You work through lunch so you can leave work on time. You’ve figured out the exact minute to leave for your job down to get there on time. Your favorite quote in the yearbook was, “Work smarter, not harder.” We can appreciate all of this, and that’s why we want to help you when it comes to investing. You are a fix-it-and-forget-it type, as you’ve got better things to do, but that doesn’t mean your money has to go under your mattress either. We’ve rounded up five ways to invest with minimal effort and shared them with you below.
- Invest in Your Employer’s Retirement Program
If your employer offers a 401(k) program and you’re not investing in it, what are you waiting for? This should be a mandatory requirement in any investment toolkit. It’s easy and once it’s done, it’s done…unless you make adjustments. You’ll be using your pre-tax compensation towards your retirement, maximizing your contributions. The payments come out automatically so you won’t even notice its effect on your bottom line. And even those on the tightest of budgets can create a significant savings with even just one percent of your salary being invested into your employer plan. Plus, the tax deduction will make the contribution even smaller.
As your budget grows, you can increase your contributions, and we highly recommend doing so, particularly if your company matches these contributions. If you don’t know the first thing about investing, you can use an investment analysis tool like Blooom for only about $10 a month. Dollardaddy.org also has some tips and tools to help.
- Start Small With a Savings Account
In order to invest, you have to have money to do so. Opening a savings account is often the first step for those who have not yet invested, as many people don’t even have accounts outside their checking account. If you do automatic deposit at your company, design it so a certain amount is taken out of your paycheck and put directly into your savings account. Do not be tempted to do this yourself, as even the most disciplined of people will often forego moving the money from checking to savings. You can even get started with the coffee can approach. Put any spare dollars and cents you have each week into a coffee can and you won’t believe how quickly you’ll have $1,000 to put into your savings account.
- Pay Down Your Debt
“But that’s not an investment,” you say. We beg to differ. When you consider how much you are likely shelling out by paying only the interest on your credit cards each month, this is a huge investment. Think of it as investing in yourself, as you are essentially going into the negatives each month that you do this. As this Forbes article explains it:
“Having debt is like the opposite of having an investment. The only difference is that holding onto debt is often more costly than investments are profitable.
For example, you might expect to achieve a 7% or 8% return in the stock market. With credit cards, you might pay in the double digits. Yikes.”
It’s not difficult to start tackling credit card debt. It just takes discipline. If you’ve been paying a little on each credit card each month, try a different approach. Put the most money towards the credit card with the highest APR and get that one down to zero first. If your credit is still good, you can accomplish this by combining them all on a 0% balance transfer credit card. This will significantly help as long as you pay it off within the time period of the 0% interest. You can finally bid adieu to all those calls from debt collectors.
- Invest Using a Robo-advisor
When you’re talking minimal effort, it’s hard to get any easier than using a robot. This automated intelligence system will track your investments based on certain criteria, and no prior investment experience is needed to get set up. You have to fill out a fairly simply questionnaire about your tolerance for risk and investment goals. Their fees are generally reasonable, and you can take the time to shop around to find the one that suits you. They are also great for those who don’t have a lot to invest due to a strict monthly budget, as they typically have low or no account minimums.
- Consider Peer-to-Peer Lending
Peer-to-peer lending is a somewhat new practice of lending to borrowers through an online service designed to bring borrows and lenders together. This is another low-effort investment, as you can invest automatically once you’ve submitted your investment criteria. If you prefer to be more hands on, you can do it manually by choosing the loans that appeal to you. Either way, you should always be aware that some notes are riskier than others.
“Investing is way too hard,” said no one who read this article. Try any or all of these low-effort methods of investing and watch your bottom line grow…all while you’re relaxing.