Investing and Dieting - Same Rules, Different Games

My wife and I had the opportunity to do something on our own today and had a sumptuous lunch with a great view. We pretty much consumed our whole day's calorie intake from that one lunch. Guess it's time to hit the gym and swimming pool to make up for the overdose!

It got me into a train of thought about investing and dieting yet again.

My daily budget for food intake is akin to a monthly salary. They both set the opening budget to work within. Everything thereafter is about living within the budget, and/or increasing the budget to work with.

Consider this: My Basal Metabolic Rate is 1,950 kCal.  Given the longer term aim to lose 2 kg a month (~7,000 kCal), the daily aim is then to lose 500 kCal a day. So I have two choices: eat less, or exercise more.  I could either eat no more than 1,450 kCal a day, or exercise 500 kCal and eat up to 1,950 kCal. The answer, as always, is something in between. So, I've taken to exercising 300 kCal and eating up to 1,650 kCal each day.

This has a close parallel to investing.  My monthly salary is $X.  Given the longer term aim to achieve $1.8m portfolio to generate my retirement income upon retirement, the shorter term monthly aim is then to either put aside enough savings from my salary for investment (spend less), or to find other avenues to generate more income to work with (earn more).  The first case of spending less would mean controlling what I spend on - some frugal discipline is needed given all the competing demands. For the second case of earning more, that could be from salary raise and bonus, dividend income, or any other sources of income.

I need to keep my intake within the daily calorie count in order not to gain weight. In fact, as I want to lose weight at a certain rate, it means I need to experience a net deficit.

If I might distill the above thought process therefore, it boils down to:

1.  Establish the end goal - long term aim.
2.  Break that down into more manageable shorter term budget.
3.  Live within the budget.
4.  Grow alternatives to expand the budget.
5.  Stick to the plan.

Slow and steady as it goes, but surely and certainly the end goal will be met. Same rules, just different games.

Good health and great wealth.

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Investing and Dieting - Wealth and Health