Savings and Investing ideas are all around us. This time, the inspiration has come from the fitness enthusiasts at my gym. Today, let us analyse how the diet and workout plans fit well with savings and investing habits.
To start with, I really love to hit the gym, but it’s like a vicious cycle. Only if I go to the gym do I get the motivation to go the next day. If I take a break, I will most likely continue taking breaks. I guess it’s the same for all of us. The bottom line is: Personal fitness is a habit, so is personal finance.
The parallels between investing and exercising are easy to relate to. Let us discuss five such instances today.
Going to the gym will help you cut down on junk food. Yes, that’s right. When you are on a fitness program, you will automatically feel aversion to sugary and junk foods. This method works much more effectively than a resolution to just cut junk foods, because the cause is much more powerful.
Similarly, investing some amount early in the month will drastically cut your expenses. The best way to reduce your expenses is to start an investment plan. When you save/invest first, you quickly realise that you have less money to spend. So, the next time you see a spending opportunity, you will automatically develop the feeling of avoiding it.
Gym goers have a definite goal in mind. It could be either to lose weight or gain strength, but they decide the numbers they want and the timeline to reach them. Gymming without a goal in mind won’t give you the motivation to keep going. This is why most people buy an annual package at the start of the year and drop out in the 2nd or 3rd month.
Similarly, investing will work wonders only if you set a financial goal. Deciding on a goal and working towards it makes the process interesting and intuitive. It is in this pursuit that you gain financial literacy. This also means the initial investment decisions may go wrong, but you gain the acumen to progressively improve them.
People who work out know that reps give them gains, not just intensity. When you work out, the trainer/spotter says, “12 reps x 3 sets.” What they mean is you need to repeat the same exercise 12 times, then 3 more instances. This process teaches you the importance of sticking to a plan. Instead of putting all the weight on and doing a single round, use a manageable weight with multiple repetitions for better results.
Similarly, investing follows a structured plan. The advisor would ask you to follow a particular pathway. These are specifically designed plans to meet your goals. A sample plan would be to invest ₹45,000 every month via Systematic Investment Plan (SIP) for 10 years to build a corpus of ₹1 crore (assuming a 12 per cent ROI). When you have actionable items, you know it is easy to stay focused and stick to the schedule.
Discipline overpowers motivation. Once you hit a fitness goal, such as losing 5 kg, your motivation ends. This is where the discipline takes over, and you continue to hit the gym.
Similarly, investing works when you are disciplined and continue the process, even if your goal has been met. A product like an SIP is proof that discipline will help you stay focused, even when you have lost motivation. This is why many corporate employees continue to build a large corpus through mutual funds, as most of them do not religiously track SIP debits.
To push your limits, you need a spotter. The gym is extremely rewarding if you have a good friend, spotter, or personal trainer. These are the go-to guys who make sure you push your limit for those extra gains. Your physique develops faster with a spotter. The motivation to go to the gym is better, too.
Similarly, investing works best when you have company. It could be a mentor, a colleague, or a financial adviser. If you decided to invest only 20 per cent of your income, these people will ask you to go with 25 per cent or 30 per cent. Most often, these people will ask you to invest your annual bonus completely, too. As long as you trust them and know that what they do is in your personal interest, seek their support.
Going to the gym is immensely rewarding. It improves your mental state as well as your physique. The fact that you are investing in your health gives you immense joy and satisfaction.
Investing is no different. The fact that you are sacrificing a bit now for a better future would always improve your desire to work harder and excel in whatever job you do today.
The writer is a SEBI Registered Investment Adviser (RIA), INA000021757, and author of ‘How to join the top 1% options traders club’.
The opinions expressed in this article are those of the author and do not purport to reflect the opinions or views of THE WEEK
