The Mutual Fund Analogy

Lately, I've been reading a financial self-help book called The Wealthy Barber.  As a self-proclaimed financial illiterate, this publication has effectively opened my eyes to not only the possibility of a prosperous retirement, but also to the fact that it's not hard to achieve with a bit of discipline.

The author, David Chilton makes an excellent comparison between the "You've made it big" mutual fund savings, and just a general no risk, minimal interest savings account. On one hand, a savings account functions as a vessel to safely tuck money away for another day, but it never really amounts to anything on its own. The saying "You get out of it what you put in to it" applies well to a savings account. On the other hand, a mutual fund is awesome because of it's ability to generate compound interest over time, leading to an incredible amount of potential capital gain in the long run. Mutual funds, because of their long term investment nature, are relatively unharmed by fluctuations in the market, because a market drop means you purchase more shares at a lower cost, meaning you'll get more back later on when the market inevitably rises once more! As long term savings go, I've learned that it's hard to beat a well selected mutual fund.  In essence, a mutual fund will put your own money to work, amounting to greater amounts of money over time. A savings account will not.

By now, you're probably wondering how the heck this relates to you (who knows, it may be time to reevaluate your long term financial plan, too), and to strength training as a whole. But trust me, it will all make sense soon enough! In both instances, mutual funds and savings accounts represent one's body. Still following? The intensity, frequency, and volume at which you train will dictate the performance of the accounts. However, the big difference between the two is the interest the mutual fund will generate over time, which is represented by striking the right balance of the above three variables (intensity, frequency, and volume).

You see, I look at the savings account as something that everyone has. When you or I just head to the gym and "work out" without any plan or program in mind, we are doing our bodies a good service because we're getting up and moving around. By the end of the workout, we will have invested a few bucks in our savings account. Four days go by, the week is filling up with social obligations, imminent work projects, and family affairs. We make time to go to the gym again, but have to cut it short "because there wasn't enough time". We still exercised, we still "invested" in ourselves. The big issue, though, is that we let four days go by. Within that time, the money we invested in the previous workout had to be withdrawn again, because we had other bills to pay that would have been avoidable (Ol' atrophy strikes back!). Over time, even though we exercise, albeit infrequently, the likelihood of actually creating savings that amount to something meaningful (in this case quality movement skills and strength) is not good. Just like dipping in to one's savings to pay off credit card bills isn't a good idea, letting too much time go by, exercising at an intensity level that won't encourage the body to make new adaptations, or exercising too little (or sometimes too much), will never result in meaningful results!

Without a concrete strength training program that strikes a balance between proper training loads, frequency of training sessions (number of sessions/week), and amount of volume (total reps) performed in a given session, that savings account won't amount to much. Let's say that a person has 5 hours per week to devote to training. Their goals are health, movement quality, and general strength to help promote independence in their later years.

-Those five hours could be allotted to time spent on steady-state "cardio"-endless treadmill, stairmill, or elliptical sessions.

-They could also be devoted to five hours of strength training on five different days-broken up in to body parts; Day 1:Chest/Biceps; Day 2:Back/Triceps; Day 3: LEG DAY! Day 4 and 5: See day 1 and 2 (If this sounds like a ridiculous way to set up a training program geared towards improving movement quality and absolute strength gains, you'd be right).

-Another possibility is doing total body strength training for three of those five hours, and some kind of metabolic conditioning (kettlebells, interval sprints on a track, with a sled, or on a bike, or playing a sport that is enjoyable!).

Let's say our 5 hour/week person decides on the third option (probably the smartest for a person with their goals). Over a period of time, with a program that is consistently logged and tracked, the money they are investing in their mutual fund will begin generating interest that compounds itself. Strength gains will be consistent in the present, but it's the long term investment that will be the most meaningful in the end!

The moral?  Create a mutual fund out of your training. Life will inevitably get in the way at times, just like the market fluctuates. But if you get one flat tire, you won't go and stab the other three just because, right? NO! Keep purchasing your shares, even when the going gets tough, because the consistent investment in yourself will pay off in the long run. A wise person once questioned, "Do we get old because we stop moving? Or do we stop moving because we get old?" Likely the former. Invest in your future, and get physically "rich" slowly, just like The Wealthy Barber!