I did the Vineman Half Ironman this past weekend in northern California. It’s a beautiful race that takes you through the vineyards outside Napa during a 1.2 mile swim, 56 mile bike and 13.1 mile run. I’d never performed in a long distance event of any kind and couldn’t bike 10 miles or run 5 miles a year ago (well, I could, but not fast). So this was a big challenge for me. It required a huge amount of preparation, diligence and mental/physical fortitude.
I did just okay with a time of 6 hours and 9 minutes. Not bad for a first half IM, but not great either. But the result is not really what I enjoyed so much about the race. Rather, I enjoyed the process of preparation, planning and the many lessons I learned along the way. And after I finished I realized that this race really translated to investing in a perfect way. Here’s what I learned:
- Process, process, process! The most important thing was preparation. Just like investing, planning for an endurance race is about establishing a process. You have to create a plan and stick with it. Last December I created a plan for every workout over the course of the next 7 months and I followed it almost perfectly. Portfolio construction is a process. You have to create a plan and fuel your portfolio over time just like you fuel your body during an endurance race. And you have to establish a process that you can stick with over time.
- Establish realistic goals. I knew going into the race that I was an okay swimmer, okay biker and bad runner. So I had to set realistic goals. The biggest threat to finishing the race was setting a goal in some segment that was unrealistic. If I’d tried to bike a 2:30 (which I easily could have) I would have burned my legs out on the run. You have to establish realistic goals. The same goes for investing. Too many people implement a counter-productive strategy by setting unrealistic goals.
- Don’t overpay for performance. I did some silly things during the course of my training that didn’t really help. I bought expensive bike wheels, expensive helmets, a fancy wetsuit and tons of other gear. In the end I probably overpaid in fees for things that didn’t contribute to my performance much. In the investment world we often assume that strategies or managers with the fancy bells and whistles will automatically translate to better performance. It’s just not always true.
- Life is a series of events inside a longer race. The most valuable lesson was realizing that life is just a series of events inside a longer event. Just like our financial lives, life happens all the time. We don’t start life at 25 and end at 65. Life happens all the time. And if you’re not prepared for the inevitable turbulence along the way then you’ll experience hardships which actually make your financial life more difficult than is necessary.
- Hard work pays off. Few things will test your mental and physical fortitude like a serious endurance race. But if you put in the hours, learn from those around you and work really hard the effort pays off in the end.
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.