5 Ways that Personal Finance Mirrors the Tour de France
The Tour de France has sucked me in over the last few weeks. Yeah, I know, “just guys riding bikes” – I’ve heard it many times before as I keep coming up empty trying to find friends to discuss all of the inner-workings of the Tour with. Surreal beauty, extreme physical pain, high drama, and tradition make the Tour an unbelievable event to follow, once you get past the pre-judgments. Hopefully, ‘Le Tour’ has sucked in a few 20somethingfinance community members as well. In watching the Tour, I’ve noticed 5 consistent themes that have a lot of crossover with personal finance.
1. The Tour de France is a Team Sport
There are 9 riders on each Tour de France team, however, each team is typically riding to support 1 or 2 riders along the way. Sometimes multiple riders will burn through their energy just to pace and urge a teammate on. In this Tour, we’ve even seen Lance Armstrong, a seven time Tour de France winner, slow down his pace in order to hold off other riders from catching his teammate, Alberto Contador.
How does this compare to personal finance, you may ask? Ask anyone who is married, in a committed relationship, or who has children, and they will undoubtedly tell you that personal finances aren’t limited to the individual. Without a team effort, finances can often be divisive, as married couples often cite financial problems as one of the top reasons for marital problems. Be open, honest, and transparent about your personal finances, and you’ll have a happy team at home. Launch ‘surprise attacks’ (like Contador did in team Astana), and there’s bound to be some tension.
2. To win the Tour de France, you have to be Strong in Every Area
In the Tour, you’ll notice a lot of little races inside the race. There’s a yellow jersey for the overall leader, but also a green jersey for most sprint points, polka dot jersey for mountain points, and white jersey for best young rider. The sprinters fight over the green jersey and the climbers battle over the polka dot jersey. That being said, it’s the overall Tour winner who walks away with the fame and glory and the true contenders for that title are truly good in every aspect of the sport – time trials, sprinting, and climbing.
Personal finance works in the same way. If you’re really good at earning a high income, but don’t have the knowledge about how to protect and grow that income, you’re in trouble. If you no everything there is to know about insurance and investing, but have no money to protect and invest, you’re also in trouble. You must be well rounded in income earning, investing, insurance, credit, and long-terms savings if you want long-term personal finance success.
3. You will Feel Some Pain Along the Way
I don’t know how those guys do it. 21 days of cycling and 3,500 kilometers, with many stages starting in valleys and ending up thousands of feet higher in elevation. Undoubtedly, every cyclist in the Tour experiences extreme mental and physical fatigue and pain along the way. They may get fall off their bike, feel horrible along the way, and have very disappointing days.
The key, and it’s the same in personal finance, is despite personal tragedy, setbacks, pain, and disappointment, you have to have a long-term plan, stay positive, and keep on moving forward, because you never know what the next day might bring. How many people lost 50% of their investment value in the last year, only to pull out and abandon their long-term investing strategy, and then see the market rebound 30% almost immediately?
4. There’s a Whole Lot of Noise – Avoid it
The Tour has more subplots and points of drama than a soap opera. Cases in point: Contador not following team strategy and attacking Lance (his teammate), team Garmin stealing the yellow jersey away from George Hincapie – and gaining nothing in doing so, and Mark Cavendish sprinting past everyone. There’s a ton of talking from the teams, team managers, and media along the away. Ultimately, the teams and individual riders that can get past all that drama are going to be the ones who win – the Tour seems to be at least equal part mental as physical.
In the personal finance world, we’ve all heard about the next great stock. We’ve also heard about all of the bad things going on in the market. And we’ve all been tempted to take a little extra risk when everything is going great. However, letting ourselves be influenced by these external forces rarely results in a winning investment strategy. Those who stay the course on a smart long-term investing strategy typically prosper over those who don’t.
5. Start Young
Seeing 24, 25, and 26 year-olds dominate the sport is disheartening in that I’m just now becoming very interested in taking cycling seriously on a personal level, yet I’d already be considered a geezer in that world – no professional hope for me! Even though they may be in their mid twenties, many in the field began their professional careers in their teens and have been riding for a decade or more. Lance Armstrong, at age 37, is considered to be an elder statesmen.
Most good personal finance foundations are often set an early age. Digging a deep hole of debt, neglecting to save, or not taking your education and career seriously, can result in exponentially more personal finance hurt later in life. Even the best efforts, if not started until the mid thirties or forties, may end up with lackluster results. Start early, and you have a shot at being world class in personal finance.
Tour de France Discussion:
- What other comparisons do you see between the Tour or other sports and personal finance?
- What’s your favorite Tour moment?
- What’s your favorite personal finance moment of glory?