Note the following content is intended to be educational but it does contain promotional material for Kaldi.

We all like saving money on our purchases, but what if your everyday spending could do more than just save you a few pounds here and there? Enter Kaldi, a new cashback app that's changing how we think about our daily purchases. By automatically investing your cashback, Kaldi turns spending into a potential wealth-building tool. It's a pretty unique concept, so let's take a closer look at how it works.

What's cashback, and how does Kaldi make it different?

Cashback is pretty straightforward: you get a small percentage of your purchase back when you spend money at participating retailers. It's a nice little bonus, but let’s be honest, usually that money just goes right back into your account and gets spent on something else.

Kaldi does things a bit differently. Instead of letting that cashback gather dust, you can automatically invest it in the stock market. Don't worry if you're not an investing expert, as Kaldi is designed to make the process simple and hands-off.

How Kaldi's auto-investing works

If phrases like "auto investing" sound a bit much, like something from a dystopian Capitalist future, we can confidently tell you that it's not that deep. Indeed, it's a simple three-step process that requires you to do absolutely nothing other than use Kaldi to make everyday purchases:

1. You ship at one of Kaldi's partner retailers
2. You earn cashback on your purchase
3. Kaldi automatically invests that cashback into your preferred stock market funds

That's it. You don't need to remember to invest or decide where to put your money because Kaldi takes care of it for you.

How do I know I'm investing my money in the right place?

It's a fair question. After all, it's your money we're talking about. Kaldi offers a curated selection of stock market index and money market funds to help you pick the right investment to suit your savings goals, without leaving you dizzy with choice. You'll be supported along the way with Kaldi's budgeting tools and helpful tips to make sure you have your money go into the fund that works best with your savings goal time frame.

But what is an "Index fund" or "Money Market Fund"? We have another article which covers this, but essentially, they're a way to invest in a diverse range of assets that track the overall market. This approach is designed to minimise risks while aiming for steady, long-term growth. It's important to note that in reality, investment returns can vary widely and are not guaranteed. The stock market can be volatile, with periods of ups and downs.

Kaldi also gives you the power to manage your money. You can easily check your investment portfolio in the app, seeing exactly what you're invested in and how it's performing, move money between funds and withdraw if needed.

Why auto-investing your cashback matters

Many people think of investing as something the rich do. In other words, the stigma about it probably needs to change. Anyone can invest and really we all should, but a lot of us aren’t taught about these things at a young age. This is where auto investing can help, as it establishes a habit of investing regularly and focuses on trying to grow your wealth little and often. 

There are a few reasons why this approach could be beneficial:

Compound returns

When you invest your cashback, you're not just saving the initial amount. You're potentially earning returns on that money, and then earning returns on those returns. Over time, this can add up. This is called compounding, and we’ve written a bit about it here.

Consistent investing

Life gets busy, and it's easy to forget about investing. With Kaldi, you're consistently investing every time you shop and earn cashback. It's a way to build a habit without having to think about it. You make a purchase, the cashback gives you something back, and it’s then invested for you.  

Making your money work harder

When cashback just sits in an account, it's easy to spend it on small purchases. By auto-investing, you're potentially setting yourself up for bigger rewards in the future. It’s like those round up pots you’ve probably set up with your digital bank, only they’re in hyperdrive.

Starting small

Investing your cashback allows you to start small without significant risk. You're not having to find extra money to invest, as you're simply redirecting money you would have got back anyway. Think of Kaldi’s cashback as dipping your toe, to see what all the hype’s about.

Where can you earn cashback with Kaldi?

Here’s the very, very good bit: Kaldi lets you earn cashback at over 170 retailers, covering a wide range of everyday shopping categories. And you’ll recognise these brands instantly–let’s take a look at some of the big hitters.

• Adidas
• Airbnb
• Amazon
• Boohoo
• Asda
• Aldi
• Costa
• Cineworld
• Deliveroo
• Eurostar
• Ikea
• Lastminute.com
• M&S
• Sainsbury's
• Nike
• Selfridges
• Spotify
• Uber

And that’s just a small selection. The good thing is that you're likely to find cashback options for things you're already buying. It's not like you’re changing spending habits. Instead, you’re making your existing habits potentially more rewarding.

Making the most of Kaldi

You’re excited, and Kaldi gives you cashback at some of your favourite places to shop. Things are looking good, coming up Millhouse, one might even say. But how do you get the most out of using Kaldi to get cashback that invests for you?  

Here are some tips:

Check Kaldi before making online purchases

Use Kaldi alongside other money-saving methods

Keep an eye out for special promotions

Tell your friends (you can earn referral bonuses)

Review your investments periodically

Now the boring, but very important part: risk

It's important to remember that investing always involves some risk. The value of your investments can go up and down, and you might get back less than you put in. By investing your cashback, however, you're not risking money you were counting on for everyday expenses. It's extra money that you're putting to work. Also, because you're regularly investing small amounts, you're using a strategy called 'pound cost averaging'. This can help smooth out the ups and downs of the market over time.

Pound cost averaging?  

Pound cost averaging is an investment strategy where you regularly invest a fixed amount, regardless of market conditions. This approach can help smooth out the impact of market volatility. By investing consistently, you buy more shares when prices are low and fewer when they're high, potentially reducing your average cost per share over time.

Ultimately, there’s no guarantee that you’re going to make money (unfortunately as they say the only certainties in life are death and taxes). But by investing what you’re already earning back, you minimise the risks involved.  

How Kaldi compares to traditional cashback

Everything seems to offer cashback these days. How many brands, from Barclays to Monzo tell you about their cashback schemes? Now, this isn’t to put a downer on their services, but they offer cashback in the simplest of forms as a bolt on to their traditional products.  

At Kaldi, we do things a little differently:

• It’s specially designed for this- to make your money do more for you

• It’s more than just cashback- it’s an investment tool

• It makes investing effortless

• It's accessible to everyone, not just experienced investors

• It encourages long-term financial thinking

• It's flexible - you can still take your cashback as cash if you need to

The bigger picture

Kaldi isn't just about earning a bit of cashback. It's about changing how you think about your everyday spending. Every purchase becomes a small opportunity to invest in your future.

That new jumper? It's not just keeping you warm - it's a tiny investment. Your weekly shop? It's not just filling your fridge - it's feeding your investment portfolio too.

Over time, these small investments can add up. It's not going to make you rich overnight, but it could help you build a nice little nest egg without drastically changing your spending habits.

Plus, using Kaldi can be a gentle introduction to the world of investing. You're getting started without having to dive in headfirst.

Summing it up

Kaldi's auto-investing cashback feature is a clever way to potentially make your money work harder for you. It's taking something you're already doing (shopping) and turning it into a way to build long-term wealth. It's straightforward, it's smart, and it could be a useful tool for improving your financial future.

Why not give it a try? Download Kaldi, start earning cashback, and see how those small savings could grow over time.  

Just remember that investing always carries risk. While Kaldi makes it easy to invest your cashback, it's a good idea to do your own research and consider your personal circumstances before making any financial decisions.

Happy shopping, and investing!

Investing carries risk - the value of your investments can go down as well as up, and you may get back less than you put in. This article is for informational purposes only and does not constitute financial advice. Always do your own research and consider seeking independent financial advice before making any financial decisions.