How the Racetrack Lesson Applies to Retirement
Have you ever driven a car at high speed around a racetrack?
I have a friend who has done so many times, and he shared a great lesson that can be incredibly useful when applied to many other aspects of life including investing.
He said when you drive around a racetrack, your margin for error decreases as your speed increases and you must have a definitive plan if something goes wrong. A critical strategy is to always keep your eyes on your target, or where you want to go.
That seems simple enough.
Inevitably, weather conditions and fuel spills create tests for all drivers. You’re humming along feeling confident on a straightaway when all of a sudden, as you head into a turn, you hit a fuel spill and your car spins out of control toward the wall.
What follows is what all inexperienced drivers do: they panic, their focus changes, and their eyes get locked in on the wall they’re trying to avoid.
When my friend experienced this for the first time, his instructor, who was seated next to him, simultaneously grabbed and turned my friend’s head while yelling “focus on where you want to go!”
Amazingly, when my friend snapped his head back and adjusted his focus in the direction of the path of the track, the car responded and he steered back into control and avoided any contact with the wall!
The lesson for my friend: when in danger, don’t stare at the wall you’re trying to avoid. Instead, remain focused on the track and where you want to go.
Why am I sharing this story with you?
Because I believe the path to investment success, your long-term financial health, and a fulfilling life is littered with “fuel spills,” each of which has the potential to grab your attention, influence your mindset, change your focus, interrupt your ingrained successful habits, and thus, tarnish the outcomes you have worked so hard for and deserve.
If you have your eyes and ears open on any given day, you know how much more challenging this has become with 24/7 “news” on dozens of media outlets and devices.
The days of watching Walter Cronkite, often cited as “the most trusted man in America,” on the 6:00 p.m. news for your daily dose of information are over.
It seems as if everything today is “Breaking News,” and each dose carries the potential to interrupt your successful habits, and throw you off your carefully chartered course.
Essentially, you have two choices. You can do what Dan Sullivan of Strategic Coach, has done. He eliminated television and hasn’t watched anything for several years. Instead, he’s a voracious reader.
As most of us know, the news media must present the events of the day in a manner that repeatedly gets our attention, so there are varying degrees of crisis. However, each is reported as new and “different this time.”
Short of eliminating television completely, your second choice is to vigilantly guard your confidence against all forces competing for your attention including all forms of media, and friends, family, and co-workers who may very well have conflicting mindsets and biases.
There are many parallels between race car driving instructors and financial advisors. You won’t find an advisor who will physically grab your head and turn it, but every time there is a “crisis” of some degree, your advisor can help you gain perspective and keep focusing on where you want to go.
Just like the positive outcome my friend experienced when he adjusted his focus away from the wall he was about to crash into and back to where he wanted to go, condition yourself to remain focused on the long-term outcome you want and watch all the good that will hopefully come as a result.