Caroline Ritchie: Slow and steady the way to go

Caroline Ritchie

It was my birthday the other day. Each year as I mull time slipping past, I give myself a new challenge. Not a resolution, which suggests a flawed starting point, but a challenge.

This year, for health reasons, I have changed my menu, and in the words of William Jefferson Clinton who did the same a while ago, "I now eat a plant-based diet". The plants have had interesting effects. Energy and endurance being so amazing that Idecided my challenge is to run a 50km race.

So, mentally steeled for painful, gut busting cardio sessions I dove deep into the ultra-marathon community for advice on training. I had imagined the guys and gals who run 100km races would be sprinting up stairs and thrashing it out at crossfit to get in such supreme shape.

It was a total shock to discover that the exact opposite applies.

You train slowly, very slowly, to get round an ultra race. You must build your aerobic engine at tortoise pace, to go all day and remain below your lactate threshold. My 10km runs have turned into dawdles.

Grandmothers and pram-pushers now zoom past. You leave your ego at the door. You really wonder if you are doing the right thing because it does not feel difficult or dramatic.

Yet every single successful ultra athlete trains this way, gently padding around in what is called Zone 2 for 80 per cent of their workouts, while all the weekend heroes whiz past.

I questioned how I would ever get fast at this.

The answer: "He who wins slows down the least."

It is such a complete analogy to saving money that I am amazed I didn't see it earlier. It is often very hard to visualise the benefit of putting away little amounts when saving for a goal.

This is made harder if the goal is a bit vague, "saving for retirement" and also happens to be around 40 years away.

Things are also complicated when friends seem to do no such hoarding and spend up large, often on depreciating stuff. Saving money has unfortunately become rather uncool, like running very slowly.

We seem to have become a nation of fritter-ers. Tall, strong coffees at $5 a go to give us future hope for the rest of day. Sugar-free Powerade at the petrol station ("Wow two for $6!"). One more cocktail won't break the bank, will it?

Drinking water when all around are sipping on over-marketed beverages might seem tough to take. Saving $10, or $20, or $50 a week may appear fruitless.

But saving is not a sprint and the only way to win here, just like the ultra, is to get your head around going slower than you might think necessary.

Saving $100 every month gives you $130,000 in 40 years with daily compounding (inflation adjusting), and that's just in cash.

In a growth portfolio, you could expect to reach around $340,000, saving that $100 a month.

Sure, 40 years is ages, but this is where time works for you and not the other way around. Starting this in your 50s makes the job much harder.

Your savings engine might build up almost imperceptibly, maybe a few dollars at a time, but it will be worth it, simply look at the numbers.

You still have to make those choices, though, whether to fritter or save.

Remember - every single action you take is completely optional. We are not actually dancing to the tune of some pre-ordained goddess of consumption. Take responsibility. The small steps now might seem trivial, but you'll be the one standing at the finish with the results, and the money.

-Caroline Ritchie is a former AFA, sharebroker & portfolio manager. She runs Investment Stuff, an investment coaching service. Visit her at www.investmentstuff.co.nz. Statements in this column are not financial advice.