This month, many of us are glued to our screens cheering on Team USA in the Summer Olympic Games. It’s an emotional roller coaster watching all the Olympians experience triumph and heartbreak.
But while the world watches in awe at the seemingly superhuman achievements of these competitors, it’s important to remember that nobody suddenly wakes up with the ability to land a full-twisting double layout. Innate talent is important, but strong habits and mental toughness are what ultimately drive athletes to the podium.
The same applies to wealth management. True wealth is earned, maintained and grown by forming strong habits and striving for financial fitness.
Financial fitness is much more than a checklist. It’s a mindset—an ongoing commitment to achieving your financial goals and growing your wealth despite challenges in the market or in your life. It requires constant reinforcement, and it’s not easy.
Achieving a state of financial fitness means embodying many of the same traits that define elite athletes:
Jumping into the pool or onto the balance beam before the sun comes up is a brutal but necessary part of training. It’s reported that elite athletes train for six hours a day, six days a week, all year long. This regimen and consistent focus conditions their bodies to grow faster and stronger and ultimately drives their success.
Effective wealth management also requires a keen focus on your goals. It’s an ongoing process of taking stock of your personal priorities and your financial assets. Throughout every stage of your life, your goals evolve—often requiring rethinking or resetting your financial strategy.
Whether you’re managing your estate or planning for the long-term success of your family business, being diligent and proactive can alleviate the anxiety of cementing your legacy.
Before big events, many athletes slip on their headphones to tune out the world around them. They ignore the social media chatter, the competition and the commentary. They are confident in their own abilities and strategy, and don’t allow their emotions to be dominated by others.
In the same way, it’s crucial to tune out the noise and remain disciplined in your financial strategy. This is particularly true when it comes to managing social pressures. A study conducted by the American Institute of CPAs found that about 78 percent of young adults use their friends’ financial habits to determine their own—a staggering thought. Yet this sense of financial competitiveness does not always fade with age, and it shouldn’t derail your focus and energy.
Remaining confident and focused on long-term results can also be challenging during volatile market conditions. The natural world operates in pulses, and staying focused on your strategy is essential to riding out difficult times.
In many sports, the first thing you learn is how to take a hit—the proper way to position yourself to minimize the impact from a punch, a jab or a fall. And in the heat of competition, making adjustments after a blow takes a combination of instinct and acuity.
Rebounding from market and life events is no different. Planning matters. You must be able to pick yourself back up and emerge with a sound financial plan, piece by piece, trial by trial.
This is particularly true if you’re going through a major event that affects your priorities or needs. One of the most challenging, life-altering events you can encounter is unexpectedly losing a loved one. In dealing with a loss, many families must manage the painful emotional recovery while also working through the financial fallout.
Minimizing the financial impact starts with planning ahead. You and your advisor should discuss various scenarios that could impact your finances, and have a plan in place for both expected and unexpected life events.
Every all-star athlete needs a coach. At Wescott, we know that achieving financial fitness also takes a partner. Contact our team to learn how we can coach you through to the financial future you’re envisioning.