Marathons are not sexy.
Sprints are sexy. Overnight success grabs all the headlines.
And yet marathons win the day.
Everyone wants quick, fast, easy … but quick and fast are not easy.
In the NFL they measure your speed in the 40 but what about the 100? When my team touches the ball I want to know if they can cross the goal line, not whether they can run really fast to a point 60 yards short of the goal line.
In the world of investments they measure your returns by the quarter but what about the measurement over a lifetime? When given the 10-year, 5-year, 3-year, 1-year and quarterly returns, most everyone misses that the quarterly return is the least meaningful. It’s the data we should emphasize the least and upon which we should base the fewest decisions. But investment companies prominently display the quarterly number on the quarterly statements and investors are unwittingly influenced by focusing on a very small stretch of a very important marathon.
I love this quote from Warren Buffett from the 2/3/14 edition of Sports Illustrated. (Volume 120, No. 4)
What’s the biggest mistake people make when it comes to money?
“Not learning the habit of saving early, and then trying to get rich quick. It’s pretty easy to get well-to-do slowly. But it’s not easy to get rich quick.”
I know. Boring, right? Write a book on how to get rich quick and you’d sell a million copies easy. Title the book “How to get well-to-do slowly” and you couldn’t give it away… even if Warren Buffett threw his name on it.
A book like that … and $5 … might just buy you a cup of coffee.