Just think how much money you’d likely have if you’d collected all of the loose change over the years for all of the things you buy daily. All of the coffees, grocery store runs, gas tank fill-ups — whatever. You’d probably have a pretty good amount of money saved up. What if you could start taking all that loose change and invest it automatically? Well, you can. That’s the idea behind Round Ups. Round Ups are an easy way to make investing an automatic habit. It lets you invest small amounts of money over time, without even thinking about it, which can help you build wealth. We call that dollar cost averaging.
Let’s face it. Building a portfolio and building wealth tends to be a slow, long-term project that happens over years — not over days and weeks. Having the discipline to contribute to an investment portfolio regularly over time is one of your most important jobs as an investor, but it sure can be a challenge. That’s where Round Ups come in.
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Here’s how it works
Let’s say you use your debit card to pick up a morning coffee that costs $2.50. When you activate Round Ups, the transaction gets rounded up to $3 and the extra $.50 goes into your MoneyLion Investment Account. With Round Ups, this happens automatically every time you make a qualifying purchase. Keep reading for tips on how you can make Round Ups work for you at MoneyLion — using any credit or debit card.
Why you should Round Up
One of the biggest hurdles to investing can be our own behavior. The natural tendency to procrastinate or overreact to market movements and headlines can do significant harm to portfolios over time. There are three ways Round Ups can help investors stay disciplined and consistent over time:
- Automating contributions helps you stay invested, even in challenging times.
The past two years, which experienced the COVID-19 pandemic market crash and recession, have been a great example of this. In hindsight, the market pullback was brief and the S&P 500 ended the year with a strong 18% total return. In 2021, the stock market provided investors with another 18% gain [as of 7/14/2021] despite significant uncertainty along the way. Those who stayed invested despite scary headlines and day-to-day swings avoided selling when prices were down.
Chart: Total annual return of S&P 500 compared to the biggest decline that year
Note that, for the past 30 years, even when downward swings have been large, in most years the S&P has ended in positive territory. Be aware that past performance is no guarantee of future results. Sources: Clearnomics, Standard & Poor’s [as of July 14, 2021].
- Round Ups are a great way to take the emotions out of investing.
Round Ups lets you invest frequently and consistently without having to consider the price of an investment. Regularly investing can be one of the biggest factors of investment success over time. This approach is completely opposite of what you typically hear other people talk about – buying investments, like stock, by timing the market. This is a bad approach because NO ONE can predict the markets, and because of human nature, you’ll likely make some bad investment decisions (instead of buying low and selling high, you’ll likely end up doing the opposite). Round Ups can help you remove the guesswork by investing consistently over time, with the understanding that sometimes when you buy prices will be higher but other times prices will be lower.
Are Round Ups right for you?
Discover MoneyLion Round Ups — and start rounding up with every swipe. At MoneyLion, you can use Round Ups with any credit or debit card two ways to save for a rainy day with a MoneyLion Investment Account. Round up everyday purchases to set aside a little extra for your life goals, dream vacay, house down payment, or whatever matters most to you.
Crypto Round Ups
If you are cryptocurious, Round Ups is also available with a MoneyLion Crypto Account powered by Zero Hash. Round up your spare change to purchase Bitcoin. Start small and build with confidence over time.