Goal Based investing lessons from my morning walks

One of the good habits that I have managed to cultivate over the past several years is to go for a fairly invigorating morning walk daily. In fact it has become so much of a habit that I do it irrespective of where I am – normally in Hyderabad now and Chennai before this as my residence but also in Australia, US, Kuwait, Kolkata, Bangalore and many others. My running shoes are one of the first things that I pack and unless I am really incapacitated in some manner I normally use them everyday. For the last two years, I have been using this Application “Runkeeper”, which keeps track of your performance as well as lets you set your own goals and tells you how you are doing against them.

On my flight from Mumbai to Kuwait yesterday, I was thinking of the last two years and reviewing some of the past data stored in the application. Overall the number of days I walked was about 700 out of a possible 730, the distance covered was about 4500 Kms, average daily coverage was between 6 and 7 Kms. I had also met my goal in all the months that I have been tracking the walks in the application. However, more interestingly it struck me that my goal based walking and how I had implemented it had some very important lessons for goal based investing. In this post I wanted to share these principles with my readers as I am sure they will find it to be of immense value.

My first principle of walking is the discipline that I try and put on the regularity. Unless it is practically impossible to go for a walk, for unavoidable reasons, I never miss it. When I started many years back, it was a struggle to keep up with this kind of discipline, but over the years it has got progressively easier and now it is a habit. For goal based investing it is equally key to ensure the regularity of investments. It has to be done every month, not in a whimsical and sporadic manner.

My second principle of walking is that I have a goal every month and set it at a level which is challenging but possible to achieve with some strain. If the goal is too easy then there will be no charm in achieving it. If it is too hard then you will disengage with the goal after some time. Over a period as your capability gets better, you can increase your goals. For example, I started with a goal of 120 Kms per month two years back and have now increased it to 150 Kms per month. In the next year I have plans to look at 180 Kms per month. In investment too, it is important to have goals that you can achieve without feeling acutely constrained by it. Again as in walking, you can start with a level of investing and then keep increasing it over time as your capacity for earning and investment undergoes an improvement.

My third principle of walking is to do more than my regular quota whenever possible. As per my current goal of 150 Kms per month, I need to walk 5 Kms everyday. However, if I plan my schedule like it then it is very unlikely that we will achieve the goal. This is because it is always possible for something unexpected to happen which will not let me go for a walk on certain days of the month. Last month in Kuwait, it rained unexpectedly for 3 days in the morning and these were heavy rains too. In a way this was totally unexpected but as I normally have some buffer I was still able to achieve my goals. In general I try to do between 6 and 7 Kms everyday though the average target is 5 Kms. Similarly in investment, you can try to invest more in a month when you get surplus money. There can be times when there are unexpected but critical expenses that you simply have to cater to. Your ability to invest more when possible will help you achieve your goals.

My fourth principle of walking is to avoid going for a walk when the circumstances are hazardous and to walk at a speed that is consistent with the terrain. For example, in Kuwait last month I avoided going out on the days it rained as it would have risked injury, with the possibility of missing more days. Even after the rains had stopped I started my walks with reduced speed as I wanted to be cautious. Similarly in investment, you need to check the environment before you invest. Putting money in SIP every month without looking at the market situation is not very sensible. Especially for equity investments you will need to be very mindful of the value you are buying it at.

My fifth and final principle of walking is not to overreach myself. Just because I am able to do 7 Kms a day I should not keep my target at 210 Kms in a month. This will really make me dependent on everything being ideal conditions, which is never the case in real life. Similarly in investment, it is important to have some leeway and not reach a stage where your last 100 Rs is accounted for. In order to be super efficient, do not get into a financial constraint that causes stress.

I hope this post has been useful to all the readers. Health is the best asset we can have so while we look to be financially secure and independent, we must try to maintain our health the best way we can.