Five Personal Finance Lessons I Learned From A 10 Km Road Race

I had the pleasure of running a 1/2-marathon relay race with a friend yesterday. I expected to have a good time, get a medal and celebrate afterwards, but what I didn't expect were personal finance lessons along the way.

The medal's a nice perk, but it's how you get there that counts.

Given it was my first time attending this event, I got to the race nice and early. I didn't want to deal with the stress of finding parking and dealing with other logistical considerations while under time pressure in an unfamiliar setting. As a result, I was relaxed and more contemplative than usual before and during the run--and more observant.

3...2...1...GO!

I was ready. I started the run listening to one of my favourite podcasts but the words faded into the background as I started to focus on my cadence and on the other runners. I had never observed other runners like this before. It was almost like watching a movie.

Here's what I noticed and why it matters.

1. Running is an individual endeavour - just like personal finance.

There were many types of runners: short, tall, thin, fat, fast, slow, amateurs, seasoned athletes, locals and foreigners. Their reasons for competing were just as varied as they were and, as long as it gets them across the finish line, does it matter? The reasons are what drive us, not the goal itself. Without a reason for doing something, the goal can seem...meaningless.

You want to save a million dollars? You want to be financially independent? You want to retire early? WHY? Figure out the reasons you desire what you desire. It will increase your chances of sticking to it when times are tough and ultimately crossing the finish line to get to the life you want.

2. Having all the bells and whistles do not ensure success. Desire does.

You can't predict a person's running success by their running gear. I saw everything from a "Nike everything" gym bunny to a runner in a ratty old t-shirt and shorts...and no shoes! Consumerism has taught us that we need to be prepared with all the latest and greatest gadgets to be able to properly participate in or accomplish an activity or goal. 

We often apply this to personal finance. If a PF strategy does not sound complicated or sexy enough, it must not be good enough. Just like expensive gear, we feel we need to rely on expensive actively managed funds, commission-based advisors and up-to-the-minute stock information.

So why is it that the person who just focuses on perfecting the activity itself excels in the end? What produces results is regular attention, habit and desire--nothing fancy about that. The fancy people who want to "look the part" don't finish ahead because they are externally focused. They get their validation from others. The folks who just care about the pursuit itself are internally focused and they fuel themselves. They want the result...and they get it.

3. Finding a steady pace brings with it comfort that you will finish.

At the start of the race, many runners were in a rush to get ahead. They were pushing the pace in a way that, it was obvious, was not sustainable. After a few miles, some folks were passing me, then slowing down, then passing me in a rush again, then slowing down, like a real game of cat and mouse. These folks were not listening to their bodies to determine the rhythm/cadence they could maintain for the duration of the race. They were overshooting and losing steam. 

The same is true for personal finance. Some folks come out of the gate in a rush, trying to save at a rate that is both unrealistic and unsustainable. They have a level of focus and energy that soon dissipates and they feel defeated because the benchmark they have set for themselves is too high. Anything less by comparison feels like a failure. Other folks have unpredictable bouts of saving and spending that may or may not work over time. The successful individuals set a sustainable and automatic savings "pace" that leaves them relatively comfortable to enjoy the journey. They know they will get there and when.

4. Grit matters more than natural ability.

Some runners are very comfortable running and don't really train for an event. They just show up and get it done. Commendable, but not extraordinary. Others have no natural ability but they want it badly and prepare for months in advance to ensure the event goes well for them, despite not being natural-born runners. Who do you think values their accomplishment more?

When it comes to saving, who values saving more? Someone who doesn't feel the pinch of putting money aside or someone who makes a regular short-term sacrifice for a longer term goal. In all aspects of life, doing hard things feels good and it increases self-confidence as we pursue other endeavours. It makes us more likely to success at anything we do.

5. The tortoise may be slower than the hare but both finished the race.

No matter what a runner's style, attire and attitude might be, all the runners who sign up finish the race. Fancy or not, naturally able or not, happy or sad, everyone who stays the course crosses the finish line. But, the most important aspect of the race seems to be the how, not the what.

I intend to keep focusing on how I run just a much as running itself (the race, the distance, my finish time). Over the "long run", focusing on what matters most will get me where I want to go in better shape and no worse for wear.

How about you? How are you setting and achieving your PF goals? Any other lessons you can think of in achieving meaningful, life-enhancing goals?