Thursday, April 30, 2015

Staying Financially Fit, '365-days-a-year'

You'll notice 2 types of people in the gym.

The first mystically appears 3 times a year - January (when they make their new year resolutions), June (when they realize they've put on some weight) and December (when they valiantly attempt to bridge the gap between their current state and what they wrote down in January). 

Then there's the second type - those who work out 3 times a week. This bunch may appear a little fanatical, showing up consistently every Monday, Wednesday and Friday. Every time you see them, you'll hardly notice any difference. That's because they are already fit and any incremental growth that happens is barely noticeable over the short term.

Recently, I've been able to hit the gym much more often now due to my current work arrangements and I've been drawing a lot of parallels between fitness and money management.

Here are some similarities that I've noticed so far:

1) Making An Effort To Show Up 

This is something we have to do on our own. Motivation has to come from the inside - a burning desire to show up and believe that change/progress is possible.

Waking up in the morning to lift some weights is difficult. But if you can wake up everyday to show up at the office/rat cage, then you can do the same with fitness and your finances - it's about making an effort to show up.

As always, I'll say that this is 50% of the battle won. The other points below make up the remaining 50%.

2) Consistency 

The main difference between the first and second group of gym-goers is that the second is high on the consistency spectrum. Showing up is great, but showing up every single time is what separates the wheat from the chaff. In fitness, it's about consistently showing up at the gym - on good days and bad.

Our finances do not differ much. It's not about spending your paycheck every month and only saving the bonuses. Consistency is about setting a set of rules and executing it every single time. 

Save a certain percentage (aim for 50%) of your paycheck every month. On the months of your bonuses, you technically save 150% of your paycheck, or more.

After all, bonuses are only bonuses if you don't spend them.

Compound them instead.

3) Cheating & Mistakes

When we perform a dumbbell curl, we can choose to do slow, well composed repetitions, focusing on the form of each curl. Through this, we'll feel the burn in our biceps.

Alternatively, we can swing our arms to get the weights up. That's cheating and the rules of the system is fair in a way that the only person we're really cheating is ourselves.

I won't lie, I've done those arm-swinging-bicep-curls on bad days too.

Finances are the same - I've been there, made some stupid money mistakes, spent on ridiculous objects and heck, I've even lost money trying to make a quick buck or two.

Here's the thing, when you try to cheat the system, the only person you're cheating is yourself.

4) Stagnation & Hitting Plateaus

Over the past year or so, I've not been making the progress that I'd like to see with regards to my physical fitness. Despite showing up consistently for many years, it's safe to say that I've finally hit a plateau.

Money-wise, it feels as if I've hit a plateau as well.

It's not entirely a bad thing. What it means is that you have advanced to a level where any further progress requires much greater effort.

I think it's better to own a dividend-paying stock that plateaued at $50 than a 50-dollar stock that declines in value every year.

But if you keep showing up, you'll find a way to break through these plateaus.

5) Experimenting With Varying Intensity 

"Insanity is doing the same thing everyday and expecting a different result"

Ughh, I've heard this quote, ad nauseam. But I'm not going to deny the truth that's in it.

Honestly, I don't know why the rules of the system were designed this way. But if you performed a 100lb bench press every week for 3 years, you will gain great results within the first three months. And then, for the next 2 years and 9 months, you're going to remain the same.

You have to step up your game and mix things up a little. Throw in some push ups (incline, decline, alternating, with claps, etc.), triceps extensions, pulldowns, or simply increase the weight and resistance.

Now, I'm not suggesting that you keep changing your investment strategy every month or so. But we can always find ways to increase our income stream. There are more ways to increase the sources of our income.

Side-hustling, E-Bay, freelance jobs, side businesses. The list goes on...

6) Embracing It As A Lifestyle

Not goals.

When we have a goal-oriented mindset, we tend to achieve them. That's great, but that's a problem as well. Once we achieve certain goals that we set for ourselves, we get contented and not many of us out there can continuously set goals and achieve them every single time.

I set milestones for myself but not goals.

Instead of setting dead-end targets (e.g. losing 30 pounds in 5 months or gaining 20 pounds of lean muscle in 1 year), why not embrace fitness as a lifestyle? It's something that you do as part of your life - just like brushing your teeth.

Being 'financially fit' is similar. Instead of saying, "I want to save $5000 by June", why not make it a lifestyle to earn more and save more to focus on things that truly matter.

Then set milestones along the way to measure your progress.

It is an ongoing process. 

7) Making Time, Not Finding It

How do you find time to go to the gym if you work 70 hours a week at the office?

You simply make time. 

The lack of time is really an excuse. If you want something bad enough, you've got to go get it. Workouts do not take long - 30 minutes of High Intensity Interval Training (HIIT) is all you need to stay fit all year round. 

The problem with us is that we'd rather fill that 30 minutes watching TV, browsing senseless videos on YouTube, scrolling through the updates of people's lives on Facebook or hitting the bars after work. 

This is highly applicable to our finances. 

Just like finding time to work out, we've got to make time to learn about investments, track our finances and find ways to earn more side income. 

Right now, I could be sitting in front of the TV and watch my life drift away. Instead, I'm making time and a conscious effort to write this blog post. 

8) Risk

You can't gain muscle if all you're doing in the gym is lifting a couple of pounds. For some serious gains, risk is instrumental. Try hitting up heavier weights while deadlifting. 

You may strain your back, but staying on the safe side all the time guarantees limited gains. 

Like it or not, stashing your cash under the mattress presents a set of risks on its own. 

Fortune favors the bold, but there's a clear line between a silly risk and a calculated risk. 

I'm referring to the latter. 

9) Staying Invested

You're not going to see any difference in the first week of lifting weights. Most probably, you will not even see anything after a month of so. 

But if you stay invested, show up and stay consistent, you'll notice your efforts compound  over a longer period of time. 

I'm pretty certain that's how investments and businesses work as well. 

10) Soreness Is Proof Of Progress

When you follow a proper gym/weightlifting routine, and push yourself beyond your limits, I promise you your muscles are going to hurt the next day. 

I love that kind of pain. 

Simply because it's proof that I'm working the right muscle group. 

Sometimes, when we try our best to save 50% of our paycheck, it can be painful. All that delayed gratification, deferred spending that may never be realized, and watching everyone else splurging on new gadgets, gizmos, cars and symbols of success can make us sore. 

I'm human too and there's definitely temptation to do the same. 

But if you feel that soreness, you're definitely doing something right. 


This is how we can all stay financially fit. 

All year round. 

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  1. Josh,

    Great post! Even though I've never been to a gym, I exactly understand where you come from, probably because I'm very familiar with the financial parallel or because I've played football for years.

    Currently I'm doing some interval training and even though it hurts so much, the feeling of empowerment at the end of each sessions is awesome. It feels exactly the same as being able to publish a great savings rate at the end of the month.


    1. Yes NMW, I think the principles involved in achieving something are usually transferable.Our job is identify them.


  2. Great post, I see those 3 time visitors at gyms all the time. Consistency is definitely the key.

    1. Consistently reaffirming a good habit equates to achievement. However, consistently reaffirming a bad habit is a guaranteed recipe for disaster.

  3. I like the soreness from working out, but the few times I've felt something I might call "soreness" from the market I don't think I liked it :)

    Fitness is one of those things you can't cheat, the individuals that take the time and commitment to sculpt their bodies is remarkable. The same can (almost) be said about finances. For most people this is something that takes a lot of time and effort to build. Like you said, showing up is 50% of the work. But occasionally there are people that knock an investment out of the park. Typically that's not dividend stocks, that's more of the apple, google or tesla investors that I'm talking about there. But the people that take care of their finances and commit to them because they realize their long term importance are the people that I think are worth admiring.

    1. That's a great point Zee.

      I get what you mean. Sure, I won't deny the fact that "experienced stock pickers"'s the thing, sometimes they do hit 'jackpots' and sometimes they don't.

      I don't think there's a right or wrong answer to this. Some people are hunters, they actually like to actively hunt - sometimes they catch something, sometimes, they don't. To me, that's a tiring lifestyle.

      Building systems is what suits me best. I'd like to own the farm instead of looking for the fruits all the time.

  4. I'm gonna stick with the lifts thing but man I miss CrossFit. Can't afford it down here and also don't have the time I did without kids! I'm trying to lift heavy twice a week and play volleyball too. Ideally would be 3x per week but I'm just not able to put in the time right now. Can't be mad about it.. just need to realize that it's what I am currently working with.

    1. Haha, could you still do an improvised version of CrossFit workouts? I try my best to lift 2x a week and hit the park (bodyweight + bars) another 2x per week. Each session never exceeds 45 minutes. However, it's tough to stick to the routine when the schedule gets tough.

      And yeah, we've just gotta make-do with what we have - always squeezing the most out of life.

  5. Fantastic comparison between efforts invested in building our bodies and the ones we need to financially "bigger & better".

    Exactly the same mindset applies to both and both face similar challenges.

    I have an analogy to present as well. When driving, I use the turning signals even when I am alone on an intersection with great visibility, proving there is nobody on the road but me. Even when its in the middle of the night around my house. Why? To build a strong habit of doing the right thing no matter what, instead of succumbing to laziness.

    Next time I have to wash the dishes, I won't postpone but will do the right thing. Or having to clean the bathroom or whatever duty calls for my immediate attention. Brain receives reinforcement from every little deed and we have the power to decide whether to train it to be lazy or to train it to do the right thing at the time.

    Loved the article, thanks a million for posting!

    1. Thanks for the kind words Matilda. I think in life, getting there is the easy part, maintaining it, however, is where we are tested. Using your analogy, learning how to drive is the easy part. But being a good, gracious and law-abiding driver after that is the hard part.

      It's true that mental conditioning and forming habits are what's gonna help us sustain the lifestyle that we want.

  6. Nicely put, there indeed are many parallels. I think the same sort of analysis may apply to healthy diet. Real fitness doesn't happen unless we make it part of our lifestyle and integrate it into our routines and who we are. The utter long-term failure (if the goal is to achieve and maintain a healthy weight) of all diet programs I think illustrates the point. For me, the motivation to be fit comes from the result--feeling well, being active, stellar medical test results, financial security--my quality of life is directly tied to my level of fitness, in other words.

    Thanks for writing!

    1. You got it spot on, Kurt. In a nutshell, whatever we want to achieve has to be integrated as a part of life because everything is linked. See you around the blogosphere.


  7. My latest foray into Financial Resilience is merging it with minimalism aesthetic and a lifestyle of organization. One great point I learned from a book recently on frugal living which I can't remember the title is.... put off a purchase as long as possible. I guess it was my Girl Scout training but I took pride is having three of all things essential and a lot of other stuff as well. By putting off a purchase I notice that you allow time for creativity, needs to change and settle, running into the item at a thrift sale or on the curb, Purchasing something is not always the best option and comes with its own set of requirements for your life. And getting rid of stuff is much harder than buying stuff. It is retraining yourself from that small adrenaline lift at the time of purchase. So yes... keep changing your routine... setting new goals. But consistent with the end goal. Thanks for the blog entry.... very inspiring.

    1. I like that point a lot, although I have to admit that I struggle with putting off purchases sometimes. However, it is critical to take note of the fact that there are 2 kinds of items that you can purchase (one that gives you a boost in adrenaline and depreciates in value) or (one that gives you a boost in adrenaline and adds value to your life).

      On the minimalism front, sometimes it isn't always about the price alone, it's about whether or not that item is adding value/freedom to your life. For e.g. I'll usually pay more for items I know will last me a long time (Apple products last me minimum 5-6 years and I'm still using an Ipod nano from 2007).

      Frugality requires a very careful approach as too much of it affects your psychology and your social relationships. On the flip side, too little of it affects your future.

      Our job is to assess each situation consistently, on a case-by-case basis and not applying a broad-based rule.

      Thanks for commenting,

  8. Great post. Healthy eating and fitness I think are the closest analog to personal finance. They're both a battle against temptation and how everyone around us acts, and consistency and a plan are key.

    1. They definitely share the same backbone. One can definitely learn a lot about life through either one of these pursuits. Now that I see it so clearly, I'm applying the same methodology and mindset to other areas of my life.