What long-distance running can teach us about wealth creation

The first two kilometres of any long run are the hardest to get through. What’s amazing is that the last two are often the most energetic and fastest; this happens with a 10 km run, 15 km run or 21 km run or whatever your long distance is. However, this is the final result that the lap statistics show you. What you cannot see is that one has to sleep early, eat well, be hydrated and train regularly along with adequate stretching, to ensure that the last few kilometres of a long run are indeed stronger than the first.

Investing is a lot like a long run. Long-distance running is often equated with a desire to run marathons, but regardless of whether you ever run a 42 km marathon or not, regular long-distance running can elevate for health tremendously.

Regular and disciplined investing, similarly, elevates your ability to build long-term wealth, tremendously. Much like while preparing for a marathon, the focus has to be on discipline and a steady progress rather than trying to sprint ahead. Sprints are good if you are trying to condition the heart to faster speeds, but sprinting for the sake of speed during a marathon can result in your body getting too tired and unable to finish the race itself.

Keeping the mental focus on

Long runs are as much about physical fitness as they are about mental fitness. The mind wanders when on the road, running relentlessly towards a self-imposed goal. Even before the run starts, your wavering mental strength will nudge you to go back to sleep when that alarm clock buzzes before the break of dawn. At such times, it helps to quieten the mind and take that first step. Block out that persistent voice inside your head, use all your will power to climb out of bed, change into your running clothes, step out and start. The first 10 minutes is a killer even on good days, but the adrenalin rush that picks up somewhere after the first half of the run makes the whole ordeal well worth it. You keep visualising this feeling of elation and running high each time you plan to step out and soon you are a regular long-distance runner. The benefits of that are multi-fold; your heart is healthier, you are more energetic, you start to think clearly and you make friends with others who enjoy the same sport as you.

Long-term investing, too, is often a game of mind over matter. You have to keep repeating the simple stuff at a regular frequency to achieve the benefits of compounding. You needn’t think about investing large sums, just take small amounts but invest regularly and have the discipline of topping it up when income increases. Your mind does get distracted from time to time and seek more exciting ways to earn investment return; trying to sprint ahead. However, when you think emotionally about making more money you end up taking higher risks and that may lead to needless losses too. At the start of the journey, it feels hard to save and keep on increasing your savings when all you want to do is buy that next branded bag or watch. But, the task is not as hard as you may think. Keep your financial objective in sight and soon you will see that the small sums you are putting aside as savings and investing diligently are earning returns that compound over time, increasing that pile and creating wealth. The longer you continue doing the simple stuff, the more you benefit from compounding. You repeat it regularly and it becomes a habit. Soon you will transform into a regular and disciplined investor rather than an impulsive spender or even a reckless investor chasing high returns.

Shutting out the noise

Long-distance running ultimately requires you to run on the road. That’s not an easy task. There is vehicular traffic, stray animals, early morning garbage smells, temple bells and a whole lot of other distractions. Runners must monitor their surroundings carefully while focusing on their run momentum and form. If the mind is too distracted, falling and getting injured is a risk, one you don’t want to experience. Thus, it’s important to focus and simply cut out the noise.

In long-term investing too, there will be daily distractions. Global news, local views and seemingly poor earnings quarters, but you must stay the course and focus on the quality of your portfolio rather than the noise around it. Good quality portfolios can generate positive returns for years and compound this into a pool of wealth for you. So, keep yourself focused on the end goal and the chosen path of slow and steady despite everything else that’s happening around you. Undoubtedly, just like with long-distance running, you have to do the work of being prepared. Equip yourself with the right knowledge and awareness required to be a long-term investor. Understand the asset well and spend time understanding the risks well before you begin the journey. This is essential if you want to minimise the noise and move steadily towards the goal.

In long-distance running, it’s not the fastest pace that matters most, rather the pace at which you can run the furthest is what counts. Your long-term investments don’t need to compound quickly, they need to go the distance and continue to compound for a long time. Remember to do the simple stuff, be regular, disciplined and stay invested for the long run, the outcome will follow.