Are you compounding good behaviours?

(Originally posted in 2020)

Today marks the start of summer, and I find myself in the gym training and trying to make “being there” a priority.

Today’s challenge starts with a three-kilometer row, followed by core and strength work. I am not a fan of long rows. It is a relatively simple exercise that requires turning your brain off, putting your head down, and trying to just keep moving.

As class starts, the coach begins by walking us through the basics of rowing. Demonstrating the difference of good technique from poor technique.

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‍The basic mechanics:

• Thrust from the legs, then body, and then arms
• Brace your core for more powerful strokes
• The position of your back should not be falling forward or leaning back

All simple stuff.

He then gives us a stat that I found interesting; he had calculated that three thousand meters would equate to roughly two hundred rowing strokes.

“If your strokes are sloppy, that inefficiency is going to stack up and compound on itself. The difference between one bad pull versus one good pull is no big deal. But, added up over two hundred pulls, and we are talking about a major difference. Poor rowing action will ensure a longer work out and to you feeling more tired when you are finished.”

Before getting on the rower, I mention to the coach that I am all about efficiency. He tells me to watch how the class moves during the first five hundred meters and then again at two thousand meters.

As I objectively observe the class, the difference is staggering. These are all solid athletes who have put lots of time in on a rower. Although the form for the first five hundred looks textbook, by the time we get to two thousand, everyone is cheating on form. They are breaking even the most basic rules of moving efficiently. People get tired or distracted, and the small simple steps start to break down— compounding into a longer, harder workout.

After two thousand meters, the coach smiles at me and walks to each rower, correcting form and reminding us all of the simple basics.

I felt this painted a strong analogy of the work we attempt to do with our clients. First, researching a list of proven best practices. Second, helping clients implement those practices into their financial life, and third, coaching clients along the way to ensure the discipline stays intact.

Like rowing, our best practices are relatively simple. The hard part is sticking to a disciplined plan. Like rowing, the value comes from compounding those behaviours over the next ten, fifteen, twenty, and thirty years.

‍Proven best practices:

• Use low-cost, tax-efficient, and diversified investment portfolios
• Diversify outside of Canada
• Have an automated rebalancing process
• Avoid large cash balances (keep your money invested)
• Build a financial plan with a Certified Financial Planner (CFP®)
• Create a budget
• Stay financially organized
• Stay disciplined (buy and hold, don’t trade, ignore volatility, resist chasing performance)

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