment box. Thank you.

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