It’s probably never occurred to most people that there is a link between personal finance and physical fitness, even though we all accept that health and wealth are a good place to start in the quest for happiness and freedom. But when you think about it, the personality traits that make somebody financially successful are the very ones that lead to a healthy lifestyle.
Avoiding impulse purchases that give us a short-term gratification, but no long-term benefit takes a similar mindset to going to the gym or for a brisk walk rather than sitting in front of the TV with a pizza. If you’ve ever hired a personal trainer or used a financial planner, compare the initial questions that both will ask:
· Where are you now?
· Where do you want to be in the future?
· What time-frame do you want to set to achieve your goals?
· What are you willing/able to do to get there?
The personal trainer is of course referring to your current physical condition and fitness goals, whereas the financial planner is interested in your values, aspirations for the future, current financial situation and any resources available to achieve those aspirations.
Baseball player Mickey Mantle once said: “If I’d known I was going to live this long I would have taken better care of myself!” and it can be sobering to hear when people reach retirement and say a similar thing about their finances. So, what are the common traits necessary to achieve our financial and physical fitness goals?
1. Desire to change – Before we embark on a journey to improve our physical or financial health, we need to have the real desire to achieve our goal. Without the desire to improve either situation we will fail very quickly. But if we truly want to better our physical health or to achieve financial independence, then all the obstacles along the way will be just that; obstacles to be overcome in the pursuit of what we truly want.
2. Knowledge - If we wanted to achieve a financial goal of retiring by a certain age, we would first need to identify how much capital/income would be required. In turn we’d need an idea of what we can realistically commit towards this goal in terms of regular saving. Similarly, if we wanted to lose 10kg then we would need an idea of how long it will take to do this safely and the best method for us. In both cases to be successful we need knowledge and clarity of the ultimate goal, as well as where we’re starting from.
3. Planning and targeting – Whether we want to achieve personal fitness, or financial independence, it’s vital to have a plan. We also need a firm idea of what the target is and by when. The old adage “If you fail to plan you plan to fail” couldn’t be more true for both financial and physical health. The plan is the map of where we want to go, and the target is the end destination in both situations. In both physical fitness and personal finance there will always be divergences or setbacks along the way, but a clear plan and an end-game which is important and realistic will allow us to get back on track when we need to.
4. Time and patience – The biggest enemy of any fitness regime or financial plan is lack of patience. It’s unrealistic to expect that we can permanently lose 10kg in two weeks or go from zero exercise to running marathons without time and practice. Likewise, when we start investing for a future goal we need to understand and accept that time is more important than timing in the financial markets. A long-term financial plan is just that – long term. We also need to have realistic expectations of how long it will take to achieve either a physical fitness or financial target.
5. Self discipline – Once we have a plan in place it will take determination to stick to it. We’ll need to keep our mind on the benefits of achieving our goal. But, if the goal is important enough to us, we can do it. To quote Elon Musk: “When something is important enough, you do it even if the odds are not in your favour”. It takes a great deal of self discipline to cut down on our favourite unhealthy foods. It also takes mental strength to stop buying stuff that we really don’t need. But once we realise that both only provide instant and short-term gratification it becomes a lot easier to avoid those temptations and to focus on the long-term and lasting benefit of our personal fitness or financial goal.
6. Both get easier with time – Like the compounding effect of investment returns, personal fitness is a cumulative condition. Once we are in a healthy physical condition it becomes a pleasure rather than a chore to go for a bike ride, a run or to hike up a mountain.