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Why Financial Planning Is Similar To Keeping Fit

By Timothy Ho

Why Financial Planning Is Similar To Keeping Fit

If you know how to keep your body healthy, then you already have what it takes to manage your personal finance well.

There are many parallel between the process of good financial planning and keeping yourself fit and healthy. Since most of us would have some basic ideas on what it takes to keep ourselves fit and healthy, it is easier to relate keeping fit with financial planning.

So what are some things about financial planning that we can learn from trying to keep fit? Let us share a few insights based on our observations.

It Takes Time

Whenever we browse through the cover page of Men’s Health, we will always find a captivating headline such as “get a beach body in 6 weeks” or “4 ways to get stronger in 15 days.”

These are headlines that are meant to convince you to buy the magazine. They entice you by promising you a shocking result that can be obtained within a short period of time. It probably works well. Otherwise, these magazines wouldn’t be using the same trick months after months, years after years.

The same approach is used for many investment seminars. Workshops such as “how to earn a 5-digit monthly passive income in one year” or “how to become a profitable trader in 10 days” are common. Nobody wants to be a millionaire in 20 years. They want to become rich quickly, and preferably, easily.

To get a healthy and fit body, we must develop the right habits over a period of time. Trying to achieve it within a span of 1-2 months is not realistic. Likewise, wanting to gain financial freedom within 2 years after having spent our entire lifetime spending recklessly is wishful thinking.

It Takes Discipline

Professional athletes will be the first to tell you that maintaining their body in tiptop condition for their sport takes discipline. You have to train hard, eat right and rest well. And you have to do that for many years, unless you don’t mind having an early retirement.

When it comes to financial planning, we need to have financial discipline. It takes effort to have a monthly budget and sticking to it. It takes discipline to save and invest your money regularly. You need to learn and condition yourself to say “no” to temptations that do not fit within your plan. For example, you might have to give up on that annual holiday so that you can attain your financial goal.

Read Also: 6 Ways You Can Enjoy Your Dream Vacation Without Feeling Guilty

It Takes Education

Why do we know that water is better than coke for our body? Why do we know that a grilled chicken breast is better than a fried chicken drumstick? Simple. We know because we are educated on these matters.

When it comes to financial planning, we dare say most people know very little and that becomes a problem. How can we make better choices for ourselves if we do not even know what these products are?

One way is to get a financial advisor to help us (just like you would engage a personal trainer). However, most of us do not pay our financial advisor in the same way we pay our personal trainer. Rather, we expect them to provide their time and advice to us for free.

Since financial advisors need to earn a salary for themselves, it is no surprise that a conflict of interest matter arises. Advisors are given high commission by insurance companies for selling their products. This in turn means that we can’t always trust them as much as we would prefer to.

You Have To Take Charge Of It Yourself

Do you blame your doctor or your personal trainer when your health deteriorates? Or maybe your friends for having introduced you to unhealthy food that you shouldn’t have ate? Of course not.

Most of us are logical enough to understand that we are responsible for our own health and well-being.

Strangely enough, when it comes to personal finance, we are always quick to push the responsibility to others when things do not go as planned. We blame our financial advisors and property agents for the poor choices that we have made. We blame the government for not taking care of us. We blame the economy for our mistakes. Sometimes, we even blame our friends for introducing the wrong stock.

Basically, we blame everyone else but ourselves.

Every financial decision, be it good or bad, was made by us. We decided not to buy health insurance. We decided to overpay for that investment-linked product. We decided to follow that stock tip our friend gave us and put all our money into it. We decided that paying $1 million for that condominium unit was a good idea. We decided that we would be better off investing our own CPF money.

Personal finance is…well, personal. It’s your own hard-earned money. You decide how much you want to spend, how much you want to save and how much you want to invest. And just like our body, we are responsible for our own finances. So if you know how to keep yourself healthy, you will have what it takes to keep your finances in check.

Our suggestion is, stay up-to-date with personal finance matters by reading our articles.

Read Also: Why We Need To Stop Embracing Conflict Of Interest Advice In The Financial Sector

 
Timothy Ho
Timothy Ho

Timothy Ho is co-founder of DollarsAndSense.sg, a personal finance website that aims to help people make better financial decisions. He is a big fan of empowering ordinary Singaporeans with the right financial knowledge so that they can make better and more educated decisions for themselves.