Strategy
If willpower is your investing strategy, you've already lost. Here's how to set up an automated investing system that runs on its own and beats 95% of active investors over time.
By Suroy Thamotharam
Most people who fail at investing don’t fail because they picked the wrong fund. They fail because they didn’t keep investing.
They started strong in January. By April, life got busy. By July, the market got scary. By December, they hadn’t contributed in 5 months and felt guilty about it. By the next January, they were starting over.
This is the universal cycle of the willpower-based investor. The fix isn’t more willpower. It’s removing willpower from the equation entirely.
An automated investing system means: every paycheck, money moves from your chequing account to your investment account, and that money gets invested in a pre-decided portfolio, without you doing anything.
You don’t decide whether to invest this month. You decided that once, six months ago, when you set up the system. Now it just runs.
This is the single highest-leverage move in personal finance. Not which fund to buy. Not what your asset allocation should be. Just: making the decision once, then never making it again.
Willpower is finite. You have more on Monday morning than Friday night. You have more in a good month than a stressful one. If your plan requires “I will remember to invest $500 every paycheck,” you’re going to forget. Eventually you’re going to skip. Eventually you’re going to stop.
An automated transfer doesn’t know it’s Friday. Doesn’t know you had a bad week. Doesn’t know the market dropped 10%. It just runs.
Trying to invest at the perfect moment is a lottery ticket. Even Wall Street professionals with billion-dollar research budgets can’t consistently time the market - studies show ~95% of active fund managers underperform a simple index over 10 years.
Dollar-cost averaging into the same fund every paycheck takes timing out of the equation. Some paychecks buy at high prices, some at low. Over decades, you get the market’s average return. Which is way better than what you’d get trying to “be smart” about it.
When the market drops 20%, every fiber of your being is going to tell you to sell. Stop the bleeding. Move to cash. Wait for it to stabilize.
This is also exactly when you should be buying more (the prices are on sale). But you won’t, because your brain is screaming.
An automated system buys anyway. Your $500 still moves. Your shares still get purchased - but at the lower price, you get more of them. Twelve months later when the market has recovered, you own more shares than you would have if you’d “waited for stability.”
The biggest investing returns in history come from people who kept buying through the 2008 crash, the 2020 pandemic, and the 2022 correction. Almost none of them did it on purpose. Their automation just kept going.
Here’s the system that works for 95% of Canadians:
If you don’t have them yet:
Best places to open them:
Avoid bank investment accounts. Their MERs are 1.5-2%. You’ll lose six figures over a career to fees.
How much can you afford to invest per paycheck or per month? Be honest. Set it slightly lower than you think you can afford so you can ALSO maintain the system when an unexpected bill hits.
Rough guidelines:
Don’t try to be a hero. The habit matters more than the amount. You can always increase later when your income grows.
In your chequing account online banking:
That’s it. The bank handles the transfer. The investment account holds the money.
If you’re using Wealthsimple Invest:
If you’re using Wealthsimple Trade or Questrade:
The Wealthsimple Invest route is more hands-off. The Questrade + Passiv route is cheaper at scale. Either works. Pick one and move on.
This is the hardest step.
The market will go up. You’ll feel smart and want to add more. Resist - stick to your automated amount unless your income changed.
The market will go down. You’ll feel anxious and want to stop. Resist - this is when your dollar buys the most shares.
You’ll see a hot stock on social media. You’ll wonder if you should be “doing more.” You probably shouldn’t.
The system works because you let it run. Tinkering with it is how most investors hurt their returns.
A whole article could be (and has been) written about this. Short version:
For 90% of Canadians: a single all-in-one ETF.
Options to research:
Pick one. Buy only that one. Forget about it.
If you use Wealthsimple Invest, they pick the equivalent for you based on your risk questionnaire. Even easier.
Common mistake: owning 8 different ETFs because each one “made sense” at the time. You end up with the same diversification as one all-in-one ETF but with more complexity. Simpler wins.
Automation is powerful but it can’t solve three things:
If you genuinely can’t afford to invest anything, the priority is increasing income, not finding clever investment strategies. Side hustle, job switch, ask for a raise, get a credential. Automation helps you invest what you have - it doesn’t create money out of nothing.
If you have credit card debt at 20%, every dollar you “automate” into investing is a dollar that should be paying down the debt. Investing at 7% while carrying 20% debt is mathematically losing money. Clear high-interest debt first. Then automate.
If you’re automating into a 2% MER mutual fund at your bank instead of a 0.24% MER ETF at Wealthsimple, you’re optimizing for the wrong thing. The MER difference will cost you hundreds of thousands over a career.
Make sure the account is set up correctly before you start automating. Wrong account, automated, makes the mistake bigger every month.
There’s a spectrum:
For most beginners: go fully automated for the first year. Get the habit locked in. After a year, if you want to switch to a more hands-on broker for lower fees, you’ll be ready to handle the extra steps. If you don’t, you stay at Wealthsimple. Both work.
Why does this matter so much? Because the difference between an investor who automates and one who doesn’t isn’t a few percent. It’s an order of magnitude.
A 30-year-old who automates $500/month at 7% return for 35 years ends up with around $830,000 at age 65.
A 30-year-old who tries to invest “when they have extra” and ends up actually investing about $300/month with constant gaps ends up with around $400,000 at age 65.
Same person. Same income roughly. Different system.
The first person automated. The second relied on willpower.
To see your specific numbers, try the Compound Interest Calculator. Set “automatic monthly contribution” to what you can actually afford, and “years invested” to your time horizon. Compare with “monthly contribution” at half that amount (to simulate the gaps a willpower-based investor would have).
That’s the entire system. Once it’s running, you literally never have to make an investing decision again until your income changes meaningfully.
For most people, this single change - going from manual to automated - is worth more than picking the “perfect” fund. It’s the difference between an investor who finishes the marathon and one who keeps starting it over every January.
Set it up this weekend. Future you will thank you with a six-figure portfolio they didn’t have to think about.
Tools mentioned in this article
About Suroy
University Finance degree (with distinction). 13+ years personal investing. 10 paid coaching clients before going public. Financial Coach based in Toronto.