Saving a lot. Often. And again.

June found me chaperoning an 8th grade field trip in the Lake Champlain islands. One of the students, a recent immigrant from Africa, discovered that I worked in investments. She followed me around all day, asking questions. The idea that you could make money based on money was so foreign to her that it seemed like magic. She would pose a question, wander away, and return with a follow-up. At one point she asked "But how do you make money from money if you don't have money to begin with?"

To which I responded: "You work hard. You save a lot. And you own businesses via index funds."

It's difficult to overstate how much the middle phrase matters. "You save a lot." As I've mentioned, One Day In July is building a financial simulator, and I've taken it for a spin a few times. Monthly, recurring saving, when plugged into an excellent investment model, delivers an enormous boost to the compounding effect.

Yet it's not all that common. Even when people can save (and many people cannot!), they don't save much. The U.S. savings rate fell to a decade-low 3.1% in the fall of 2017. (1) Let's look at three of the bogies in the room.

1. Peer pressure. It exists in middle school, high school, and it never fully goes away. There is a sense that once someone in your friend group has something, you need it too. Innate to humans and other species, this desire for inclusion is wired deeply into our brains and requires constant training to counter. In economics, this is known as the relative income hypothesis.

2. Endorphins. For a short time, the act of purchasing something creates an endorphin rush. Due to its addictive properties, this drives purchasing toward an ongoing rhythm. As Buffett says "chains of habit are too light to be felt until they are too heavy to be broken."

3. Laziness. It's easy to use money to buy convenience. We are all susceptible to it.

A long time ago, I realized I had to do something about this. The better the investment model became, the more the input (savings) mattered. If the investment program is a dumpster fire, inserting capital into it doesn't have much effect.

But how to effect the needed behavioral guiderails? I decided to implement certain behaviors that would push me down the rewards curve, as if I was living life in reverse. As one example, I will go for a run in negative degree temps late at night in January in Vermont. This is a very inexpensive way to provide entertainment while achieving endorphins. There is a certain amount of pain involved. But it works because when I come back up the rewards curve, something like a $3 gourmet coffee seems fantastic. I don't need a $100,000 boat to feel great. The remaining $99,997 goes to indexing.

You can experiment with your own ideas, but the result is not just that you want to save. You want to save *a lot*. This is a critical behavior to establish in the lifelong transition from worker to capitalist. I'm pretty sure my new 8th grade friend was a convert.

Dan Cunningham

Return to Articles
How We Are Different
Low-fee index funds. Transparent & fiduciary financial advisors.
Local Financial Advisor
We are in your community. We are local.
Investment Management
We tailor to each client. Index funds at the core.
Index Funds
Broad market exposure, low expense.
Dan's Corner
Meaningful musings from our founder.
Your best interests are our priority.
Low Fees
Our fees are among the lowest in the nation.
Financial Planner
Financial advisor optimizes your financial picture.
U.S. Treasury Bonds
Use Treasury Bonds to reduce risk.
Book Recommendations
Here are some of our favorites.
What is inflation, and what causes inflation.
When Should I Invest?
Life transitions = important financial decisions.
Retirement: 401k and More
Retiring? Plan the future you want.
IRA Rollovers
401k Rollovers. IRA Rollovers
Active vs. Passive Investing
We believe there is a winner in this debate.
The Investment Process
How we work: low-cost index funds, personalized attention.
Simplicity is the ultimate sophistication.
Investing: What to Focus On
Low-fee index funds. fee-only advisor.
Switching Financial Advisors
Can be uncomfortable, but an important step.
Advisor Recruiting
We attract top-tier talent. Not your usual firm.
Basic Investing
Let's start with Investing 101.
Understanding Your Financial Statement
Let's break it down to basics.
Taxes on Investments
What causes taxes within your investments?
Behavioral Economics
The less emotion, the better.
Timing the Market in 2020
2020 - a case study in the futility of market timing.
How Financial Firms Bill
Fee-based vs. fee-only, and lots more.
Who Supports Indexing?
Bogle, Swensen, Buffett, and others.
One click to see our fees.
Mutual Funds vs ETFs
Clarifying the difference.
Does Stock Picking Work?
The research says no.
Countering Arguments Against Index Funds
What happens in a down market?
Lots of fees, little clarity.
How Do Mutual Funds Work?
Invest in the basket.
How to Relieve Financial Stress
New client? anxiety is normal.
Financial Terms Glossary
Common investment terms you should know.
Firm Comparison
One Day In July vs the competition.
Retirement Investing
Retiring? Let us help.
Accounts We Manage
We manage a wide range of investment account types.
Pay Yourself First
Saving and Investing for the future.
Investing an Inheritance
Prioritizing and planning for the future.
Frequently Asked Questions
Good questions, real answers.
Women and Investing
Your voice needs to be heard. We are listening.
For the Business Owner
Choosing what's best for your business.
Environmental Investing
Carbon intensity, fossil fuels.




United States



401k Plans



Account Types


Cash Flows

Low Fees


Dedicated Advisor


Advisors: Join Us


Articles on Investing

About the Secure Act

Quarterly Booklets


Vermont Investment Management

Vermont Retirement Planning

Vermont Wealth Management

Vermont Financial Advisors

Investment Tools

In the Media

Shelburne, VT Financial Advisor

Frank Koster | Josh Kruk | Keith McCarthy

5247 Shelburne Rd, Suite #101

Shelburne, VT 05482

(802) 777-9768

Stowe, VT Finanical Advisor

Available for meetings in Stowe.

Peter Egolf

(802) 999-2321

Burlington, VT Financial Advisor

Hans Smith | Katie Bensel

Nancy Westbrook | Peter Egolf

77 College Street #3A

Burlington, VT 05401

(802) 503-8280

Darien, CT Financial Advisor

Available for meetings in Darien.

Keith McCarthy

(203) 554-9466

Rochester, VT Financial Advisor

Available for meetings in Rochester, VT and surrounding area.

Carrie McDonnell

(802) 767-7665

v 2.2.12 | © One Day In July LLC. All Rights Reserved.