Automating Your Investing & Saving
More about strategies & the power of automating your savings/investments
Dear Sunday Investors:
We are back! Welcome to this week’s edition of the Sunday Monday Investor! To our new members, the format of this weekly newsletter will be a deep-dive into one investment-topic. This week, we will be going into the power of budgeting and automating your income, savings, and personal investments. We will start by talking about different platforms to budget & automate your investments, and then we will go into the different investment accounts & potential investments where this strategy makes most sense.
Read, enjoy and share with any friends. Let’s build wealth together.
Weekly Market Recap
One-Third of Americans Making $250,000 Live Paycheck-to-Paycheck - Bloomberg. More than half of top millennial earners in report having little left at the end of the month.
Wall Street Bank Lobby Lines Up Against a US Digital Dollar — Bloomberg - Wall Street lenders are calling on the US government to hold off on launching a digital dollar saying that it would drain hundreds of billions of dollars out of the banking system.
Elon Musk wants to cut 10% of Tesla jobs. CEO Elon Musk has a "super bad feeling" about the economy and needs to cut about 10% of salaried staff at the electric carmaker, he said in emails seen by Reuters.
US Job Growth Tops Expectations in May, With 390K Added - CoinDesk. Along with these numbers, employers also reported 11.4 million vacancies in April, which means that there are nearly two jobs available for every person looking for a job.
Airdrop Szn?
The $OP token airdrop has hit the market this week. $2,000 was airdropped (available to claim for free) to users just for using the blockchain once.
Be sure to take a look at my airdrop guide below for other airdrops to be ready for & how to get paid for experimenting on the blockchain!
Saving (Or Lack of It)
According to a new survey out this week from e-commerce news site PYMNTS.com and the digital bank LendingClub, over 2/3s of Americans are living paycheck to paycheck compared to less than 1/2 who said that this same time last year.
What is also astounding is that a third of those making $250k or more are also living paycheck to paycheck including over 55% of millennial's who make over $250k are living paycheck to paycheck. Why is this happening?
Inflation, supply chain issues, combined with large amounts of debt including student loan debt are all contributing factors to this happening. Nevertheless, there are strategies we can put in place to budget, save, and invest every month without even thinking about it.
Budgeting
Creating a budget might seem daunting at a first glance. When thinking about this, you think looking into past transactions, organizing them in a spreadsheet, and planning out categories by scratch which can seem daunting. There are a few apps that I recommend that change the game here to make budgeting simplistic, easy to manage, and easy to change on the fly all while being able to see where your hard earned money goes every month.
Best Free Tool: Mint
Mint is a free app that takes you off of a spreadsheet and offers basic budgeting features, bill payment reminders, customized alerts when you're over budget, and a credit monitoring service!
Best Paid Tool: TrueBill ($36 annually)
TrueBill does everything Mint does but offers more capabilities such as cancelling subscriptions with a click, creating savings goals and automatically contributing to them, as well as allowing them to negotiate better rates on your phone/internet bills.
Automated Investing
Now that we have our budget down, lets take a look at how investing falls into play here by looking at a few popular investment accounts as well as how to automate your investing in these accounts.
Potential Investment Accounts To Have:
401K:
Max Contribution (2021): $19,500 + $6,500 (catch-up contribution eligible) for individual; $57,000 total between individual + employer annually
Withdrawal Rules (2021): Money withdrawn before age 59.5 has a 10% additional tax
Mandatory Withdrawals (2021): Must begin withdrawing by 72 to avoid penalties
Individual Retirement Account (IRA): (Fidelity, TD Ameritrade, Charles Schwab, E*TRADE, M1 Finance)
Max Contribution (2021): $6,000 + $1,000 (catch-up contribution eligible) for individual
Withdrawal Rules (2021): Money withdrawn before age 59.5 has a 10% additional tax
Mandatory Withdrawals (2021): Must begin withdrawing by 72 to avoid penalties
Roth IRA: (Fidelity, TD Ameritrade, Charles Schwab, E*TRADE, M1 Finance)
Max Contribution (2021): $6,000 + $1,000 (catch-up contribution eligible) for individual
Withdrawal Rules (2021): You can withdraw your Roth IRA contributions at any time, for any reason, with no tax or penalties. Earnings withdrawn before age 59.5 has a 10% additional tax on capital gains.
Mandatory Withdrawals (2021): None (taxes paid at time of contribution)
Brokerage Account: (Fidelity, TD Ameritrade, Charles Schwab, E*TRADE, M1 Finance)
Max Contribution: No limit
Withdrawal Rules: No restrictions unless enforced by broker; must pay taxes on capital gains or taxable distributions
Mandatory Withdrawals: No rules
Automation
How can you make saving & investing easy? Automate it! I believe that automating your investing is one of the most powerful tools you can do… and the earlier you can start the better.
Automating 401k:
Automating your 401K contributions are very simplistic to do directly through your employer. When starting work at a new company, see how much their “401k match” is (typically around 3-7%). Take advantage of that match as you can automatically take out that % or a higher % of your salary to automatically put in your 401k!
Automating Crypto Investing/USDC 9% Interest Savings Account:
Automating crypto investing has become way easier with innovations in exchanges these past 5+ years.
Voyager is an U.S. based cryptocurrency exchange where you can set up recurring investments on a daily, weekly, bi-weekly, or monthly basis. This can also be done on other exchanges like Gemini & Coinbase.
Earn: Stablecoins: 9.00% and Crypto: 0.88%-12.00%
Benefits: You are able to dollar-cost-average on Bitcoin, Ethereum and other cryptocurrencies with no fees.
Investing $10/Week in Bitcoin For The Last 5 Years Example:
Investing $10/Week in Ethereum For The Last 5 Years Example:
Saving USDC on Voyager With 9% Interest For 5 Years Example:
Automating Brokerage Account Investments:
Automate investing money into your taxable brokerage account on TD Ameritrade, M1 Finance, Fidelity or many more options.
Easy Automation Trick: Schedule automatic transfers when you get your typical paycheck (1st and 15th of every month) so you never even notice the money hit your account
Roth IRA/Traditional IRA: $6,000 annual investment is allowed annually for these accounts which = $500/month. Automate what makes most sense for you how this is taken out of your account to get the max contribution!
Automation is powerful; customize it to what makes most sense for you and start seeing your money grow without even thinking about it.
Memes Of The Week
Next Article
Will be keeping my eye out for new content to write about these next few weeks. Be sure to send in any questions directly to me or comment below on this post what you’d like me to write about or answer next!
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