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It?s Not the Race, It?s the Training

I recently completed my second marathon, The Breakers Marathon in Rhode Island. (My first marathon was in Iceland, so I wouldn?t be embarrassed if I failed to complete the race.) While running The Breakers Marathon, I randomly started talking to a fellow runner, Barry Butlien, because his Team in Training shirt said Westchester on it, which is the county in which I live. (Team in Training is a running group that raises money for leukemia and lymphoma.)

Normally when you meet someone during a run, you exchange a few running stories, talk about the weather and move on, but Barry, a financial planner, is a principal at Marathon Financial Group in Elmsford, New York, and I, obviously, am inherently interested in finance. We ran approximately 20 of the 26.2 miles together talking. While we chatted about our families (his children are bit older than my daughter) and shared a few running tales, what really set the tone was our discussion about finance.

The money conversation started off with our contemplating what it would take to afford some of the simply incredible houses that line the shores of Rhode Island?a sum that neither Barry nor I possessed. Note that the course at the Breakers Marathon is simply stunning, as it hugs the coast for most of the race. But our talk also veered off to a number of interesting finance topics.

One of the topics that stuck with me after the run was a discussion of the book The Millionaire Next Door. Barry had just reread it while I remember vividly how much I enjoyed reading it many years ago. Now, mathematically speaking, the statistical premise of this book can be picked apart, and has been by some prominent authors. However, Barry didn?t note the book for the stats it contained, but for the logic that it outlined. And I happen to agree in the value of what one can glean from reading this finance classic. In fact, to focus only on the numbers is to miss the point of the book.

Essentially, the book helps to highlight the fact that finance is pretty simple if you just follow some simple rules. Always looking for the ?keep it simple? approach, I?ve broken these rules down to three words: Save, Invest, Insure. Anyone who knows me knows that these three words make up my financial mantra. Each one has its complexities, but if you step back, they really are simple to understand and follow.

Save: Don?t spend all your money or you will never have any. Try to save 10% of your take home pay. More is even better. Avoid most debt, being careful to ensure that you can afford any borrowings that you do take on.

Invest: Put your money to work by following a logical investment plan, such as the Value Line Asset Allocation Model (you can find this in the back of the ?How To? guide that came with your subscription). The fact is, however, that a good balanced fund is all that?s really needed, if you don?t want to go through the work of creating, tracking, and updating a portfolio on your own.

Insure: Protect yourself from catastrophic losses. Adequately insure your home, car, and, if you have dependants, life, and make sure that you have emergency cash set aside equal to three to six months of living expenses.

You should also make sure your portfolio is adequately balanced, so a drop in any one investment doesn?t destroy your entire portfolio.

Set all of this up, put it on autopilot and, for the most part, you should end up OK at retirement, assuming, of course, that you started the process early enough. What really struck me about what Barry and I were saying, however, was how similar running is to finance.

For example, the big race was exciting and hard, but what allowed me to actually complete the race that day was all of the time I spent training before the race. It would have been impossible for me to run a marathon if I hadn?t taken the time to prepare well in advance of race day. This is equivalent to saving money as early as you possibly can in your life. If I didn?t train or started only a week before the race, I simply wouldn?t have completed the race. If you wait too long to save, you probably won?t be able to retire as comfortably as you?d like?it?s as simple as that.

When training, I tend to burn through a set of $100 plus shoes every few months. Then there is the technical attire that has to be bought?sweat pants and cotton t-shirts are no longer enough for the serious runner. In fact, I spend more on running gear than on just about any other attire I own. A slight stretch on this one, but the money I put toward these items is like investing. There is a cost to these items, but without them, I wouldn?t have been able to run the marathon. On the finance side, you need to put your money to work so you can reap the rewards of investing. If you don?t, you might as well try running a marathon in wing tips and a suit?not a pleasant thought, trust me!

While I?m in training mode, I make sure that I take time off to let my body heal between runs. Some people run more often than I, but my body starts to get cranky if I do too much running. I also make sure to stretch. And I?m fairly careful about what I eat?this is particularly true after a workout. This is all done in an effort to ?insure? that I don?t get hurt and miss a race due to injury (again!). The same is true in finance: You have to insure against catastrophic loss so you and your family don?t get derailed on the way to financial security.

So there you have it, my somewhat forced (some might say tortured) comparison between training for a marathon and finance. One more thing about that race, however, came to mind when considering all of this, particularly in light of Barry?s profession.

During the early part of the run, Barry and I helped each other keep a decent pace. At around mile 20 or so, Barry?s calf started to act up and he stopped to stretch. I kept going. At mile 25 Barry caught up to me because I had stopped to walk up a hill (what kind of evil race director puts a hill at mile 25 of a marathon anyway?). I was tired and ready to give up, which is, essentially, what a runner means when he or she talks about hitting the ?wall.?

Barry talked me through the last mile and helped me finish the race. He provided me with the encouragement I needed at just the time I needed it. In the finance world, this is akin to subscribing to a publication like this one if you are a complete do-it-yourselfer, or talking to a financial planner, interestingly enough like Barry, to make sure you?re on the right track.

Just like running, finance is pretty easy on the surface, but each step has its own complexities. There are times when a little help goes a long way. That?s why Arnold Bernhard started Value Line, and why folks like Barry run (and are financial planners).

Reuben Gregg Brewer