On 26 July, the 2024 Summer Olympics kicked off with an elaborate opening ceremony in the host city of Paris.
Team GB’s 300-plus athletes arrive ready to compete in 26 sports over 17 days of intense competition and after a lifetime of preparation.
With the whole world watching, Paris 2024 will look to showcase the very best of the modern Olympic movement and its philosophy of body and mind in balance, the joy of effort, and the value of respect and social responsibility.
But the Games also has a lot to teach about long-term financial planning. Here are just five key lessons to take on board now.
1. The importance of long-term dedication
Tom Daley achieved Olympic success early, becoming Team GB’s youngest Olympian when he competed at Beijing 2008, aged just 14.
While this might not seem like an obvious example of long-term dedication, he started diving at the age of 7. By the time he made his Olympic debut, he’d been building up to that moment for half of his life.
Your long-term financial plans will also be a lifetime in the making.
Just as Daley knew what he wanted from an early age, and worked hard to make his dreams come true, taking the time to think about your dream retirement as early is key. Once you know what you want your future to look like, you have a goal to aim for and an investment term long enough to hopefully see the gains you need.
2. Patience and persistence are key
Like Tom Daley, team GB gymnastics bronze-medal-winning sisters Jessica and Jennifer Gadirova started young. They were just 16 years old when they competed at Tokyo 2020.
After battling injuries in recent years, the pair missed out on selection for Paris 2024. They still, though, manage to embody the Olympic spirit.
Jess recently told the official Paris 2024 website “It’s only a bump in the road. It’s difficult but it also gives us the fire in our bellies… It’s really gutting, but we’re still young and have a bright future ahead of us”.
It’s important to remember that your plan might experience bumps in the road too.
Recent years have shown how global events can lead to short-term stock market volatility, while life events and milestones might also mean you need to revisit your plans and re-evaluate your priorities.
Ignoring the noise and focusing on your long-term goals is key.
3. “Marginal gains” can soon add up
Despite Chris Boardman’s gold in Barcelona back in 1992, British cycling was in the doldrums when Dave Brailsford took over as performance director for Team GB in 2003.
He would go on to oversee an incredible period of Olympic success. Great Britain topped the cycling medal table in 2008 and 2012, making household names of Sir Chris Hoy, Victoria Pendleton, Sir Bradley Wiggins, and Laura and Jason Trott.
Brailsford adopted a concept of “marginal gains”. By breaking a process down into its constituent parts and then improving each part by 1%, it’s possible to arrive at a significant improvement when you add each 1% gain together.
It’s a philosophy that you can take into your long-term financial planning.
Consider the effect of increasing your pension contributions by just 1% throughout a decades-long investment. You’ll increase the size of your pot, and thereby the potential for higher returns, but it’s the power of compound interest that could really make a difference.
Compounding is effectively interest on interest and can have a snowballing effect on your fund. All you need do is stay calm and keep your funds invested.
As US investment guru, businessman, and non-Olympian Charlie Munger famously said, “The first rule of compounding; never interrupt it unnecessarily.”
4. Always consider the “What ifs?”
Training for a four-year cycle (known as an “Olympiad” and used, rather than years, to mark time in Ancient Greece) isn’t easy.
A lot can happen in four years, and as we have seen, training begins many years before the lead-up to any individual Games.
Coaches will work closely with their athletes to examine myriad “what ifs” and mitigate their effects as a kind of protection and contingency.
Stability is the bedrock of a long-term financial plan and that means being able to withstand shocks. We might help you to do this by managing the “What ifs”. We might do this through careful budgeting and cashflow modelling, but also protection products. These can help cover lost income or provide for your family if you pass away.
“What ifs” are sometimes painful to think about but planning for them now (alongside contingencies for if they aren’t needed) is vital for your peace of mind, and financial and emotional wellbeing.
5. Everyone needs a good team around them
One thing that Team GB athletes all have in common is a great team of support staff from coaches to trainers to family and friends, making sacrifices and cheering them on.
At Jane Smith Financial Planning, we are coach and support staff to all of our clients. We can offer advice, encouragement, and reassurance, giving you peace of mind that you’re on track to your dreams, whatever they may be.
Get in touch
If you have any questions about your gold-medal-worthy financial plans, speak to us now. Please contact us on info@janesmithfinancial.com or call 01234 713131.
Please note
The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Levels, bases of and reliefs from taxation may be subject to change and their value depends on the individual circumstances of the investor.
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