The 7 Habits of Great Investors + Q&A · The Personal Finance Podcast · Radar

Automate Your Investing1:23 – 6:32

Andrew GiancolaHost

1:23

So when we think about great investors, we want to understand some of the habits that a lot of them have in common.

Andrew GiancolaHost

1:29

So some investors may have very different strategies.

Andrew GiancolaHost

1:32

They may have very different thought processes on how they invest their money, but they are gonna have very similar habits in terms of how they think about investing and some of the things that they do.

Andrew GiancolaHost

1:42

And so the number one thing I want many people to think through is that many great and successful investors actually automate their investing.

Andrew GiancolaHost

1:49

This is number one.

Andrew GiancolaHost

1:50

Now, this is the single biggest predictor on whether someone is actually gonna get their money into their brokerage account, or get their money into their 401[k], or get their money into their Roth IRA or not, is to automate your money.

Andrew GiancolaHost

2:01

In fact, Vanguard's 2026 How America Saves report, built on twenty-five years of data covering millions of 401[k] p- participants, so just so you know, there's, uh, millions of people in this data, shows that plans with automatic enrollment have a 94% participation rate, while plans that do not has a 64% participation rate.

Andrew GiancolaHost

2:23

That's a 30% difference for people who have 401[k] plans that force them basically to start to automate their money.

Andrew GiancolaHost

2:31

And the cool thing about this is, is automation allows you to not have to worry about it.

Andrew GiancolaHost

2:35

You're not gonna miss this money anymore.

Andrew GiancolaHost

2:37

Instead, you're just gonna automatically contribute money into your account.

Andrew GiancolaHost

2:41

Now, the same report actually shows that more than 70% of auto-enrolled plans now include auto-escalation, which raises the contribution rate at one point every single year.

Andrew GiancolaHost

2:51

Now, this is something I think many investors should consider is being able to increase the amount that you're investing on a yearly basis.

Andrew GiancolaHost

2:58

So let's say, for example, that in year one, you decide, "Okay, I'm gonna invest 15% of my income." In year two, you decide, "I'm gonna invest 17." You're gonna increase it by 2%.

Andrew GiancolaHost

3:08

In year three, you're gonna increase it by 2% again, and 19% of your income is gonna go towards this.

Andrew GiancolaHost

3:13

In year four, 21%, in year five, 23%, in year six, 25%.

Andrew GiancolaHost

3:20

You can see where I'm going here, where you're able to increase the amount that you're investing every single year without really feeling it.

Andrew GiancolaHost

3:27

You're not having to rip the Band-Aid off all at once.

Andrew GiancolaHost

3:29

Instead, you're just slowly turning up the dial, slowly boiling that frog where it's not as painful for people.

Andrew GiancolaHost

3:37

And I think for many of us, trying to make a quick adjustment and trying to adjust all of your finances at once and trying to invest as much as you possibly can when you're not used to it can be a difficult thing to overcome.

Andrew GiancolaHost

3:50

Maybe you do it for a couple of months, but then you're gonna fall backwards and start all over again.

Andrew GiancolaHost

3:54

And so what I want you to do is slowly turn up that dial if this is difficult for you.

Andrew GiancolaHost

3:59

That way, you won't feel it as much.

Andrew GiancolaHost

4:02

And if you do this automatically, it's gonna be so much easier.

Andrew GiancolaHost

4:06

Let me give you another example of this, okay? You pay property taxes probably.

Automate Your Investing1:23 – 6:32

Andrew GiancolaHost

1:23

So when we think about great investors, we want to understand some of the habits that a lot of them have in common.

Andrew GiancolaHost

1:29

So some investors may have very different strategies.

Andrew GiancolaHost

1:32

They may have very different thought processes on how they invest their money, but they are gonna have very similar habits in terms of how they think about investing and some of the things that they do.

Andrew GiancolaHost

1:42

And so the number one thing I want many people to think through is that many great and successful investors actually automate their investing.

Andrew GiancolaHost

1:49

This is number one.

Andrew GiancolaHost

1:50

Now, this is the single biggest predictor on whether someone is actually gonna get their money into their brokerage account, or get their money into their 401[k], or get their money into their Roth IRA or not, is to automate your money.

Andrew GiancolaHost

2:01

In fact, Vanguard's 2026 How America Saves report, built on twenty-five years of data covering millions of 401[k] p- participants, so just so you know, there's, uh, millions of people in this data, shows that plans with automatic enrollment have a 94% participation rate, while plans that do not has a 64% participation rate.

Andrew GiancolaHost

2:23

That's a 30% difference for people who have 401[k] plans that force them basically to start to automate their money.

Andrew GiancolaHost

2:31

And the cool thing about this is, is automation allows you to not have to worry about it.

Andrew GiancolaHost

2:35

You're not gonna miss this money anymore.

Andrew GiancolaHost

2:37

Instead, you're just gonna automatically contribute money into your account.

Andrew GiancolaHost

2:41

Now, the same report actually shows that more than 70% of auto-enrolled plans now include auto-escalation, which raises the contribution rate at one point every single year.

Andrew GiancolaHost

2:51

Now, this is something I think many investors should consider is being able to increase the amount that you're investing on a yearly basis.

Andrew GiancolaHost

2:58

So let's say, for example, that in year one, you decide, "Okay, I'm gonna invest 15% of my income." In year two, you decide, "I'm gonna invest 17." You're gonna increase it by 2%.

Andrew GiancolaHost

3:08

In year three, you're gonna increase it by 2% again, and 19% of your income is gonna go towards this.

Andrew GiancolaHost

3:13

In year four, 21%, in year five, 23%, in year six, 25%.

Andrew GiancolaHost

3:20

You can see where I'm going here, where you're able to increase the amount that you're investing every single year without really feeling it.

Andrew GiancolaHost

3:27

You're not having to rip the Band-Aid off all at once.

Andrew GiancolaHost

3:29

Instead, you're just slowly turning up the dial, slowly boiling that frog where it's not as painful for people.

Andrew GiancolaHost

3:37

And I think for many of us, trying to make a quick adjustment and trying to adjust all of your finances at once and trying to invest as much as you possibly can when you're not used to it can be a difficult thing to overcome.

Andrew GiancolaHost

3:50

Maybe you do it for a couple of months, but then you're gonna fall backwards and start all over again.

Andrew GiancolaHost

3:54

And so what I want you to do is slowly turn up that dial if this is difficult for you.

Andrew GiancolaHost

3:59

That way, you won't feel it as much.

Andrew GiancolaHost

4:02

And if you do this automatically, it's gonna be so much easier.

Andrew GiancolaHost

4:06

Let me give you another example of this, okay? You pay property taxes probably.