What bicycling 100 miles taught me about financial planning
It was a pleasant Saturday afternoon but I was struggling.
My joints ached, I had trouble keeping my head up, and peddling up the mildest hill was a strain. Kids on their bikes passed me. I kept ahead of joggers but not by much. As dinnertime approached I pulled into the parking lot where I had left my car. I looked down at the odometer. 101 miles.
Nine hours earlier my partner and I were dropped at the shores of Lake Erie in Buffalo, New York. Our goal - to ride back to Rochester where we live. It was just about a month past my 60th birthday and I wanted to accomplish a milestone. So I set out on a rite of passage for cyclists who are getting serious – a Century Ride.
What I learned between committing to that goal and attaining it clarified how I can do a better job of financial planning. And what’s wrong with how a lot of advisors approach it.
Understanding what goals are good for
It didn’t start with the goal of being a better cyclist. I like riding. Now that I’m doing it regularly (with a better bicycle) I enjoy it more than I anticipated. But that wasn’t the objective. Approaching that benchmark birthday, I was thinking more seriously about my health span. I have always had an on-again/off-again relationship with exercise. If I wanted to continue having happy and productive years, being more consistent about fitness would need to be part of it.
Wanting to be in it for the long term, I considered some alternatives. When I started talking with friends about wanting some kind of physical accomplishment to mark my upcoming birthday, the first suggestion was a triathlon. I don’t enjoy running. Long training sessions in the pool would get boring. Could I achieve it? Absolutely. And as soon I crossed the finish line I would check the box and stop training.
But bicycling I would keep doing. I could do it with my wife. Many of my friends ride. It would become a habit. I habit that would take me closer to the real goal: to be a healthy centenarian.
Long-term goals are about who you want to be, not about numbers. If a financial advisor starts a conversation with the question “how much do you want to have?” they are doing you a disservice. If the goal is more than 10 years away there is no way either one of you could have a meaningful conversation about that. The economy and the markets do unpredictable things. Annual deviations compound to create a range of possible outcomes so wide they become meaningless. More to the point, aiming for a number does not connect with your aspirations or values.
Long-term, who do you want to be? And what do people like that do to get there? Long-term goals can help set direction. What’s the next step to move toward it? That next step is a goal worth analyzing.
Know where you are
With the goal of a century ride, I knew I would need to be able to pedal at a certain rate for a certain length of time. Given that the goal was less than a year from when I made my decision, I could calculate the progress I would need to make. It was not so far off that I might drift too far and find myself unable to accomplish it.
To establish a training regime, I needed to know my current condition. So I took my first few bike rides. It wasn’t highly scientific, and did not need to be. I just needed to know about how far I could go and how fast. The pain in my knees began a little over 15 miles and I could average a speed of about 10 mph. With that information, I could chart what kind of progress I would need between where I was and 100 miles, ideally at 15 mph but realistically 12 mph, nine months in the future.
When working toward a short-term financial goal, knowing what you need to accomplish each step along the way is important. It is facilitated if you know how to get the couple most important numbers quickly. That is less true for long-term goals. Knowing how far and how fast I could pedal doesn’t tell me much about my long-term health. But it gives me a critical yardstick for my short-term goal.
Get guidance
Who do you go to when you need to build strength (for speed) and endurance? My wife and I had recently joined the YMCA and they recommended a weight trainer. Not knowing any endurance athletes myself, I found a book by Mark Sisson whose “Primal Blueprint” provided me early guidance in a better nutrition plan. Sisson as a former endurance athlete who also wrote a book on endurance training.
Who do you need to help you get your finances in order and get going in the right direction? A planner, an accountant, and an attorney all probably play a role. With your short-term goal? College for your kids? Vacation home? You may want a consultation with a college planner or to sign up to get real estate news from your chosen vacation spot.
Develop the right habits
Tuesday afternoons I could leave work a little early and meet with the trainer. Until the pandemic closed the gym, I could get another one or two sessions before work each week. Each Saturday saw one long bike ride (starting at 10 or 15 miles) with a short ride (starting at 5 miles or so) a couple evenings a week. (Now my short rides are typically 12 to 16 miles and 20 to 30 on the weekends.)
Sisson’s guide advised using target heart rate to build endurance. An inexpensive heart monitor strapped to my chest provided a constant readout with the additional benefit of tracking mileage and speed.
Habits are what you need to accomplish your short and long-term goals. Are you putting away 11% to 14% of income for retirement? That is far more important than having a specific retirement goal. Do you have a particular time once a month to take a look back at your expenses? If not, you could drift off your target budget without realizing it.
Keep track
Over the next few months, rides got progressively longer and faster. Biking gave me more pleasure than I anticipated which made it easier. At the end of every outing I recorded the mileage in a little journal kept in my bike bag. I made a mental note of my average speed. My enthusiasm grew as I kept track of distance and time.
How do you know if your spending is deviating from the long-term trend? Only by looking at it. There are apps that make it easy to track, or you could use a website from your bank or a credit card. Your computer (or, these days, your smart phone) can do most of the work for you. Keeping those records keeps you in control.
Have a support network
Of course you need guidance doing something new. My trainer knew just what tests would uncover my weaknesses, leading to the right exercises. He showed me how to do it without hurting myself. My friend John, an experienced rider, graciously accompanied me to the bicycle store to make sure I got outfitted properly. Beyond that, hanging around with people who do what you want to do makes it easier and more fun. Although I was always at the back of the pack, group rides pushed me while having fun.
The pandemic hit in the middle of this experience. Group events like the charity ride I had planned for my “century” got canceled. It was my Wednesday morning biking buddy Doug who offered to help me accomplish my goal. “I know you have a big birthday coming and that this is important to you” he said. “If you want to get your ride in this year, I’ll do it with you.”
Having advisors, mentors, and friends each step of the way made the goal more likely and more fun. Hanging out with people who have the habits you want to have makes it a lot easier.
Accomplishing the short-term goal
August 15 was a mercifully mild day. Doug and his wife graciously met me early (neither of them are morning people) and she drove us to Buffalo. We had saddlebags full of protein bars and electrolyte tablets. There were four bottles of water for Doug clipped to our bikes and I wore a Camelback. We headed north. I had never seen that stretch of the Niagara River or Tonawanda Creek. It’s beautiful country.
35 miles into the ride, Doug dropped something and didn’t realize it. Stopping to pick it up, a combination of grabbing the front brake a little too tightly and not yet being used to clipping out of my pedals sent me straight over the handlebars onto the cinder path. I scraped my elbow but retained my ego by scrambling to my feet before Doug could catch me lying on the ground. I almost feel bad I denied him the amusement of seeing me dump my bike the first time after getting my clips.
We met Doug’s wife again at about the halfway point for lunch. After 20 or 30 minutes of a delightful homemade picnic, we were back on the trail.
The biggest surprise was losing the ability to hold my head up. I have a mountain biking helmet. While it’s not heavy, those extra ounces apparently add up after about five hours of riding. I had to strap it to the bike and go topless.
We pulled into the parking lot late in the afternoon, tired and sore but excited.
We believe strongly in the value of financial planning. And we believe the way most advisors practice financial planning is deeply flawed. Approached in a more productive way, it can help people accomplish more and create better outcomes.
Powerful long-term goals are about who you want to be, not what you want to have. A financial planner who asks you what you want to spend 35 years in the future and constructs an elaborate graph projecting the way you will get there is focusing on the wrong thing. Projections are good for a few years and that’s about it. I want to be healthy and active in my old age. I don’t know how that translates into measurable capabilities and it doesn’t matter. Knowing that health was my focus help point me in the direction of a productive short-term goal. Quantifying short-term goals informs activity plans.
Habits over goals
Long-term goals provide direction. Incorporating those goals into your daily routine does the work of getting you there. We can do better work for clients talking less about long-term goals and more about habits. Putting savings on autopilot. Regular check ins on assets, liabilities, and cash flow. Incorporating good principles into financial decision-making.
Optimize Today
With the time you save focusing less on long-term goals, we can spend more time looking for opportunities today. Are clients taking maximum value from their employee benefits? Are we identifying ways to save money on taxes? Can we make the next big financial decision a little bit better, find a better deal, save a few dollars?
These are some of the principles underlying our field of vision system. We believe leveraging these principles can help people create the kind of outcomes that are possible the same way they got me to my century ride on the way to being a healthy senior citizen (way off in the future). Too much focus on financial projections and to narrow a view misses opportunities.
Get a complete picture of what’s going on with you now. Once you have determined who you want to be in the future, figure out the next couple steps and habits that will take you in the right direction. Make the most of the opportunities you have today. Accomplish the short-term goals and figure out what’s next.
We believe that’s how you can set yourself up for long-term success – as a series of short-term successes. Spend more time focusing on the next step. Optimize Today.
If you would like to learn more about how you can optimize today with our field of vision planning system, here’s where you can download 10 tips to help you get going. 10 Tips