Running an investing have a lot of things in common. Both require dedication, and the returns compound!
For a better idea of what I mean, look at this stock price below:
Wow, this stock looks like it gained more than 4 times it’s value in just 4 months. That is a stock any investor would be happy with.
This is not a stock! This is my chart of how much I ran from January to April of 2020!
Here is the full chart:
The data on the Y-axis was not a stock price, but my distance ran in miles!
I started running in January of 2020 with a goal of becoming more fit. Before that time, my longest run was about 3 miles. When I started running again in January I could barely run a single mile.
I was so winded on my first few jogs that I would need to stop every half mile to catch my breathe. Even though it was hard, I kept at it 4 times a week, making a short loop around my neighbor hood.
If I missed a day, or wasn’t particularly into my run that day, I let myself have the day off with the promise that I would start again the next day.
Investing is a marathon, not a sprint.
I learned that I could run farther if I ran at a slower pace. By running farther I increased my endurance, this eventually made it easier for me to run faster. It may seem counterintuitive, but running slower can make you a better runner.
The same is true for investing! Investing is not about how fast you reach the goal, but being able to safely get yourself across the finish-line.
Is an investing plan worth it if it could also leave you broke in a few years? Maybe not.
Injury prevention for runners means running at a comfortable pace, injury prevention for investors means sticking to goals and being diversified enough to weather any market turmoil.
Gain are compounding.
I felt soooo slow on my first run. After a week of running I felt like I was getting nowhere. It wasn’t until I looked back a month into running that I could see all the progress I had made.
There is a 10% rule for runners. This rule states that runners should only increase their weekly mileage by no more than 10% a week. Going from running 1 mile to 1.10 miles in a week may not seem like a lot, but let’s see what that increase looks like after 3 months (14 weeks).
By running increasing your daily mileage by 10% a week, you would be running a 5k every day in just 3 months! This is much more achievable than if you set out on your first run hoping to run a 5k.
Investing is ver similar earning consistent returns of 8% a year my sound unappealing at first, but the gains compound adding up to a lot of money overtime!
This is probably why so many successful investors and business people are known for starting their day with a jog or a trip to the gym, they know that small changes now add up to big changes in the future!
If you get knocked down, pick yourself back up.
In May of 2020, the Coronavirus was in full swing and I decided to take a few weeks off of running. In truth, I had really just lost my motivation.
By the time I was ready to start running again, the task seemed daunting. I was afraid I would have lost all my previous gains and would need to start at square one.
Well, my endurance did take a big hit, but I was actually able to ramp up my running even faster than before! After a few weeks of getting back out there, I started to surpass my previous records.
Here is the full graph of my running progress from January through June.
You can see in the graph where I had a bumpy start in mid-April, my running was really inconsistent. I felt guilty that I had taken a break off of running in the first place.
By May, I decided to recommit fully. Although it was tough, my mid June I had my longest run yet! I ran 11.5 miles in one day!
Here is the investing lesson: There are good days and bad days in the stock market , just like in life. The important part is that you stick to a plan and keep at it! Investing requires mental fortitude. You have to have a long term goal in mind and keep at it!
Everyone has a different tolerance for risk.
Online running forums are full of people arguing whether it’s better to run faster for shorter periods of time or slower for longer periods of time. The right answer? It depends on YOU.
So people will get bored running for hours on end and would do better as a sprinter. Other runners are more prone to injury and should run slower to reduce the strain on the body. In the end, no one can tell you the best way to run.
The same is true for finance! No two people invest the same because no two people have the same goals and tolerance for risk. You have to choose an investment plan that keeps you interested and you can stick to long term.
For me personally, I am risk adverse in running and investing. I run slowly and invest safely. You may be completely different and that is okay!