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How Training for a Marathon is like Managing your Finances: Lesson 9Submitted by Personal Money Planning on March 24th, 2019
By Gary Silverman, CFP®
Last week we talked about my longest training run: The 20 miles of pain. (OK, OK, the pain only was during the last 6 miles...) Our lesson: some set-backs create problems that cannot be overcome.
In the case of running, the setback was my energy level. I started out way too fast. I think no matter what I did that morning there was going to be pain, but my early mistake caused me to fatigue earlier in the run, which damaged my form and added to the pain.
In the case of money, if you spend too fast in your early retirement years, you will have a tough time going the distance.
Another lesson: I started out too fast because I was running with a friend who had a very different running need that day. Not only is he a stronger and faster runner than I, his finish line was much closer than mine. Keeping up with him for well over 10 miles might seem like an accomplishment, but because my goal was further down the road, it became a problem instead.
In life, I call this the “Keeping up with the Joneses Syndrome.” You see that “everyone” has a later model car, a nicer home, or better clothes than you. Their social media is filled with restaurant check-ins. You might even work at the same job as these “Joneses.” Certainly, if they can afford to live that way, so can you.
The thing is, you don’t know if they can afford to live that way. Most people are not saving enough for retirement. Sure, you could opt not to save 10-15% of your income to get the nicer…whatever. Is it worth it?
You could choose to stop trying to pay off your mortgage in 10 years and be like your friend who is borrowing against their equity in order to take a nice vacation. But if you stayed the course, in 10 years, their vacation would be a memory, and your home would be paid off.
Another example: What sounds better? Limited debt, a good-sized emergency fund, and an older paid-off car, or sky-high debt and a shiny new truck in which you owe more than it’s worth?
You may see your friends enjoying the Jones’ lifestyle now, but that’s all just on the surface; they may not have anything saved for their future.
Lesson: I need to run my race, not my friend’s. You need to worry about your fiscal health, not your friends’ lifestyles.
Back to my training with lesson learned, I entered what is called a taper period where my runs became shorter. This gives time for everything to heal. It was now less than two weeks until the marathon.
Summer lasted a long time in 2018. But winter wouldn’t stay away for long. The weather forecast was starting to look a little bleak.
I might be running my first marathon in freezing rain.
Gary Silverman, CFP® is the founder of Personal Money Planning, LLC, a Wichita Falls retirement planning and investment management firm and author of Real World Investing