This is the seventh in our series on the 7 Steps to health and wealth.
- Step 1 was about understanding that without a compelling reason to change behaviour, you won’t. And that reason usually comes in two forms: A sudden A-Ha moment of insight or crisis, or a very strong visualisation of something different. You can watch the video here
- Step 2 was around discovering The One Thing you could make into a daily habit that would make the most impact on your wealth. You can watch the video here
- Step 3 tackled the heartbreak of debt and the steps you should follow to get out of it. Not healthy debt such as a mortgage – the kind of debt that strangles you. You can watch the video here
- Step 4 was for people who don’t have debt, but who are struggling to break through the barrier of being able to start saving regularly. You can watch the video here
- Step 5 moved us into how to start investing, and what’ not to do. You can listen to the podcast here
- This is Step 6 – advancing your investing is like moving from a 10k run to an iron man
- Step 7 coveres how you protect the lifestyle you’ve worked hard to create. You can listen to the podcast here
- Lastly, you stand a greater chance of success if you follow these two fundamental building blocks of success
Whenever I watch my brother prepare for the Iron Man, it all seems very higher grade. He has a coach for swimming, a running group, and a cycling group. Then there’s the iron man group. And it seems to flow – which discipline is trained when. Then there’s what distance needs to be done on which day and in each specific combination. Crucially, he needs to diversify his training – making sure he spends time in all disciplines and within the discipline, spend time on the various different elements. Hill training, flat training, sprint cycling, team training, solo training. And he seems totally comfortable getting up in the middle of the night to get the miles in before work. Well, to me it’s the middle of the night!
Then there’s the nutrition. Wow. Now that’s a science. I benefited greatly from his knowledge when I was writing 5 hour exams that had no break for my Honours in Financial Planning. I needed maximum brain functioning consistently for 5 hours and he took me through what to eat at each stage. Bullet Proof Coffee, nuts, date balls – goodness, it was a thing. But it worked, and I was able to write my exams and bounce out of there. But what I learned most about his Iron Man nutrition is that it’s highly personal to him. His circumstances. His body type. And whilst he researches widely, he develops his plan and then through the toughest time (the race event) sticks to it. He once deviated and introduced something new into one of his races, and he paid the price of major stomach issues.
Sleep is also a major factor. It is the safety net that allows your body to rejuvinate, replenishes the energy in your muscles, and prevents you from eroding the strength you’ve built up by overtraining.
Lastly, the quality of his performance on the day depends on the length of time he’s trained for and the amount of training over that period. There are always unexpected external challenges – a flat tire, unusual weather. But his ability to navigate those to the best he can depends on all the training he puts in before the day. And the training he does for a half marathon, compared to the training for an ultra iron man is completely different.
Long term wealth creation is an ultra Iron Man
It’s so helpful to understand that long term investing is like an Ultra Iron Man.
- There are MANY facets to it, and you need to understand them all if you want to have long term success
- Get an accountability partner and trainer – someone who knows what they’re doing and can support you with the right advice tailored to your unique circumstances
- You need to have diversified assets, and even within those asset classes, make sure you’re further diversified
- Investing is unique to you, and what you want to achieve. It’s unique to your risk profile, how much you’ve already saved, how much you need to save to retire well. But once you’ve worked out a plan that is tailored to you, don’t deviate. Especially not when you are mid crisis – like the financial markets dropping. You can wreck your whole plan and throw away years of training.
- Investing is like the major disciplines of the exercise. However, creating wealth in your financial life is more than just investing. You need to make sure that you have safety nets in place such as disability and dread disease insurance in case you’re unable to work, and life insurance to protect the lifestyle you’ve worked so hard to create for your family.
- Lastly, the quality of your retirement depends on the length of time you’ve saved for and the amount you saved along the way. You can’t put in a last minute burst of saving and hope you’ll be okay for an ultra Iron Man retirement. You need to save over time and save enough.
Diversification is key
Diversification means that you don’t have all your eggs in one basket. So that if something happens to that basket, you won’t lose everything.
There are many ways to diversify
- Diversify your asset classes
- Diversify your country exposure
- Diversify your currency exposure
- Diversify the tax treatment – between retirement funds and non-retirement investing
The extent to which you diversify depends on your personal financial risk profile.
Enter your details here, and we’ll send you a link to take a 25 question personal financial risk assessment.