Three ways managing money is like a mountain marathon
In July, I had the opportunity to run the聽, a 55-kilometer (34-mile) trail run along the mountain ridges of the Continental Divide near Salmon, Idaho. OK, 鈥渞un鈥� might be too generous a term to describe what I did. Jogging, hiking, walking, stumbling, and begging for mercy are all a little closer to the truth.
After limping across the finish line, soaking in聽聽and sleeping like a log, I had a chance to reflect on the experience. As a financial advisor, I found that what I鈥檇 just gone through held some powerful lessons about managing money.
No pain, no gain
Watching a聽聽of the race course last winter 鈥� a video with calming music and breathtaking scenery 鈥擨 thought it looked like a great thing to do. Having done it, and having had the chance to recover for a while, I know for sure that it was. While I was doing it, though, it was painful. Like, how-the-heck-did-I-get-into-this-mess painful. Going through the pain was what I had to do to make progress.
Ever had to reallocate your portfolio in the middle of market hysteria? Buy stocks when they are down 40%? Buy bonds when stocks are up 40%? It can make you a little ill to stick to your plan in times like that, but that discipline is what makes you successful.
How about going through the painstaking process of聽聽exactly how much you spend? Asking your financial planner how much his management fee plus the underlying fund fees are costing you? Asking your insurance agent about the actual costs of that whiz-bang annuity he鈥檚 pushing?
These can be difficult tasks and conversations. If you鈥檝e done them and seen the payoff, however, you understand that doing hard things financially is often good for you and gets you where you want to be.
Don鈥檛 worry about other people
When I crossed the finish line almost 13陆 hours after I started, I felt so relieved and so accomplished. What I didn鈥檛 know at the time was that I was the slowest guy to finish the course that day. Dead last. But I didn鈥檛 care. While some people were racing other people, I was merely racing myself, trying to finish the course before it finished me.
Comparing ourselves to others can sink us financially. In the investment world, we call this the same thing you鈥檇 call it anywhere else: unproductive.
Say you鈥檝e got a friend who鈥檚 invested in a miracle mutual fund that鈥檚 up so much higher than all the others. By the time you actually buy in, it鈥檚 probably just as likely that it鈥檚 that fund鈥檚 turn to do worse than the rest. Same thing with that hot tech stock. Just because everyone else is borrowing against their house for money to invest in the market doesn鈥檛 make it the right thing for you to do. Understand聽your聽risks, make聽your聽decisions, stick toyour聽plan and experience聽your听蝉耻肠肠别蝉蝉.
Don鈥檛 quit, no matter how bad it gets
At the toughest point of the race, I was in a the middle of a boulder field that was several miles long, on a ridge at 10,000 feet. What seemed like (but clearly weren鈥檛) hurricane-force winds and rain were blowing from the Idaho side, trying to push me over the 800-foot cliff on my right down into Montana (which I鈥檝e always wanted to visit, but didn鈥檛 seem so inviting at that particular moment).
My legs were jelly, and I was moving like my grandpa did in his mid-70s. I felt like quitting, but realized that if I did, I would still have to walk across the rest of those dang rocks to get off the mountain. I thought to myself, 鈥淗ow do I get out of this mess?鈥�
Maybe you鈥檝e found yourself at a similar point financially. I know I have. For me, it was waking up to the amount of聽聽I had. 鈥淎t what point did I think it would be a good idea to use these cards like this?鈥� For you, maybe it was a job that didn鈥檛 work out. Or you thought there was no way that real estate investment could be bad. Or you were sure you could double your retirement account in that IPO.
Once you鈥檙e there, though, it doesn鈥檛 do any good to quit. You aren鈥檛 the only one who has blown it financially. So lastly, remember that, like me on the ridge, you just have to keep putting one foot in front of the other, get through the position you put yourself in, and learn not to be there again without being better prepared.
But don鈥檛 sweat it too much 鈥� doing what is right financially can hurt, but it鈥檚 a beautiful thing. My run was worth every step, because by sticking to my plan, I found what I was looking for in the first place.
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