Is taking control of your money as hard as an Ironman?

Cashflow Awareness

I was thinking about this the other day, which is a bit random I know, but bear with me. It popped into my mind because the timeframes seem to be about the same, from complete novice to relative expert in about 5 years, in my experience at least!

I wondered what else was similar in the process.

Starting out you are blissfully unaware of what most of it is all about. To be honest, when I first thought about doing a triathlon back in 2016 I had no idea what an Ironman was or what it entailed (2.4 mile swim, 112 mile bike and 26.2 mile run) let alone what it would take to complete one.

The same could be said of personal finance, it might start out with a bit of transaction tracking and paying off some debts, which was me back in 2019, but can lead you down all sorts of paths that you didn’t know existed. Financial Freedom, FIRE (Financial Independence Retire Early), Global Index Funds, Portfolio Diversification, Withdrawal Strategies and Sequence of Returns Risk were all terms that I had not heard of before I started on my personal finance journey.

My first challenge on the triathlon front was pretty major. I couldn’t actually swim, well not properly I mean, front crawl with face in the water and all that co-ordinated breathing stuff. It was fair to say that I had completely underestimated how hard this initial step would be. However, after a couple of very frustrating months, it all started to come together, one small incremental step at a time, and hey presto, 1 full length of the pool, I know right, legend!

This closely resembles the process of tracking our spending and automating where our income was going each month. It was a labour intensive few weeks of going back over the past few months and categorising how much we had spent and on what. It’s tough, but you have to go through this step to raise your awareness. We had no idea we were spending so much in certain areas and it wasn’t even on the things that we value the most. Automatically moving our incomes into predefined accounts was a game changer, it took a while to set up and get running smoothly but once it was, everything felt easier, we could finally see where everything was going and make more intentional decisions.

This first stage, which I call ‘Cashflow Awareness’ is probably the hardest and most frustrating in some ways as everything is new and the learning curve is steep, but it’s also hugely rewarding. That feeling of accomplishment when you complete your first triathlon or having all your accounts and transactions automated, with money put aside for future expenses. It’s an amazing feeling.

Investment Awareness

The next stage of the process is where it starts to get a little more technical. You have the basics sorted but you’re still learning a tonne and really getting into some of the details.

For triathlon I was starting to think about increasing the distance and improving my skills, which was actually pretty fun and had moments of comedy along the way. Learning to put on a wetsuit, swimming in open water and riding a bike with your shoes in cleats so that they are essentially stuck to the pedals (and falling off numerous times), all meant that I had to get comfortable failing from time to time and asking for help along the way. It’s all trial and error, try something, see if it works, if not adjust it slightly, all the while honing your skills to improve gradually.

With our finances we started to look into finding and consolidating our old workplace pensions. Remembering who you have worked for over the past 20 years and then trying to work out if you had paid into a pension scheme was no easy task but eventually my Wife and I found all of the paperwork we were after. We decided we wanted to consolidate them all to make it easier to manage but along the way discovered that we could also save money on fees and invest in funds with more growth potential, but which platform and which funds?

This 2nd stage, which I call ‘Investment Awareness’ takes some courage and a bit of a leap of faith. It often goes against everything you may have been taught throughout your life, maybe swimming in lakes was dangerous or investing money was risky. You have to challenge preconceived notions and be willing to try to understand that there are other sides to every story. There’s a big difference between ‘Saving’ and ‘Investing’, now don’t get me wrong, savings are important and definitely have their place, but to create real wealth in the long term, you have to get comfortable with investing as it’s the only way to outrun inflation.

Retirement Awareness

The last part of the process involves a lot more mental and emotional thinking as you battle with some quite significant events in your life.

After 3 or 4 years of training for various triathlon events of varying distances I managed to complete a couple of half Ironman events, and so leading up to these I knew what a full Ironman was but I don’t think I really ever thought I would comprehend actually doing one! I guess it’s like anything in life, if you break things down into smaller chunks then who knows what you can achieve. I trained for a full year to get myself ready for Ironman UK in 2021 and it was physically challenging, but what surprised me the most was just how mentally tough this was going to be. Over an hour of swimming, followed by 6 to 8 hours on the bike and all capped off with a marathon distance run at the end. 14 hours of continuous movement towards your goal is very tough physically but mentally you go to some very dark places that require an inner strength that you don’t really know you have until you experience it.

I think about the physical side of an Ironman being like the financial side of retirement planning, it’s the part of the equation that everyone can get their head around and work towards with some time and effort. The mental side of an Ironman is like the emotional side of retirement planning and the part that people don’t really think about even though it is massively important to ensure success in both.

This stage I call ‘Retirement Awareness’. Many people only start to think about their retirement when they get very close to that point or maybe they have a rough age in mind, usually driven by what their parents did, but they don’t really think about what they truly want for their retirement. In my opinion, preparing for retirement should start as early as possible and certainly whilst you’ve still got time to do something about it, and this requires thinking as much about the emotional side of the equation as it is about the financial side.