Life and investing lessons from picking up a new habit

I hate running. Always have. This is partly to do with having the lung-capacity of an asthmatic squirrel from being desk-bound for a large part of my day. But to be fair to myself, I’ve don’t mind chasing after a ball on a cricket or soccer field, or the frenetic movement on a badminton or tennis court. But chugging along, stride after stride, legs pumping, on a treadmill or on a track, lungs trying to draw in more air than your heart rate allows, with no specific end except a particular distance or a time limit was less preferred to me than say trying to book a train ticket on the IRCTC website.

A few months ago, with trouser waists threatening to go up one more size, and the last memory of a time I played any sport fading, I decided to start, walking. Walking because I assumed my long-standing abhorrence of running would be too difficult to surmount. Knowing that I didn’t do well with “moving without an agenda”, I turned to technology for help. There are plenty of running apps like runkeeper that help track everything from distance, route to elevation. There’s even an app called rockmyrun that plays uninterrupted music that matches the music’s tempo to your speed. Over time, I graduated from the brisk walk to a ponderous run to a decent clip for atleast part of the time. No, this is not one of those inspirational stories of how I went to running an ultramarathon or even a half marathon, I’d die of boredom running that long. However, I noticed a few things that seem to apply to most things in life that are worth doing, including investing.

The Calm Investor | Investing lessons from a new habit

1. Half-begun is well done

When I first decided to try this out, I didn’t don snazzy running gear, strap on fancy running shoes and go bounding into the sunset. I decided to try walking around my apartment complex. No “running gear” just regular hang around clothes, flip flops for the first few days. To see how it felt, whether this was something I could get myself to do with some regularity. Once I’d set a decent walking pace, I felt the need for sneakers and a need to test myself by upping my pace.

Most habits worth instilling, are similar. Trying to do it all at once will seem intimidating and likely to be discouraging. If you’ve never been an investor, but have felt the need to develop a habit, don’t open up a full-service trading account and start buying stocks left, right and center with your savings. Instead, dip your toe in by earmarking a nominal monthly amount and deploy it regularly into a broad-market fund like I suggested here. Focus on just getting started, in some way.

2. What gets measured, improves, in the beginning

I installed the running app to simply track my runs and to have some data to check on to see how I was doing. This is easy to do with almost any phone. In addition, the app has an audio alert that reads out, every five mins (or whatever frequency you choose), total time elapsed, distance covered and your average speed in mins / km. Having a readily available basis for how I was doing meant that I now kept track and quickened my run when the alert told me I was a good 45 secs off my average pace. Conversely, if I found myself struggling at a slower than usual pace, then I know to shorten my run and to take it easy that day.

When starting on any new activity, it helps to track how much of what input has an impact on the output. So, actively tracking the mileage your car delivers, will invariably give you some improvement from being conscious about it. In an investing context, following the scrolling ticker tape doesn’t count as measuring. Measurement here refers to knowing what rates of return your assets are delivering, so you know that the doubling in value in 8 years, of that apartment you bought isn’t actually that impressive considering it’s only a 9% pre-tax annual rate of return, also achievable through much safer Fixed Deposits. 

3. In the longer run, milestones don’t matter when you’re having fun

But don’t make the measurements your purpose. When I first started, I’d be breathing hard by minute 3 of my so-called run, and a little further, coaxing the running app’s electronic voice to check off a milestone in terms of time and distance. As I wheezed and plodded along, feeling like my lungs were on fire, I’d check my phone screen to see if it had died and hence wasn’t reporting the vast distances I’d obviously covered. Over time, it got easier, and I even started enjoying the runs a bit more. And sure enough, I paid less and less attention to the app’s voice, only looking in toward the end of my run to calibrate how I’d done.

How many of us fixate on the scoreboard in our spheres of activity? Salary increases, bonuses, promotions. Instead if we just enjoy ourselves and do our best to achieve flow, we’d enjoy the journey a lot more while the scoreboard would take care of itself. In investing, this means not being driven by the day to day movements of your portfolio or even over the medium term, but to focus on developing a process and using feedback to refine that process. Over the longer term, it’s only worth doing if it’s a lot of fun, and the results take care of themselves

If faced with a habit you know you want to develop, remember to get started in some small way to get your brain used to the idea, measure everything at the beginning to understand how your inputs work, but in the longer run, learn to enjoy the activity itself and let the outcomes worry about themselves

3 thoughts on “Life and investing lessons from picking up a new habit

  • July 3, 2015 at 7:12 am

    Nice article relating a habit to an investment.
    Recently I came across your articles and started realizing that without developing a process one cannot benefit from equity.
    As you had mentioned Beginning is itself a very difficult task, the same problem I am facing too. Every time I decide that this weekend I will start to think over some process to adopt for my investment and track it performance to redefine and refine it. But weekend passes and a week starts.
    Any this weekend too I have decided again to think over to develop my process of investment.

    Thanks for the realization

  • July 3, 2015 at 10:20 am

    Thanks Vikrant. You’ve identified a problem so many of us face when trying to first start investing. It feels like an enormous task and so tends to get postponed. My suggestion is to get started by first allocating a certain amount you’re comfortable investing each month. Then to set up an SIP, whether mutual fund, ETF or stocks and then not thinking about it for atleast a year. Each year, increase the SIP amount by atleast 10% or by the amount your income increases (whichever is greater). The fact that you have realized the importance is half the battle won. Best of luck! 🙂

  • July 3, 2015 at 5:38 pm

    Thanks once again.
    To share with you, I am investing in equity MFs through SIP and satisfied with the returns of around 20% CAGR over 5 Years. But now I want to invest directly in stocks with some specific approach and not by others suggestions.
    Through your article I have realized that developing an approach is like an any habit which requires a lot of efforts to begin. I hope this weekend I will start with it. Thanks for your good wishes!

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