This One Move Has Made the Biggest Difference in Increasing My Brokerage Account Balance

This post may contain affiliate links which may compensate us based on your interaction. Please read the disclosures for more information.

Automating my investing and making sure money transfers to my brokerage account regularly made a huge difference in my account balance. Read on to learn why. 

My brokerage account balance has been growing really nicely over the past decade. I have my money invested in pretty safe investments, with most of my funds in S&P 500 index funds or other index funds that track the performance of the stock market as a whole or specific sectors of it.

While I’ve spent a little bit of time researching my investment options and picking assets to buy, the thing that has actually made the biggest difference in growing the size of my account balance is not a particular investment. Instead, here’s what has helped my account grow.

My brokerage account balance has grown because of this one money move

The biggest contributing factor to my growing balance is the fact that I have set up automatic transfers of money into my accounts.

Basically, my payments from the company I work for are deposited into my account on a set day. As soon as that money comes in, a portion of it goes out again. I don’t get to spend it, it just passes quickly through my bank account and goes directly into the account at my brokerage firm.

This has been set up for a long time, and the only change I have ever made is to increase the amount of money I have deposited to my investment account as my income has grown to ensure that I’m still investing around 15% of my earnings.

Once the money goes into my brokerage account, I use dollar-cost averaging to buy a set amount of the same S&P 500 index fund each and every month. I don’t worry about trying to time the market, or about how many shares that amount of money is buying for me. Each and every month, the same process happens with the same assets being purchased for the amount of money I transferred over.

Why automatic transfers to an investment account can make such a big impact

Setting up transfers from my checking account has made a huge difference in how big my brokerage account balance is because it ensures that investing is automatic and effortless.

My default position is to invest. I don’t have to think about how much I want to put into my account each month since I already did that calculation a long time ago. I don’t have to decide how much I can spend in order to invest enough — I just know I can spend what is left over after my investments are made.

And, as my money is invested every single month, my brokerage account balance grows and grows — not just because of those deposits, but because those deposits then earn more returns for me and my balance keeps getting bigger.

Automating investments to ensure you are consistently putting money in the market can be more important than just about any other financial move you make. It ensures your money is always going to be working for you, helping to set you up for a secure future. Give it a try for yourself and you’ll soon see your account balance growing too.

Our best stock brokers

We pored over the data and user reviews to find the select rare picks that landed a spot on our list of the best stock brokers. Some of these best-in-class picks pack in valuable perks, including $0 stock and ETF commissions. Get started and review our best stock brokers.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

 Read More