I first saw it on YouTube.
In 2023, Simon Richardson, a 40-year old former professional road racer, turned himself inside out to finish a bike race called The Inferno.
It starts near the Caribbean-coloured lakeside waters of Annecy, France. Over two days, The Inferno blazes a painful pilgrimage over the length of the French Alps. That’s almost 500 kilometers long, with about 12,000 meters of vertical climbing.
Stacked together, that would soar above Mt. Everest. It would look down on commercial airlines crossing the Atlantic.
It all sounds as silly as cuddling an angry mountain goat. Yet, foolishly perhaps, I entered the event that head-butted Simon.
During my many months of training for this misguided endeavour, I came to realise something: An ultra-endurance race is like planning your financial future.
As soon as I registered for the Inferno, I had to define my goal and then plan backward. This thin-air suffer-fest took place August 23rd and 24th. I needed to be capable of riding 12 hours a day, in the heat, over some of the toughest mountain passes on Earth. To do that, I researched strategies for success. I didn’t want to become a quivering mess on the road.
I started my training by increasing my mileage and vertical by about 10 percent per week. I added long, hard efforts called intervals. I read science-based publications to learn what I should eat during the event, how often to eat, and how much I should drink.
Sure, shortcuts were tempting. But if I arrived unprepared, I would suffer like a Husky on a scorching Dubai day.
This is much like financial planning.
We need to ask, “How much money will I need and when will I need that money?” Then, based on a backward design model, we determine how to invest and how much money we should invest.
Shortcuts tempt us like cheeky Greek gods. They tout hot stocks, crypto-currencies, private equity and hedge funds. Some investors lose their shirts. Others get scalped. As I referenced here, private equity and hedge funds might appear to dance on mountaintops.
But they’re often mirages created by clever slights of hand. In an ultra-endurance test, index funds leave most of them gasping in their wake.
Nobel Prize winners in Economics recommend index funds. Warren Buffett does too. He says, “Beware the investment activity that produces applause; the great moves are usually greeted by yawns.”
While training for the Inferno, I developed a painful, swollen foot. I went to the doctor. He prescribed ice, rest and anti-inflammatory medication. I was frustrated because this would set me back. I bought a new pair of shoes to give my foot more space, and then I took it easy to allow my foot to heal.
I couldn’t control how soon I would recover. But despite the frustration, I tried to relax. This isn’t any different to a setback in the markets.
Like my swollen foot, drops in the stock market are temporary. But unlike my painful foot, they are blessings in disguise. As I explained with research here, falling markets are good for those who add regular money to the markets. They allow investors to get discounts on the units they’re collecting. And then, when the markets recover, investors reap rewards as their portfolios soar.
Warren Buffett says if you’ll be adding money to the markets for at least the next five years, you should prefer to see stocks drop. That doesn’t mean you should wait for a decline before adding money. Add money whenever you have it and embrace market sales.
The second day of the Inferno started at 5am. With strong headlights on the front of our bikes, and blinking flashers at the rear, we battled the 19km-long Col de Vars in the dark.
I trained for the Inferno with a heart rate monitor. In training, I learned that I could maintain a heart rate of about 137 beats per minute for 11 hours. If I tried to ride at 145 beats per minute, my legs rebelled after 9 hours. If I climbed at 150 beats per minute, my body cried, No más, after roughly 8 hours.
As soon as we started the Col de Vars, I settled into my pace of 137 beats per minute. When temperatures rise, our heart rates do too. But it was cold that morning. As a result, at 137 beats per minute, I could move at a brisk pace.
Yet, every other competitor was leaving me behind.
Like smart financial planning, we need to ignore how others are “performing.” Our friends might have nicer cars and bigger homes. They might boast about earning eye-popping investment returns.
But as I referenced here, most wealthy people buy modest cars and homes. This allows them to invest more money. Much as I learned about my sustainable heart rate, smart investors don’t chase “opportunities” in attempts to beat stock market indexes. They don’t get lured into private equity deals, hedge funds, or the latest hot stock. Instead, smart investors use evidence-based economic science. They stick to index funds. They don’t try to time the market by jumping in and out.
I watched those blinking lights disappearing on the Col de Vars. As tempting as it was to follow, I stuck to my plan. After about 15km of climbing, some of the lights got closer. By the summit, I had caught three riders.
Next, we climbed the highest pass in Europe, the Cime de la Bonette. Sticking to my pace, I caught several more riders. One guy took a nap on a bench. By the summit, at least a dozen had imploded.
After carving down the switchbacks of the Cime de la Bonnette, I pedaled along a flat road to the bottom of another epic climb, the Col Saint-Martin. Snailing my way up, I caught other riders in various states of anguish.
I wasn’t speeding up. I was actually slowing down. But nobody was catching me; I kept catching others.
After 150km, I was struggling up the Col de Turini. I continued, however, to pass riders better than me. By the summit, I finished among the top nine.
On the day’s first climb, peer pressure pulled at too many people.
Whether it’s an ultra-endurance race or pursuit of financial independence, we should set our own pace and ignore the moves of others.
At 54, I might have been the oldest finisher of the Inferno Race France this year. I finished top 10. But was I one of the 10 best riders? Not even close. I did, however, stick to an evidence-based plan. I ignored other people. Despite the pain (my stomach and bowels were like a boiling pot of chili) I tried to embrace my inner Zen.
Your quest for financial independence is no different to this. You will have setbacks. You might not have the highest salary among your peers. But stay calm, consistent and positive. Ignore what others are doing, and stick to an evidence-based plan.
What you do with what you make is more important than what you make.
Andrew Hallam is the best-selling author of Millionaire Expat (3rd edition), Balance, and Millionaire Teacher.