In today’s fast-paced world, building wealth can feel like an insurmountable task. Between managing daily responsibilities, staying on top of work, and squeezing in personal time, it’s easy to feel overwhelmed by complex financial terms and investment options like derivatives, yield curves, and REITs. You might wonder, “How do I start investing without becoming a finance expert or needing hours every week to manage my money?”
The good news? You don’t need to be a seasoned investor to create a strong foundation for wealth. With some straightforward steps, you can set yourself up for financial success without constantly watching the markets or dissecting individual stocks. Here are six powerful strategies to help busy people get started on their wealth-building journey:
1. Consider Mutual Funds and ETFs
Mutual funds and exchange-traded funds (ETFs) are a great way to start investing without diving into the complexities of individual stocks or bonds. These funds bundle together various securities, giving you a way to invest in a diversified mix with just one purchase. They’re efficient, flexible, and allow you to spread out your investments without having to analyze each company’s performance.
The benefits of funds include:
- Convenience: Easily access different sectors or asset classes.
- Diversification: Spread your risk across multiple securities.
- Professional Management: Actively managed funds are overseen by financial professionals.
However, it’s essential to be mindful of fees, especially with actively managed funds. To minimize costs, look for funds with low or zero expense ratios—Fidelity, for instance, offers options with no fees on select funds.
2. Look into Target Date Funds
If you’re saving with a specific time goal in mind, target date funds might be the ideal solution. These funds are set up to adjust their asset allocation automatically based on a specific target date, like retirement or college funding. They start with a more aggressive investment mix, gradually shifting to a conservative allocation as the target date nears.
Target date funds are especially convenient because they adapt automatically, saving you the need to adjust your investments as time goes on. For example, a “2040 fund” will evolve its asset allocation to be safer as it approaches the year 2040. One downside is that you can’t customize the holdings as precisely as you might want, but for busy investors, the ease of use often outweighs this limitation.
3. Let a Robo-Advisor Take the Lead
Robo-advisors are digital platforms that provide automated financial advice with minimal human intervention. By answering a few questions about your goals, time frame, and risk tolerance, you can receive a custom portfolio aligned with your financial objectives. Robo-advisors handle everything from investment selection to rebalancing, making them perfect for those with limited time or investment knowledge.
Many robo-advisors offer low fees and give you access to a diversified portfolio. Some platforms even offer hybrid options that allow you to connect with a financial coach for a personalized touch. Whether you’re new to investing or simply looking for a hands-off approach, a robo-advisor can help you stay on track toward your goals without added stress.
4. Invest in a Model Portfolio
If you’d like some control over your investments but don’t want to build a portfolio from scratch, consider using a model portfolio. These portfolios come pre-set with asset allocations designed by financial experts, allowing you to choose one based on your investment goals and risk tolerance.
For example, if you’re interested in sustainable investing, you can select a conservative or aggressive model portfolio focused on socially responsible companies. With a model portfolio, you’ll still have some flexibility while benefiting from professional guidance. Plus, it takes much of the guesswork out of maintaining a balanced portfolio, as you can simply review and rebalance it periodically.
5. Consider a Managed Account for Personalized Advice
A managed account allows you to work with a dedicated financial advisor who can oversee your investments and make adjustments based on your financial plan. This is a fantastic choice if you’re looking for an all-encompassing approach that considers retirement, tax planning, and estate strategies.
While managed accounts typically require minimum investment thresholds and involve management fees, they provide the benefit of personalized service. An advisor will handle the ongoing adjustments in line with your goals, freeing you from the details and potential stresses of self-managing your finances. If you value expert guidance and want to maximize your financial outcomes, a managed account may be worth exploring.
6. Put Your Contributions on Autopilot
For busy people, automation is a game-changer. By setting up regular, automated contributions to your investment accounts, you’ll build wealth consistently without needing to remember to make transfers. Most 401(k)s already feature auto-investments, but you can also set up automatic contributions to IRAs, HSAs, brokerage accounts, or even college savings plans.
Automating your contributions has several advantages:
- Reduces Procrastination: Automation ensures regular investments, even on busy weeks.
- Encourages Dollar-Cost Averaging: By investing a fixed amount at regular intervals, you reduce the risk of buying at high prices.
- Allows for Incremental Increases: Some employers even allow automatic percentage increases to 401(k) contributions each year.
To take full advantage of automation, consider setting up regular contributions to your other accounts as well. Dollar-cost averaging can reduce the emotional impact of market fluctuations, allowing you to stay invested without the stress of timing the market.
Final Thoughts: Building Wealth with a Busy Schedule
It’s possible to grow your wealth without getting tangled up in financial jargon or spending hours each month managing your investments. Whether through mutual funds, target date funds, robo-advisors, model portfolios, managed accounts, or automated contributions, you have many options to build a wealth plan that fits your life.
As Aliya Padamsee, a certified financial planner, wisely points out, “The most important part of investing is not picking individual investments, but having the right asset mix.” Focusing on a diversified, hands-off strategy allows you to stay on track without the daily distractions of the market. By implementing even one or two of these wealth-building methods, you’ll be making meaningful strides toward your financial goals—no complicated analysis required.
Embrace these options, set your plan in motion, and watch as your wealth-building journey unfolds, leaving you with more time to enjoy the things that matter most.
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