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At first glance, being physically fit might not seem to have much in common with being a good investor. One deals with the gym and workout plans, while the other deals with online brokerage accounts and investment strategies, but there are surprising parallels. Anyone who has set fitness goals and pushed themselves to stick to a rigorous physical routine has developed skills that translate to investing strengths. We’ll unpack each of these values, revealing how physical health can make you a better investor.
Key Takeaways
- Investing and following a fitness routine share similarities that reward values such as discipline, patience, and risk management.
- You’re accountable to yourself for maintaining good health and physical fitness, just as you’re responsible for your own financial well-being.
- Creating clear goals and actionable steps is a critical element in following both a fitness routine and an investment strategy.
Discipline
Anyone who’s created a workout routine or worked with a personal trainer knows that you’ve got to be disciplined to see any benefits. Showing up and putting in the work isn’t always easy, but by prioritizing your workout time, you’ll create habits that are easier to stick to going forward.
The same is true for developing and following an investment strategy. By setting clear, achievable goals, you’re more likely to stay consistent with your contributions. Just like working out, following an investment routine can become easier the longer you stick with it.
Patience
Just as you can’t expect to see instant results after going to the gym once or twice, you’ve also got to be patient when it comes to seeing returns on your investments. This is because investing rewards long-term commitment.
The benefits of regular exercise and investment appear gradually. Fortunately, both have a positive compounding effect. For example, you might start losing weight or improving your muscle mass the longer you follow your routine. You’ll see similar improvements with your investment strategy since growth on your funds will compound over time.
Risk Management
Anyone who has physically pushed themselves to the limit knows that risk management and recovery are part of growth. Specifically, you need to know your physical limitations to prevent injury and give yourself a threshold to work toward.
In the same way, investors must consider their risk tolerance when investing. For example, if you’re an investor who plans to use your funds for retirement, you may be more risk-averse the closer you are to retiring. Knowing your limits can help you allocate your assets so you can meet your personal financial goals.
Tracking Progress
Following your progress makes sense from a physical and financial standpoint. Just as you count your reps or expect to see improvement in your running times, you should be able to track improvements (like your net worth) in the performance of your investments.
Paying attention to your portfolio helps reinforce your dedication to your goals. Additionally, if you miss a target, you can hold yourself accountable for meeting the next one.
The Bottom Line
People who practice discipline and patience while working towards a clear goal may achieve better success, especially if they can track their wins over time. The strengths and skills of the gym easily translate to financial success, especially since those who prioritize their health have more time and energy to devote to their investments.
