In the course of teaching FQ I’ve come to understand that the biggest obstacle for someone to succeed is when the body rejects it. Sometimes I get comments like “It’s easy for you to do that because you and your husband have been in the banking industry for a long time, but it’s not the case for most people.” Then again, not everyone in the banking industry can attest to that claim. However, I acknowledge that it is easier for me to sustain saving and investing because I like doing it. I get the kicks when I balance our checking account in one go. How weird is that? I cannot tolerate idle cash in excess of working capital requirements left in non-earning accounts. I feel the need to deploy them in higher yielding investments right away. The thrill I get when I see our Net Asset Value (NAV) grow is incomparable to the thrill I get from a shopping spree.
But that’s just me, and I know that I’m part of the minority. So I tried to figure out, what is it that I don’t like to do but I know I should? And the answer is EXERCISE. I know I should make it a part of my lifestyle for my own good even if I don’t like it. In the same way, everybody knows that saving and investing for the future is a must but only a minority does it.
To help me understand the sensibilities and challenges of doing something you don’t like but have to, I embarked on an experiment on myself. I got into an exercise regimen in April 2012 and kept a journal of the adventure. I even shared my First Day of Workout in my website.
True enough, I learned a lot and understood, and now sympathize more with the “FQ-averse people.” Here are some of the salient parallelisms between Exercise and Saving:
1. The most obvious is saving and exercise are both a must. We all want the positive end results but we don’t want to do them.
2. Liking or not liking saving and exercise has a deep-seated reason. I tell people that the first step to having a high FQ is to go back to their childhood money memory. Having a healthy or unhealthy relationship with money is rooted in our childhood. Maybe you heard your parents say that money is hard to earn, or the root of all evil, or it was not polite to talk about money, etc. In the same light, when I tried to go back to my childhood, I understood why I don’t like to exercise. I had asthma when I was young. I’m also the fourth among four girls who were all not into sports. Thank God, our youngest and only brother got into sports. But you know what? I sometimes imagine having a pretty daughter who’s a varsity soccer player. Anyway, understanding the deep-seated reasons frees us from getting stuck in them and allows us to discard them and come up with new beliefs.
3. Knowing your goals make exercise and saving more meaningful. My long-term goal is to live to my healthy old age. I hope and pray that my husband and I will live to enjoy our grandchildren. In the same light, everyone wants to have a financially happy old age, not worrying about bills but being able to treat (and spoil?) their future grandchildren.
4. Shorter-term goals provide us with a more pressing need to get more serious with our resolve to exercise and save now. If you set a deadline for yourself to get into a particular dress size on a particular date, you know that you have to start now. In my journal, I wrote that I want to look my best on our silver wedding anniversary in 2014. In the same light, if you want to travel to a particular place at a certain age, your saving timetable is a lot clearer than that of “enjoying your grandchildren in the future.”
5. Healthy diet is to exercise, as investing is to saving. It has to be a tandem. You can’t have one without the other.Even if I exercise everyday, I will never be truly healthy if I don’t eat the right food in the right quantity. I’m fond of aligue, bone marrow, desserts and other yummy but sinful food, but I just consume them very prudently and I’ve already made vegetables and fruits part of each meal. In the same light, no matter how much you save, your financial future will not be bright if you don’t invest properly. You need to invest the right amount of your money in the right asset classes to protect you from inflation and to meet your financial goals.
6. We may not start from the same starting line but any advantage, when wasted, will be negated bringing us to the same starting point come midlife. We were not born equal. Some of us were born with a silver spoon while some were born to poverty. Just like body build, some are genetically gifted to have bodies that are not prone to excessive weight gain while some are not. However, when we reach midlife, bad habits of unhealthy diet and sedentary lifestyle start to pack in and show, especially in the mid section. In the same vein, even if you inherited wealth from your parents, if you do not know how to take care of it, that finite resource will soon be gone. There are midlife folks who continue to live as if they’re still rich even if they’re dead broke. To a certain extent, midlife is the great equalizer.
7. Understand your weaknesses and excuses so you can design something to overcome them. In the past I’ve tried several times to enroll in a gym but I would not follow through and I had excuses such as traffic, time, getting bored with routine, etc. I decided to hire a trainer to come to the house first thing in the morning and that covered a lot of my excuses. In the same way, figure out what your excuses are, why you’re delaying your regular saving and investing. Maybe setting an appointment with a real financial planner will pave the way to your success.
8. The serious start is always painful. When I started with a trainer last year, my body was shocked. I couldn’t move the following day. I felt like I was paying someone to inflict pain on me. You may feel the same when you hire a real financial planner who charges you a fee but doesn’t earn commissions on your purchase of financial products. It’s departing with your hard earned cash in order to save well. Then when you get down to business of actively saving and investing, you will feel the same shock, especially if you’ve been used to a carefree financial life
9. The muscle needs exercise. Both body and “saving” muscles need exercise, a routine to get used to. And it’s only when we follow through will the initial pain go away
10. Expect euphoria and plateau in both your exercise and saving. After I overcame the initial shock, I felt good both physically and mentally. I felt the endorphins after each session. This success high is even more evident among those who are trying to lose weight. (It was not obvious for me because I was after toning not weight loss). Whenever they tip the scale and see a significant decline it’s like hearing the angels sing hallelujah! Then comes the next phase, the plateau. Nothing is happening and you’re starting to get cranky from all the sacrifices and sometimes teasing that you get with no corresponding results. Where are the angels singing hallelujah? The same thing with your saving and investing. You keep on limiting your spending, missing out on some eat-out with officemates, and avoiding the sale like a plague. At first, you’re ecstatic. What with the market index climbing up to over 7,000! And then correction happens. You continue to save but you see your investment value go down and you ask yourself, “What am I doing? Should I still go on? Where are the angels chanting ‘Buy! Buy! Buy!’?”
11. Meaningful changes don’t happen overnight. This is your answer to the previous number. You should always remember that significant and meaningful outcomes don’t happen overnight. Nobody becomes sexy overnight, in the same way that nobody becomes obese overnight. It’s centimeter by centimeter, kilo by kilo. In the same light, nobody becomes rich or poor overnight. (Although reckless trading in the stock market can do the latter for you). So be patient and be vigilant.
12. Choose your monitoring well. It’s good to be vigilant but it’s crazy to weigh yourself after every meal you take. That’s stressful and unnecessary. The better way is to use a measuring tape and do it periodically – monthly or weekly maybe. And never, ever buy yourself a new pair of jeans and other clothes when they become too tight. Suffer the consequences of looking like suman in your clothes until you cut down on your food intake and resume your exercise. This, for me, has been the most effective way of keeping the same dress size all these decades. In the same light, it’s crazy to fret about the ups and downs of your investments everyday especially if you’re the manic-depressive type. Just save and invest as planned, and update your Balance Sheet periodically – monthly or quarterly. And never ever splurge on something if you failed to do your regular saving.
13. Be in the company of people who can influence you positively. I’m lucky that my husband is athletic. He was into all sorts of sport in his youth. Now he’s into marathon running, which entails a great deal of discipline. I don’t have a daughter and my sons are also active and would feel lethargic after not doing something physical for a period of time. So peer pressure is sometimes what makes me work out. I observe a smile on their face when they see me working out. If you want to sustain your saving and investing, choose your company. I think this is why a lot of investing groups on facebook are growing rapidly. The members find support from like-minded persons all over the globe.
14. “Just do it” is the success factor in a lot of things. In the morning before your mind succeeds in convincing you that it’s not a good day to exercise, just put on your rubber shoes and do it without thinking. I promise, after doing your routine, you will feel happy as your endorphins kick in. In the same way, regular saving is successful if it’s the first thing we “spend” on and that is why we should all practice “Pay yourself first.” The best way to implement this is to automate it. Ask your payroll bank about this feature. My oldest son tells his friends that by “Paying himself first” he can enjoy spending the rest of his salary because he is without guilt. I guess guilt-free and happy spending is the counterpart of endorphins.
15. You reap what you sow. I must confess, when my trainer could not come at my preferred schedule anymore after a few months, I didn’t try to reschedule, nor look for a new one. I tried to do it on my own. It would have been great if I already acquired the fondness for workout but maybe it was too soon. I continued doing some of the routines but less vigorously, then I omitted some routines, now I’m down to the super shortened version. Naturally, I haven’t gotten the toned results I originally aspired for and I know I will not if I don’t step up. The same thing with your saving and investing. You cannot expect to be rich if you only set aside a small amount of your earnings. Some financial gurus question the 1/10 mentioned in the classic The Richest Man in Babylon, but they take it out of context. This is what the book says, “A part of all you earn is yours to keep. It should be not less than a tenth no matter how little you earn. It can be as much more as you can afford. Pay yourself first!” So 10% is only a minimum. And remember, in both exercise and saving, minimum efforts yield minimum results.
16. Add a little fun to the routine. I like dancing and there was a time I had this in my gym routine. Maybe I should put that back to help me sustain my workout. In your saving and investing, add a little fun. If you’re anything like me, you may get the kicks from balancing your checkbook or updating your Balance Sheet. Or you may find excitement in investing in stocks, real estate, etc. Just make sure that the added fun will not ruin your investments, in the same way as adding dancing to your exercise should not make you spend too many late nights dancing with your D.I.!
17. Starting young at home is still the best. Just like having the right money values, instilling healthy eating and exercise habits are best taught at home from the time the kids are born. I often wonder, had I been physically active from the start, would I find it easier to sustain my regular exercise the way it’s natural for me to sustain my “financial exercise” because I was brought up by frugal parents? Whatever the answer is I know I cannot use it as an alibi because as I said in no. 2, we should not get stuck in the past.
18. The challenge to have a healthy lifestyle is greater now. The temptation to spend has significantly increased. What with expensive gadgets such as cellphones, iphones, ipads, etc. being commonplace possessions among kids today? Likewise, the temptation to be unhealthy is also strong with too much junk food and sedentary lifestyle as the consequence of electronic games replacing the rough and tumble of outdoor games.
19. We’re only human. We rise and fall and should rise again. I felt bad when I realized that I wasn’t getting what I aspired for because of my own doing. It’s probably the same for someone who’s unable to be consistent with his saving. But instead of beating ourselves with our failures, we should just rise again and set new goals and routines.
20. The value of optimism. In Behavioral Economics studies show that humansare always more optimistic about their behavior, assessment of their intelligence and looks, outcome of their projects, etc. than reality. I agree but I don’t intend to cut back on my optimism, I’ll just keep that data in my mind because I think being a Pollyanna (having the bias for positivity) does us more good than harm when it comes to exercise and saving. When middle-aged readers ask me if it’s too late to start saving and investing I always say it’s better to do something than nothing at all. Same goes for obese middle-aged people. Anyway, it only takes 21 days to form a habit so there is hope. Moreover, doing something good (i.e. living a healthy lifestyle, both physically and financially) is already the reward itself. You feel good knowing that you’re doing the right thing, and people around you feel the positive vibe.
My experiment led me to understand the challenges faced by someone who’s not comfortable with money. It also made me see more clearly how very similar it is to keep a healthy wallet and a healthy body. It’s all about discipline, delaying gratification, meaningful goals, follow-through, psychology, patience, optimism. It made me realize that for me to be an effective teacher and role model on financial matters, I should also lead a healthy lifestyle.
Cheers to healthy wallets and healthy bodies!