With interest rates so low, investing in shares is becoming a popular choice for financially lit(erate) Aussies to get more bang for their buck when it comes to saving for their future. Our friends at Pearler are all about long term investment strategies that mean less effort, less stress, and more time spent living your best life. Sounds good to us! Here’s how to set up and automate the ultimate long term investment strategy.
Set A Long Term Goal That Matters To You
When it comes to automated investing, a long term goal is key. It’s not about getting rich quick; it’s about slow and steady contributions to your future wealth. For this type of investment strategy, set a goal that’s a minimum of five years away—so no, not your post-COVID Bali trip.
Your goal should comprise of three things:
- How much you want to reach (are you shooting for $1million by your 40th birthday?)
- What you want to reach that number for (what will that money be used for? I.e. a certain lifestyle, a travel-filled retirement, school fees for your kids?)
- Things that matter to you and your values (i.e. ethics, sustainability, tech, innovation, etc)
Invest In Diversified Index Funds/Etfs
Once you’ve got your goal, you can begin moving towards it—the fun part! Index funds and ETFs are essentially bundles of shares from multiple companies. These investments work well as part of a long term strategy, as the growth tends to be slower and steadier as the index itself changes in value.
You can also choose funds that align with the values aspect of your goal. You can invest in companies that fund sustainable projects, invent new technologies, or are focused on specific industries.
Currently in beta phase, Pearler is developing its platform to allow long term investors to share their strategies, what they invest in and why they invest in it, to open up the conversation around why we invest and how we align our strategies to our lifestyles.
Invest Set Amounts Regularly To Average The Market
Don’t try to time the market. Long term investment strategies tend to use the concept of dollar cost averaging. This means investing set amounts at regular intervals, no matter what the market is doing, to eventually average out the share price you pay.
For example, if you invest $1,000 per month regardless of market performance, you’ll pay different prices for the shares you’re purchasing each time. If one month you’re paying $1 per share, you’ll get 1,000 shares that month. If the next month you’re paying $0.90c per share, you’d get 1,111 shares that month. This strategy means you can offset the higher cost of your shares when the market is performing well by purchasing more shares for the same money when the market drops.
Pearler allows long term investors to automate their investment strategies by setting up a regular investment on the platform into your chosen funds. This means once you’ve set your goal, chosen your funds and how much you want to invest, you can set, forget and watch your wealth grow over time. Everything else in our lives is automated—superannuation contributions, Netflix, why not your investments!? You can search shares listed on the ASX (Australian Stock Exchange) and filter by the most popular funds based on real user data, helping you make investment decisions that work for your lifestyle.
Emma is a finance blogger at The Broke Generation and a reformed spendaholic. She shares hot tips on saving, property, tax, career and investing for millennials who want to break the spending cycle and get financially confident.
Pearler is a challenger investment platform that’s helping Aussies reach financial freedom faster and easier. Focused on long term investing to create sustainable, real-life wealth on any income, Pearler is changing the game of investing by starting the conversation among real people. Right now, Pearler is granting access to Aussies who are already feeling on top of their money. You’ll have a chance to see brand new functions and invite friends and family who could use some inspiration on getting their money sorted. Skip the waitlist by using this link.
Image Credit: Sharon Garcia