Recreational long distance and marathon runners are wired differently. Ask any sane person to get up and run 26.1 miles all at once and you’re likely to get a two-word response that includes a four letter adverb. These running crazies come in all shapes and sizes with different abilities, yet they all share similar traits and characteristics that enable to accomplish extraordinary physical feats. Almost all of these traits are seen in some of the world’s most self-made wealthy individuals.
They Start Small and Build
Recreational distance runners often start running out of nowhere as a means to get in shape or to challenge themselves. They didn’t start their training by going out and running a full marathon day 1, instead they began with a very short (and often humbling) jog or walk. Many runners will tell you this was the mental turning point in their personal fitness. While it probably wasn’t the prettiest of runs, it was an affirmation to themselves that they were capable and they never looked back.
Wealth building begins with that first dollar saved or perhaps that first dollar paid against debt. Anyone, regardless of their income or financial knowledge, is capable of saving or paying down debt. Much like running, once the wheels are set in motion towards a specific goal the momentum will carry you far distances over a period of time. However, it begins with that first dollar.
The Millionaire Next Door, a book written by Thomas J. Stanley and William D. Danko states that approximately 80% of millionaires in the US are first generation rich (they didn’t inherit their wealth). That means the majority of the wealthy weren’t born into affluence, rather they built up their riches over a period of time by saving more than they spent.
Once someone has geared their mind and spending habits towards accumulating wealth, rather than consuming it, the power of compounding starts to work in their favor. Albert Einstein called compounding interest the 8th Wonder of the World. Consider that if you invested $10,000 every year for 10 years in a row at a 5% annual return you would have over $132,000 with compounding interest. The earlier you start to save, the more compounding interest can work in your favor.
They Set Realistic Goals and Stick to Them
Runners set themselves up for success by setting goals. They don’t leave victory to chance, instead they create a step-by-step plan or process to ensure they’ll hit their target. Consider that most marathon training programs are 17 weeks long and involve running 5-6 days per week. Each run is logged in the program to track progress to make certain come race day they’ll be well prepared. Marathon runners understand that prior to the actual marathon their race has already been run over the course of the previous 17 week training program. On race day it’s a matter of enjoying the rewards of all their hard work.
Wealth builders are forever setting short and long term goals and tracking their progress via budgets and net worth statements. The process of setting and working towards these goals is often just as rewarding as achieving them. Goal setting is critical to obtaining wealth because it takes inspiration, and turns it into action. When setting targets they should be both measurable (i.e. “I will save 15% of my net income into a savings account”) and realistic.
BMO released a poll in January 2014 that found approximately 34% of Canadians surveyed planned to fund their retirement via winning the lottery. With the odds of winning the Lotto 6/49 jackpot sitting at about 1 in 14 million, there’s probably going to be some disappointed retirees. While the odds of winning the lottery are shockingly low, the percentage of disillusioned is even more appalling. Setting an unrealistic goal can be almost as destructive as not setting a goal at all.
They Don’t Make Excuses
Have you ever been driving in sub-zero temperatures and seen someone out for a jog? Even with your heated seats set to high your teeth still chatter and here this runner is burning up a sweat! Save to say this person didn’t necessarily relish going out for a training session in the frigid cold, however the dread of not getting their planned work out was worse than battling the elements. Perhaps the ultimate extreme is the amazing Terry Fox who ran almost a marathon a day, for 143 days, on one leg while battling cancer.
The world is rife with individuals that make financial excuses as to why they can’t get out of debt or start saving. They often have a million and one reasons as to why they are in debt, or can’t save, but they all have one thing in common – they ultimately spend more than they make.
The most surefooted way to become wealthy is to consistently set aside more money than you earn, also known as “paying yourself first”. This term reflects the idea that often paychecks should go towards savings first and foremost and the remainder towards our personal consumption (living expenses, entertainment etc.). The budgets of most families and individuals are in complete reverse as the majority of households put their money towards a particular lifestyle and only then put away whatever remains (if anything) towards saving.
A problem for many is once they begin to earn more, they also start to spend and consume more via a bigger house, a nicer car etc. This completely goes against building wealth, and often this spending increases at a higher rate than their earnings increase. To accelerate wealth you need to keep your spending in check and aggressively earn more. The poster boy for this type of living is the investing giant Warren Buffet, who, despite being a billionaire, still lives in the same house he purchased in Nebraska for $31,500.
What They Lack in Ability, They Make Up With Effort
Runners come in all different shapes and sizes with varying degrees of natural athleticism. Each one has their own race time targets to determine their success. While some runners will aim for lightning fast times, others are fine completing the race with a pace that suits them.
Society often equates one who has a high income/salary as being wealthy. While making a lot money can accelerate wealth building, it by no means guarantees it. (Look at the number of sports athletes that file for bankruptcy each year!) Taking control of your own spending is often much more effective than earning a boatload of money when accumulating wealth. Furthermore, these lessons of controlling your finances will continue to benefit you throughout life long after you retire.
While earning potential may be capped at a certain level for an individual, the ways in which they save ultimately defines their success.by