In order to have a good amount of money to reach financial freedom, we should know how to do the right investments. Sometimes the investments can be the best one but we miss doing it. I remember doing an SIP a few years back. For some reason the SIP stopped after a particular month and I was lazy to reinstate the SIP. Today the mutual fund value is 3 times my invested value. If I had continued doing the investment for several more months, it would have been a very big lump sum value. I always regret not reinstating the automated investment.
The biggest advantage with the automated investment is that we don't have to monitor it frequently and it will keep happening. Sometimes we might have to do some checks and fix some issues but otherwise the automated investments will keep going and it will be the best one.
Frequent portfolio checking
When we are doing automated investments, there is usually no need to check our portfolio and make adjustments. If we are doing the right investment, then the value should automatically grow. There is no harm in checking the portfolio once in a while to make some minor adjustments. In most of the cases the money that we invested will take care by itself and start creating additional money. Recurring investments is a good thing because it goes invisible and will also not affect our financial flow but one fine day it will grow big and be visible as a big number.
Dollar Cost Averaging
The advantage of automated investment is that it gives us the opportunity to do a DCA without our knowledge. Some of the concrete investments will keep growing over the course of years. With the help of continuous investments we are doing DCA without our knowledge. Sometimes we can also take the time to look at our portfolio and do some additional investments at the right time so that during the peak market, we will be of benefit. It is not that we can do this only for stock market investment but pretty much all the investment can be adjusted with DCA to increase our success outcome.
Compound interest is a magic
We all would have heard that compound interest is the magic. This works very well when we do automated investments. If we keep accumulating funds with the help of automated investments, the value will grow bigger over the course of years and ultimately after a point of time, it will keep growing exponentially even though we invested only a small value but continuously. This is the magic of compound interest and it will not be visible clearly to our eyes but the magic keeps happening.
If we are at a young age, there is no harm in taking risks too. The magic of compounding is good if we do the investment at a very young age. This means that we will have more time to explore and more years with compounding if we start doing it early.
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