What Does Your Gym Routine Say About How You Invest
This time last year I became a member of a very nice gym which had all the benefits that would make you want to spend all your time there. My rationale for splashing a little bit of cash this time round was to do anything that would help me achieve my goal of exercising three times a week to improve my productivity, health and fitness.
For the first two months my routine seemed to work and I exercised regularly maintaining my goal of exercising three times a week. I could clearly see a difference in my level of fitness and also the boost to my mental wellbeing. However the Christmas period came and went along with that my routine and enthusiasm for turning up to the gym.
I recently went back for a session for the first time in six months (yes I was locked into a one year contract and was paying my monthly fees all along). In that one visit I was trying to work extra hard to catch up on the missed session and ended up with a mild sprain.
Hang on, what does all this exercising, fitness and quest to be a gym king have to do with finance and investing? Well two important things actually and I’ll set them out below.
Gym Routine Meets Investing #1
My gym routine was very erratic and as such the results were not consistent. However, it pays to treat your investing routine differently to my gym routine. It is extremely important to adopt a regular investing habit. It’s so difficult to predict price of an investment with great certainty. So to avoid regretting when you invested, the best thing is to invest regularly which means some times you buy “at low cost” and other times it’s “expensive”. If you keep repeating this process regularly then over time you smooth out your average cost of investing. This is one of the three powerful reasons for regular investing.
Gym Routine Meets Investing #2
I missed gym sessions completely for a period of six months as I prioritised other things above my health (we do that sometimes…). However, when I finally went back I was trying to catch up in a short time period and ended up with a sprain. With investing it pays to start early and keep it consistent. Even if you start small start early. Which is why I highly advocate investing for kids from an early age so that compounding over the long term will help generate wealth.
This also applies to millennials and others alike who put off contributing into a pension until they have bought a house or other things that are placed as higher priorities. Investing in a pension is then revisited in their forties where in attempt to catch up on missed investing more risk is taken in the portfolio in the hope of achieving high returns. Just as I sprained myself doing this in the gym, you could be exposing your investments to a lot of risk especially when you have less time for it to recover. As a gatekeeper (Trustee) of a pension scheme I see little engagement or investing from members that have just started their career. Their plan is to start investing later on after clearing student loan (which is actually a tax and not a loan) and buy a house. However, there is never a good time as in the future other things may be competing for financial attention.
So definitely don’t let your investment routine end up like my gym routine! Start investing early, start now, start small and keep it regular regardless of markets. Feeling ready? Then check out these six steps before your dive in . If you really do not know where to start then come have a money chat with me.