Those of you who are following me on Facebook know that I recently ran a full marathon. Only a couple of days before I decided to run, and only on the run day did I decide to run 42.2 km.
Running a Marathon has a lot of advantages. It allows you to think – and really there is nothing else that you can do for that time that you are on your feet. It could be anything from 5 hrs to 8hrs.
As is wont, I was thinking of the similarity between Investing for Retirement and Running a Marathon.
1. Get Started!– If I had kept wondering whether I would be able to run a marathon, or finish in a particular time frame, I would still be wondering. So like all good, big things, the MOST important step is to START.
2. Look at what is near you: Life is not about worrying how much money you require at retirement. How will a 23 year old know how much he needs for retirement? Similarly when you are running a long race – run the first few kilometers strongly AND SLOWLY, you can worry about speed later. After all like Warren Buffet says ‘To be there FIRST, you have to be FIRST THERE!!
3. The immediate view is clear and the future is hazy: ‘How do you eat an elephant?’ Simple! One mouthful at a time! Similarly take the first few steps, and start with a prayer.
4. Nice planning, a good coach, support vehicles and a good motivating crew: Well sorry if I am making it sound like a 222 km Himalayan Ultra, but 42 km also needs planning. The support vehicle, the crew, etc. have to help and help with some element of enthusiasm. The people near you have to help you / support you when you make bad decisions in investing too. YOU will make mistakes, but learn to stop, correct course and keep running.
5. Stopping is necessary: It is almost impossible for a normal person not to take walk breaks. You also HAVE to take walk breaks diligently EVEN when you do not need so that you can keep running during your 40th km. Similarly in investing even if you LOVE one asset class, you MUST have the diligence to do asset allocation. Put a lot of money in equities, but for emergencies, and expenses which are 2-3 years away, the money has to be available in debt funds with low volatility.
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