Mumbai Marathon and Financial Fitness!
Watching Mumbaikars run was a fun last week. After all they were not running as usual. They were participating in Mumbai Marathon, and not running for 8:02 CST bound fast train. The usual pain on the face was replaced by smiles and that made me think. The goal matters and sometimes that make the journey towards the goal more a fun, than pain.
Running is possibly the easiest type of exercise, next to walking. It does not require much of skills. Running a marathon, too, is possible if you know some basic rules about keeping your 'fit' body hydrated throughout the 42 km run. If you are physically fit and can train yourself well for few months, marathon is not akin to climbing Mt. Everest. Personal financial fitness is like running a marathon.
Achieving financial fitness to reach your financial goals and completing marathon are two end results, and you need the right plan in both cases. Get the plan right and stick to it, and results will follow. A well written financial plan can help you take care of your financial investments and liabilities as you move on in your life. Just implement it and you are on the track, in the right direction. Marathon too is all about putting your training of several months in practice. For months marathoners run and train their hearts, lungs and legs to bear with the grind.
Marathoners train themselves for extended period of time, with consistency. If you run for a week and take a break for a month, then you should not expect to deliver what you learn in first week. Breaks and delays destroy the war chest you can build. Financial fitness too cannot withstand delays. More procrastination, less likely you achieve your financial goals. Also the financial plan has to be a well-rounded 360 degree activity. You cannot simply keep all your money in saving bank account or make one year fixed deposits in bank and expect great retirement. Invest across asset classes, just like a marathoners would practice climbs along with plains and run in the 'cool' mornings and in the scorching sun too.
Many winners of the marathon has pointed out the fact that it is less of a physical activity, but more a mental one. It requires overcoming the desire to spend half an hour in the bed in a winter morning. It requires hitting the track every day, irrespective of the season. It requires overcoming the peer pressure – you have to choose between late night parties and going early to bed – after all you have to hit the track early morning every day. In a country like India, 'why run marathon? Why not cricket?' can be a question that comes your way. Overcoming the behavioural issues is a task for most individuals hitting on the track of financial fitness. Trendy investments lure them away from financial plans. One bad year in equities, and investors fall for bonds. They choose to ignore their financial plan asking for allocation to equities. To become financially fit you have to keep doing the things prescribed by your financial plan and not what appears to be the latest 'in' thing.
Marathon is not a sprint, so does the journey towards achieving your financial goals. There are no short cuts to success in marathon. You have to keep running. Similarly do not go for 'get rich quick schemes' while achieving your financial goals. Time tested asset allocation based investments deliver superior returns. Also keep reviewing them at regular intervals. You should look at your portfolio valuation, outstanding loans, CIBIL credit scores at regular intervals to ensure that you remain on track. It is akin to a marathoner timing his each run.
Looking at all these things one can simply say that running a marathon is a possible task for most of us, and so does the case of achieving financial goals. So when are you hitting the roads?
The writer is a Co-founder & Director at www.creditvidya.com