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How to set up automatic investing

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  • Automating your investments ensures consistent contributions and reduces the temptation to spend.
  • Robo-advisors, employer-sponsored retirement accounts, and dividend reinvestment plans are popular automated investment options.
  • Automated investing platforms like Wealthfront, Betterment, and M1 Finance offer various features to suit different investor needs.

Automating your investing is a powerful strategy to ensure consistent contributions towards your financial goals without the need for constant oversight. By setting up automatic transfers and investments, you can simplify your wealth-building journey and take advantage of the benefits of regular, disciplined investing. This comprehensive guide will walk you through the steps to automate your investing, from setting up accounts to choosing the best platforms and investment types.

Automating your investments can help you stay on track with your financial goals, reduce the temptation to spend, and avoid the pitfalls of market timing. As Brianna Middlewood, director of behavioral economics research at Fidelity, notes, "People tend to stay the course that they’re on. This means that if you can make the decision to start, it’s easier to continue. But making decisions can be hard too; automation means you only have to make the decision once" .

Setting Up Your Automated Investing Account

1. Create an Investment Account

To begin, you'll need to create an investment account. This involves choosing a user ID and password, selecting the type of account (taxable, IRA, or retirement), and providing necessary information. Advanced traders may require approval for certain brokerage accounts.

2. Choose Your Assets

With robo-advisors and micro-investing apps, you'll answer questions about your goals, risk tolerance, and time horizon, and the platform will select the assets for you. For workplace retirement accounts, you'll choose investments from a provided list. Self-directed investment accounts offer thousands of stocks, bonds, ETFs, and mutual funds.

3. Link Your Funding Account

Next, you'll link your checking or savings account for the fund transfer. For a 401(k), 403(b), or 457 account, this step is unnecessary, as money is automatically transferred from your paycheck into the retirement account.

4. Set Your Funding Schedule

For robo-advisors, round-up apps, and self-directed accounts, you'll select how frequently and how much money you wish to transfer from your bank account into the automated investment account. Make sure to set up a large enough transfer to receive the employer match for workplace retirement accounts and understand the maximum contribution limit into your 401(k).

Top Automated Investment Platforms


Wealthfront is known for its low fees and comprehensive financial planning tools. It offers tax-loss harvesting and a variety of account types, making it suitable for both beginners and advanced investors.


Betterment provides a user-friendly interface and personalized financial advice. It offers features like tax-efficient investing and goal-based planning, making it a great choice for those looking to automate their investments with minimal effort.

M1 Finance

M1 Finance combines the best of robo-advisors and self-directed investing. It allows you to create custom portfolios and offers automatic rebalancing, making it ideal for investors who want more control over their investments.

E*TRADE Core Portfolios

E*TRADE Core Portfolios offers a straightforward approach to automated investing with low fees and a variety of investment options. It is suitable for investors looking for a simple, hands-off investment solution.

Merrill Guided Investing

Merrill Guided Investing provides access to professional financial advisors and a range of investment options. It is a good choice for those who want a blend of automated investing and personalized advice.

Understanding the Top Automated Investment Types


Robo-advisors provide a low-fee option for smart investing. You inform the robo-advisor of your goals and timeline, and the digital investment manager will create an investment portfolio that meets your needs. Set up an auto transfer into the account, and the robo-advisor keeps your investments allocated according to your preferences.

Employer-Sponsored Retirement Accounts

Most employers provide a way for you to save for retirement through a 401(k), 403(b), or 457 account. You choose a percentage of your paycheck to transfer into the account, and the money is invested in stock, bond, or balanced funds that you select.

Dividend Reinvestment Plans (DRIP)

A DRIP is an option within your investment account to have all of your dividends and capital gains payments automatically reinvested in the same asset. By reinvesting your investment income into additional shares, your account value will compound more quickly.

Recurring Transfer

You can direct your bank to have a specific amount of money regularly transferred from checking or savings into your investment account. The funds can be transferred into taxable investment, retirement, and any financial account on a daily, weekly, monthly, or other recurring schedule.

Rounding Up

Round-up micro saving and investing apps allow you to link a debit and/or credit card to the app. After linking, select a round-up amount from the next dollar, up to 10 times the original amount. Whenever you spend with that card, the round-up amount will automatically be transferred into your investment account.

Benefits of Automated Investing

Automating your investments not only frees up your time but also helps ensure you consistently invest over time. No additional work ethic or discipline is required. Here are some key benefits:

Reduces Temptation to Spend: Since the money is automatically allocated to your portfolio, you eliminate the risk of spending it on something else.

Avoids Overreactions to Market Fluctuations: With automated investing, you’re less likely to day trade and make other impulsive decisions during market volatility.

Frees Up Your Time: Instead of constantly eyeing the markets, you can automate your investments and use the spare time for things you enjoy.

Automated investing is an effective strategy for simplifying your wealth-building journey and ensuring consistent contributions towards your financial goals. By understanding the different types of automated investment platforms and account minimums, fees, and services offered, you can make an informed decision and start building your wealth today.

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