If you follow any non-profits–or even any independent creatives–, you’ve probably been asked at one point or another to join a recurring donation program. Maybe they asked you to give the equivalent of a cup of coffee each month or to sponsor a child’s education with a dollar a day.
This happens because non-profits and creatives live off your donations, and they’ve figured out that recurring donations maximize online fundraising results. Recurring donations are the most reliable, low-maintenance, and profitable form of fundraising available.
Now, think of your 63-year-old self. Your future self will live off of what you invest today. Essentially, your future self is a non-profit, and just like any good fundraising consultant would advise a nonprofit director, I am advising you to incorporate a recurring donation program into your investment strategy today. With any of these 3 tools, you can effortlessly start automating recurring deposits into your investment portfolio right now.
But first, a reason to start right now.
The greatest thing about setting up recurring deposits right now is that in 40 years they will be worth way more than what you’re giving now. While the $30 you give to a non-profit to sponsor a child’s education will give $30 of value to that child today (and this isn’t to say you shouldn’t do that), $30 you invest today could easily give yourself somewhere in the neighborhood of $360 in 40 years. That means that with just $100 per month now, you can ensure an income for your active, retired, non-profit self of around $1,200 per month in that same time.
So here we go 3 tools to effortlessly automate recurring deposits into your investment strategy today.
Tool #1: Automate Deposits with Your Current Service
Most investment services already provide the most common approach to setting up recurring deposits. Simply, they let you set up recurring deposits! Whether you use Fidelity, Vanguard, Wealthfront, Betterment, or any of the numerous investment services out there, they probably give you the option of automatically transferring a set amount of money from your bank account to your investment account each month, or however frequently you like.
If you already have an account with one of these services but haven’t seen this before, just go looking for something with words like “recurring,” “automate,” or “schedule” combined with the word “deposit” or “transfer” and you should find it. If you can’t, there is still the possibility that some services don’t provide this feature yet. If that’s the case, I would suggest finding another service or requesting they add this to their product mix. It is that important.
Tool #2: Acorns
Acorns is an ingenious micro investing platform that invests your spare change, from every purchase on the debit cards that you connect to it, into your portfolio. If you buy a cup of coffee for $3.75, Acorns will round that up to $4, and invest the remaining 25 cents on your behalf. Acorns gives new meaning to the idea of donating a cup of coffee each month. Every purchase you make will contribute to your investment.
You can set up your Acorns account from your mobile device or laptop in just a couple minutes if you’re a U.S. citizen, and start building on your investment right away. The service does charge a small monthly fee, but if you use the card that you’ve connected to the account consistently, you’ll find yourself racking up the deposits and investing more than you likely would have otherwise, without even thinking about it. You’ll thank yourself later.
Tool #3: Betterment SmartDeposit
Betterment is another great investment service. It doesn’t take any particularly unique approach to investing, but it does streamline the overall process to make your role super easy, and it does offer a really useful feature called SmartDeposit.
With SmartDeposit, you can tell Betterment how much money you feel comfortable having in your bank account–in other words, the amount that you don’t want Betterment to touch–and Betterment will simply take whatever is above and beyond that amount, automatically.
This means that you never need to go directly to Betterment and organize a transfer unless you’re intentionally dipping below your comfort level. Any time you get a bonus or get a break from expenses for a little while, all you have to do is make sure that that amount is in the bank account that you have connected to Betterment, and they will do the rest. You can add this to the regular recurring deposit feature Betterment offers in order to maximize the amount of surplus cash you invest.
Every investment service offers something unique, whether it has to do with automation, fees, or interface. If you have the time, exploring a few services in greater depth will give you a feel for what is available, and then you’ll really be able to make a good decision regarding what fits you best.
Just make sure they let you automate recurring deposits.
Author Bio: Stephen Erich is an MBA student who writes for MoneyNomad.com and InvestmentZen.com. Stephen likes applying business principles to social issues, and his adventures in the social sector have taken him everywhere from Southwest Michigan to Southeast Asia.