What is a robo-advisor?
An intelligent investment firm, or robo-advisor , manages your portfolio with as little human intervention as possible, protecting your money from your own self-sabotaging instincts, along with those of your money manager. The company puts decisions into the hands of computer algorithms, which are much more resilient in the face of volatility and uncertainty than we short-sighted humans.
The way I think of it, it s a bit like sending a robot grocery shopping. While
you might get into the aisles and abandon your carefully-tailored meal plan at the first sign of a stomach rumble, your robot companion will never reach for junk food or tabloids at the register. It knows what s good for you, and will stick to the plan you agreed upon together, in your stronger moments dutifully returning home with spinach and quinoa no matter
1. You don t have a plan for your savings
If you don t have a plan for your money, you re more likely to leave it sitting in your checking account, waiting for whatever comes up. This isn t an efficient way to build wealth.
Instead, decide how much you d like to see go towards each of your financial goals, and set up an automatic transfer from your checking account to your savings, retirement, and investment accounts each month.
A plan can help make your dreams a reality, and let you save what you need while directing the rest towards other goals and bigger growth opportunities.
1. They planned for a big down payment
Jennifer and Brian made a 51% down payment $260,000 on the home, which reduced their mortgage by half. Although it was a large amount, they were able to pay it because they had always been avid savers, even when they didn t know what they were saving for.
Since college, they had kept a tight budget on their expenses and always saved whatever was left over, even if it was as little as $50 a month. As their income increased, they did not spend more, but instead, increased their savings amount. This strategy managed to help them grow their savings gradually over 14 years.