Marathons and Financial Planning

US Wealth Napolitano |

By: Tom Fletcher, CFP®

With today being the running of the 119th Boston Marathon, it occurred to me that there are many similarities between successfully finishing a marathon and financial planning.When someone runs a marathon, typically they don’t just wake up on Marathon Monday, decide they are in the mood to run 26.2 miles, strap on a pair of sneakers and head out to complete a marathon. Though it can be done, that strategy would considerably decrease the likelihood of accomplishing their goals. Instead success usually depends on months and months of meticulous planning and training for race day. Most marathon runners will tell you it’s also important to plan for hardships along the way that can cause training interruptions such as injuries, inclement weather (especially if you’re from New England), illness, family obligations and scheduling conflicts. With proper training, when the big day arrives, runners will cross the finish line with energy to spare.

Similarly when developing a comprehensive financial plan, it is critical to identify your financial goals and also recognize potential obstacles that can prevent you from crossing the finish line. Nobody wants to suddenly realize that they plan to retire in the next year or two, yet they don’t have enough money saved to do so.  It is important that, each area of your financial life should be examined including cash flow, risk management, income tax planning, investment planning, retirement planning and estate planning. Similar to the elite runners who wear watches and heart rate monitors to confirm their pace, speed, and stay hydrated along the way, in your financial life you want to keep all these areas up to date by monitoring them on an ongoing basis. When considering your overall financial picture it’s important to remember that it is a marathon and not a sprint.