Preparing for Life's Race
Although April’s weather may not have felt like spring, the spring season is here and it feels great. For our Philadelphia area clients, the 2018 Blue Cross Broad Street Run was this past weekend in the City of Brotherly Love. We thought it would be fitting to write a blog on the similarities between Financial Planning and running a race. Below we will break down a few aspects of running a race and how they relate to financial planning.
Don’t get overwhelmed. It’s easy to approach the idea of running down Broad Street and instantly rule it out, but with the proper training and focus you can confidently achieve success. The same goes with Financial Planning. If you need to save for retirement, fund your children’s college educations, or care for your parents, it can paint a daunting picture and be very overwhelming. Set realistic goals for yourself. Having a plan and knowing what you need to do to be successful will not only help you prepare, but also give you the confidence to know you can achieve your goals.
Hit your Target
If you planned to save a certain amount each year to fund your goals, then what mechanisms do you have in place to promote your success? If inconsistent, what can you do differently to ensure you are putting enough away? Often the simplest way to guarantee saving involves automating the saving process by setting up automatic contributions. Whether it be contributing through payroll to a 401(k) or setting up a recurring transfer from your checking account to your brokerage account, automation is a major factor in successful saving. The same goes for running a marathon. Sprinting out of the gate is usually not the best strategy, as you will lose momentum and not keep a steady pace. The goal is to mirror your training, be consistent, and stick to the plan going into the race.
There may be times in a long race where you hit a wall, panic, and start doubting yourself. At that time you need to relax, remember your training, and shift your focus back to your preparation, knowing that you can do this.
When volatility hits and you see your investment portfolio fluctuate, don’t panic, remain disciplined, and stick with the plan. Here at Thrive we let the iThrive Planning Process be the key driver in building plans, keeping our focus on the things we can control: How much we save, how much we spend, the timing around major goals, how much (if anything) we want to leave behind, and how our portfolio is allocated.
As Philadelphia 76ers basketball star Joel Embiid would say, “Trust the Process”
Don’t let emotions get in the way
You are in this race for yourself and shouldn’t worry about what everyone else is doing. There are many strategies to running a race, but some may not be the best for you. Comparatively speaking, it’s easy to be distracted by outside noise when talking finances with friends, family, and colleagues. You’ll hear about how “they made how much from which stock” or how “this strategy is what everyone should be doing”.
None of that matters and shouldn’t deviate you from your path and your goals. That’s why we stress planning as such an important factor in knowing that staying on your path will help you achieve your Vision.
Fulfillment from athletic goals goes hand in hand with fulfillment from financial goals, whether it be finishing the Broad Street Run or accomplishing a milestone in your financial plan. In planning, we want to help you reach financial freedom and have the ability to do what you want with your life. There may be hard times, and there may be sacrifices, but having a path and sticking with it will help you achieve your goals and give you peace of mind.
Everyone’s plan (or race) is different, but preparation, discipline, and achievement are key factors to being successful.