Have you noticed that the discipline needed to structure a personal finance plan is similar to a fitness plan?
I kind of went the other way from most people, my fitness plan influenced the way I look at personal finance. When I left University in 2003, I had gained an astonishing 60lbs in the 5 years I had been in school! (4 year degree and 1 year of co-operative education). In much the same way someone can gradually gets themselves into significant amounts of debt. Then all of a sudden they find out the money coming in isn’t enough to match the money owed at the end of the month. In my case I had my own eye-opening experience on the fitness side, surprisingly, on an ice rink.
I played competitive hockey for much of my life until going away to school, amounting to four to six days per week from September until April, forcing me to be in pretty good shape during that time. I had fooled myself into believing that I hadn’t lost a step while in school, until my final year when I played in a hockey tournament. The tournament included 3 short games of 30 minutes. At the end of the tournament my body was essentially in shock, I got physically ill that evening. All because I had thought I could do more than I could. It was at this moment, as I was shaking with a fever that I decided I needed to do something to fix this.
I joined a gym, the local YMCA, and went there not really knowing what I should be doing but figured something was better then nothing at all. I then started reading articles on the internet and picked up techniques, workout plans and eventually started losing weight. Six years later and I’m in better shape now then I was in high school.
So how does this apply to personal finance, specifically a plan to retire early?
- Discipline – I can decide to go to Cuba and eat fried cheese and hotdogs and drink too much for a week (like I did on my honeymoon this spring) but the next Monday, I also know I’m going to be back lifting heavy weights and drinking green smoothies. In the same way, a personal finance plan requires discipline – if you don’t stick to your plan, you might as well not have one. Some spending decisions need to be examined in much the same way as fried cheese – the cost of the spending decision (for example a night on the town) has to be addressed somewhere else in my budget if I still plan to be financially free as early as possible.
- Intensity – Last week I did the 300 workout. This is a pretty intense workout, which challenged me to the point that I was physically unable to lift more weight at the end of the workout. This is a benchmark workout that is timed and that I’ll do probably once a month so I can see how I compared to prior months. Intensity in personal finance can be tested in the same manner, whether it’s specific dollars to be saved per month, or debt payments per month. For myself, right now, my goals center on paying off my mortgage as quickly as possible. The goal is specific and will probably test me month to month (especially around Christmas), but at the end of the month I feel a similar level of satisfaction as from being able to do that crazy workout.
- End Goal – My end goal of my fitness plan is to live longer and be in better shape to enjoy life. The end goal of my financial plan is to be financially independent as quickly as possible. These two goals go together as I really don’t want to be reliant on either the health-care system or a job, and both plans are getting me towards achieving my goals.
Right now, I’m in the type of physical shape that I want to be in, I’m hoping that this will transfer over to my financial goals. As Jacob notes in his “Who is extreme” article there is a link between personal finance and fitness. I’m wondering if anyone else has noticed that link or have you noticed other links between your other long-term goals and your retirement goal that you trying to achieve?