Turn Your Income Into Effortless Wealth

Originally published: 2017.  Updated: 2025.

Pay yourself first. That’s the advice from many finance gurus.

It’s even written about in legendary books like “The Richest Man in Babylon”.
By the way, that’s a great book you should definitely read!

The main message is: A part of all you earn is yours to keep.

My takeaway from books like that is, make saving and investing your number one priority!

There’s an issue with this though…

For many people, this just doesn’t happen. They want to. They need to. And they intend to…. but it just never actually happens!

Either you’re a saver, or you’re not. Most of the time, you’re one or the other.

The reality is some people just can’t save without being ‘forced’ to save. Not with a gun to their head. But with a simple commitment that they forget about, like a mortgage or their superannuation.

The prime reason that superannuation and home-ownership work so well at building wealth over the long term – and is often the only wealth people end up with – is that these are automated savings strategies. People don’t really need to ‘do’ anything.

A part of their pay is taken and invested into their Super Fund for the entirety of their adult life. And the mortgage just comes out of their bank every month, year after year. As a result, both of these automatic payments continuously improve their financial situation, bit by bit, without any effort on their part.

It’s pretty awesome when you think about it. If you set up your finances in this way, you basically NEVER have to think about saving because it’s all happening automatically.

I’ve eventually come to realise that not everyone’s a weirdo like me who finds investing more fun than spending. So, things like this are powerful to work around human behaviour.

Applying some sort of automation like this is a highly leveraged decision. By that I mean you take one little choice, and one little action, and it has a huge impact on how wealthy you become over the next 10, 20, 30 years.

There’s multiple ways automation can help with your finances and life goals.
Let’s run through a few ways and the key lessons to apply regardless of whether you plan to automate your finances or not.

#1: Automate your savings

If you’re just starting out, getting an automatic savings habit is probably one of the best things you can do. It doesn’t even matter how small it is – $20 a week, anything. What matters is starting and making it as seamless as possible.

But it’s also useful if you’re trying to build an emergency fund, a home deposit, or anything else. Have a separate account you don’t touch, and make sure it ONLY goes up – money only goes in, never out, until you reach your goal.

Now, sometimes automation can be tricky since we often have lumpy income or expenses. You can work with that reality by setting a minimum savings amount, which accounts for the lumpy nature of these things.

So rather than aiming for a target of say $500 a week, maybe you set it at $250 to give yourself that wiggle room, and then you also sweep away whatever’s left at the end of the month. At least you know the job is mostly done, and automation is helping ensure you only go forwards. If your finances are more predictable, you can set it closer to what your maximum savings amount is..

#2: Automate Extra Mortgage Payments.

Possibly the simplest wealth-building strategy is to set up automatic extra repayments on your mortgage. This helps you pay off your home loan faster, saving thousands in interest over time.

Even an extra $50 or $100 per month can make a massive difference. Since interest compounds against you in a mortgage, every extra dollar you put in now saves you much more in the long run.

Plus, once your mortgage is paid off, your cost of living drops massively, giving you more freedom and breathing space.

Most loans allow you to make additional payments – either contact your bank to adjust the amount you’re paying, or setup an additional direct debit into your loan for an amount that works for you. It’s another way to make forced savings work in your favor!

Of course, some people prefer an offset account instead, which gives more flexibility over that cash. If you’re unsure, think about whether you trust yourself to leave the money alone—because that’s where paying directly off the loan has an edge.

As an example of this strategy, my friend, who’s not super into finance like me, has paid extra on his mortgage for years. He set up the payment once and has never thought about it again – because it’s just a regular deduction, he doesn’t even question it.

Now he’s way ahead on his payments from this one decision. He could probably take a break and not make a payment for years and still be fine!

#3: Automate your super contributions

Now you probably already get automatic super payments if you’re an employee. Here, I’m talking about extra contributions where you put more into your super.

How useful this is depends on your situation and tax rate, but for many, it’s a great long-term wealth-building tool. If you’re young and trying to create freedom as early as possible, it’s probably not the right move. But if you’re planning to retire into your 40s or 50s, and you’re on a higher income, adding to super can make a lot of sense.

You can ask your employer to deduct extra from your pay and send it straight into your super. This is called salary sacrificing and has tax benefits since, for most people, super contributions are taxed at a lower rate than regular income.

If you’re self-employed or prefer managing it yourself, you can set up automatic bank transfers to your super fund (contact your fund to get the details). These contributions will typically also be tax-deductible.

Super is a powerful long-term wealth-building vehicle, and making extra contributions early on can massively boost your retirement savings thanks to the magic of compounding.

#4: Automate your investing

While some people can’t wait to get spare cash invested, for many would-be savers, they never quite get there.

Since it works so well for home-owners and super, let’s apply the same principle to our investing. Instead of forced saving, you could think of it as Forced Investing.

If you’re someone who would like to invest more, but it just doesn’t happen because you get distracted or nervous or whatever, this is for you. Login to your online banking right now. Set up a direct debit, from your account into your ‘investment’ account.

This could be a brokerage account with someone like Pearler or CMC, or a direct investing account with someone like Vanguard or Betashares. If you need flexibility, you can always just change the amount. But do your best to leave it as is. At least you KNOW you have that option if you really need it.

Now, each month, you can login to your investing account and buy your chosen shares since the money is sitting there waiting for you. You’ve removed one step of the process, and made it easier to get done. You can take this a step further if you have an account which offers automatic investing. I use Pearler which does offer automation, and I think Vanguard has some options too.

If you do that, then you don’t even need to buy the shares – it’ll happen automatically. This can be powerful if you look at the market too much and question whether it’s a good time to invest. That sort of behavior is more likely to do harm than good.

#5: Dividend Reinvestment Plans (DRPs)

Let’s say you’ve started investing and you now own shares in an ETF. In the not too distant future, there will be some cash payments coming your way, in the form of dividends – usually every 3 months.

When you first buy those shares, you’ll usually get some paperwork in the mail, asking if you want to participate in the Dividend Reinvestment Plan (DRP). Essentially, they’re asking you if you want to receive your dividend in cash, or reinvest it and receive more shares instead.

To automate your investing even more, you can complete the paperwork saying you’d like to enroll in the DRP, and send it back. Now you’ll receive more shares every time a dividend is paid, instead of cash.

The best part about this is… you don’t have to do anything! It’s another level of automation.

As time goes on, the amount of shares you receive each time will get larger (because you’ve invested more. So the overall amount of shares you own keeps increasing more and more. And you can always switch back to receiving the dividends in cash again, any time you like.

Personally, I get the dividend sent to my bank account and combine it with whatever cash is available to buy my next parcel of shares. I just prefer it this way, since it gives me more control over where I’m investing my money each time (and its also nice to see it hit the account). But the DRP approach is a solid option for set and forget investing!

Commitment is Key

The underlying principle here is to make saving/investing a regular thing. Every time you get paid, make sure some of it is sucked away into productive places before you can get to it.

Set up an automatic savings plan – weekly, monthly, whatever’s most convenient.
It doesn’t matter how much it is, just set the damn thing up and start investing.

Many of you are probably already investing regularly, but it can’t be overstated how powerful this can be. Even if your cash machine is set up and you’re benefiting from automation, we can still improve it further.

Incremental Improvements

Let’s say we’ve got a direct debit of $1000 per month going into our investing account.

How hard would it be to increase this by $10? Not hard at all.
Everyone can find an extra $10 a month, even the super-savers amongst us!

After another month or two, we could then increase our automatic investment to $1020. Another month or two later, $1030. You get the idea!

The reason this works – and automating your finances in general – is because we won’t even notice the money is gone. We just get used to living on whatever’s in our account.

So we’ll manage just fine without the extra $10, $20, whatever it is. You can pull this trick again and again until you eventually hit a ceiling where things are pretty tight. Then you know you’re operating efficiently.

Dollar Cost Averaging

Another great thing about Automated Investing into the sharemarket, is you don’t have to worry about share prices.

If you commit to investing a set amount every month, your purchase prices will average out over time. This is called Dollar Cost Averaging, and it’s one of the coolest things about investing on a regular basis.

What happens is, because you’re investing every month at different prices – your money will stretch further and buy more shares when the market is low. And if the market is high, your money will purchase fewer shares, giving you an averaging effect.

What people don’t realise is, this also means you are timing the market without really trying to. In 10 years time, a higher number of your shares will have been bought at lower prices because of how DCA works. This means, investing the same number of dollars every month improves your returns with zero effort compared to buying the same number of shares every month.

The reality is, many people get lacklustre performance because they let their emotions ruin their investing habits. The investor who is buying regularly, regardless of market conditions, is likely to have the best results with the least amount of stress.

The secret to wealth is: Don’t Wait

Don’t wait for the perfect time to invest, till you’ve got a big amount to get started, or until you find the perfect investment.

There’s always a reason to put it off… instead find a reason to do it NOW!

You’ll learn heaps as you go, and then you can invest more as you get comfortable.
It might seem scary or even boring at first. The numbers feel small and it might not seem worth it. But don’t be discouraged. Everyone starts somewhere. It doesn’t matter how small you start, it just matters that you start!

Make saving and investing a habit that takes you no effort. Like brushing your teeth. You don’t even think about it. You just do it. Your goal is to essentially become an investing robot – and automating things can help you do that.

The Money Factory

I’ve really grown to love investing in shares, despite being an enthusiastic property investor a decade ago.

The sheer effortless nature of shares is hard to beat. You just invest the money and there’s literally nothing to do except watch those little chunks of money get paid to you on a semi-regular basis.

Possibly the wealthiest man in history, John D. Rockefeller famously said, “Do you know the only thing that gives me pleasure? It’s to see my dividends coming in.”

Eventually, it’s kinda like having your own money factory!

The machines hum with productivity. The parts rattle and the cogs turn. At the end of the money production line, there’s a big skip bin. The money gets churned out and slowly fills up the skip bin. And every 3 months or so, that skip bin is dumped on your lawn for you to roll around in.

That’s a pretty nice thought I reckon. And you can create that reality with the right strategy and enough time.

Starting out, the numbers are small. But as you invest more, the portfolio grows, companies become more valuable and your dividend payments get bigger.

With every investment you make, you’re less reliant on your job.

Another motivating way to think about compounding

— Every time you purchase shares, your dividend income increases.

— Every time you use your dividends to buy more shares, your dividend income increases.

— And every time the companies you’re invested in increase their dividends, your dividend income increases.

Ultimately, your portfolio and income will compound over time as all the companies in your ETFs become more profitable. The best part is you can set it up so this cash machine is building and spitting out money automatically.

The reason automation works is because the main barrier to success for most people is human nature. Which leads to too much spending, too little saving, and too much fear around investing.

If I’ve convinced you that automating some part of your finances is a good idea, do it now while it’s fresh in your mind! Go and automate either your savings, your investments, your mortgage, or your super – any part of your wealth-building plan!

And then take a moment to kick back and celebrate, because you’ve basically just guaranteed your long term success.

Useful stuff to help you on your journey:

📘 My Book
The ultimate guide to FIRE for Aussies – clear, simple, and practical. Grab it on Amazon, Audible and Spotify.

🏡 Mortgage Broker
My trusted contact for all things home loans. Easy to work with and super helpful. Check them out.

📊 Sharesight
What I use to track my portfolio performance, dividends and capital gains. Try it here.

👇 Want a free resource to track your progress?