Many people, i know, desire to do a marathon at least once. This desire is driven by multiple factors like testing their own fitness or stepping into the fitness regime or due to peer pressure or may be just because everyone else is doing it. Still there are only few who finishes it or finally do it. Procrastinators, who register for their marathon runs but never turn up to collect their kit itself or if they collect the kit, they do not go to the venue. All of them have multiple excuses like, i did not train or i was exhausted at work, i could not sleep or was travelling etc. Adventurers, who register for their marathons with excitement and turn up to race without any practice or serious thought. They either end up quitting in between or getting injured or even if they finish it is a very thrilling but they would not want to come and repeat. Marathoners, are very few people who are serious to achieve this feat and carefully plan & practice for the same. Very few adventurers graduate to the level of marathoners because of the joy of finishing the race is immense. Financial freedom is very much same to the marathon as it needs patience, practice and zeal to reach the destination. Also, it does not matter how much time you take because you run for yourself, it is not a competition but the race to reach your destination. four lessons, one can learn from marathoner to apply for their own financial freedom.
- Start Early: If you are a first timer to a marathon it is highly suggested that you should start practicing early, regular marathoners do it at least 2-3 months in advance. This helps one to train their body & mind for the excruciating run of 42kms+. The more regularly or early you will start better prepared you will be. Similarly, in your financial journey the earlier you start the better it is, because you already know the basics of financial management as well as you learn about your own investment style. One another compelling reason, If you want to build a corpus of 1cr by the age of 45. Starting at age of 25, will mean that you to invest 10k per month @12% to achieve this. While starting at age of 35 means, you will need to invest 43k per month @12% to build the same corpus. Choice is yours.
- Know your pace: In marathons, it is not important that you finish the race, 10-30 mins early/late than others does not matter. The important thing is that you finish the race and reach before stipulated time. You do not try to beat anyone or rush yourself, just make sure you know your limits and still maintain the minimum required pace. If you overdo or stretch yourself, you might end up with injury in last or might have to quit in between. Likewise in financial journey, One should aim to garner the returns he require safely than going for the highest returns yoy. If someone suggest you to directly delve into F&Os (Futures & Options) for 25% annualized gain. Stop there, Start with basics. Check your risk appetite, capacity and time horizon to understand what is your risk profile and then opt for the best returns accordingly. Overtime, You risk profile will improve as your core portfolio becomes larger and your returns will start increasing. Understand this, If you are investing 10k monthly for 20 years, @8% you will be able to garner 58L but small increase of 1% in return, @9% it will be 66L and @10% 75L. So go for incremental gains then sudden jump for returns.
- Eat right: All of us have a different body type and need different kind of nutrition. Some needs to increase their carbs intake while other need to focus on vitamins or balancing their electrolyte etc. No one single diet chart fits all, Similarly in investing it is important to have a investment plan which suits you. For your goals and risk profile what is the right amount of assets from equity, debt, gold, commodities, real estate etc is suggested. Having a right asset allocation is as important as having a balanced diet.
- Start Small: Most of the people fail in finishing marathons because they directly start for marathon with limited practice. 26+ miles is not a small distance most of us who are having active lifestyle walk 8-10k steps daily roughly 4-5miles a day. Imagine that we need to run 6 times of our daily routine in less than 6 hours, This is by no standard an easy task. So one need to increase the daily routine first to step up the stamina, test it in small runs like 5k, 10k and then atleast one half marathon before jumping for full marathon. Likewise in investing, do not wait to invest multiple lacs or Crs to come before starting investment. You start with small investments like 1k or 10k to learn about markets, the volatility, Asset allocation, re-balancing of portfolio to jump into the large scale investing when the money is available and corpus increases slowly.
These 4 lessons from marathoners can real help you in your financial journey. These small steps can help you join the cult of FIRE (Financial Independence & Retire Early) people like marathoners.