Last year, just before the pandemic hit, I learned to surf at a stunningly beautiful retreat in Costa Rica. It was an adventure that left me forever changed, and taught me far more than just how to catch a wave.
Recently, I traveled to Hawaii and attempted to ride the waves once again. It felt great to embark on a new adventure after months of lockdown and uncertainty, and of course the experience provided some inspirational wisdom. You’d be surprised how surfing lessons can relate to financial ones.
Lesson one: Lean into being uncomfortable
For this surf experience, I was “on my own” in the ocean. No constant encouragement from fabulous instructors to make me comfortable. Just me and the sea turtles, who totally know what they are doing. No safety net made me extremely nervous about wiping out.
In investing, you may be scared about losing money. It’s okay to feel the feels, since wipeouts can happen - although we rarely hear about it. No one brags about money failures at dinner parties. And the most spectacular failures happen when trying to “time the market”.
Successful investing is not about trying to time the market. Time spent IN the market is what’s important. Successful surfing is not about trying to time every wave perfectly. Time spent IN the water is what will help you catch the great waves.
So keep in mind, you will be scared. You will want to, as surfers like to say, bail off the board. It might seem awkward. Do it anyway.
Lesson two: Conditions are not always going to be perfect
Market conditions can seem scary and unpredictable. Maybe the economy is in a recession. Maybe unemployment is high. Or maybe it’s the opposite and conditions appear “too good to be true”.
Circumstances are never going to be perfect the moment you decide to invest. When I was in Honolulu, I surfed in the drizzling rain. Even though the weather was sketchy, I went for it. And guess what? I hooked some great waves. I witnessed a marvelous rainbow.
Sometimes you will be faced with stormy market conditions. Move forward and ride the waves. Get out on your board or you’ll miss the rainbow.
Lesson three: Trust your instincts. (Most of the time)
I went surfing in Maui at a beach break called the Cove. A local surf shop gives lessons in the same area. This made for some cramped conditions on the waves. Occasionally I knew it was over packed and the time was not right for me to be fighting for a spot.
When it comes to investing, especially active investing, a trade can be “too crowded” and it’s best just to sit it out. I have no desire to get hurt by rogue amateurs in either surfing (or investing).
I adjusted my surf plan at the Cove by going early in the morning, when not as many lessons were on the water. The same theory applies to certain kinds of investing. You typically find the best investment returns in unpopular asset classes or inefficient securities.
One caveat to this approach: Sometimes the waves are jammed because it is 100% the best time and place to surf. And the waves are bountiful and abundant. Everyone can easily ride together. An investment parallel? Low cost index funds.
Lesson four: Plan your dismount
In Hawaii, there is a lot of reef, which makes for gnarly waves. However, it is crucial to fall sideways off your board. If you jump off feet first (perpendicular to the water) you’ll tear up your legs and feet.
The same lesson applies to a concept called “wealth decumulation.” Folks can hurt themselves by not having the proper guard rails around how they spend their portfolio in their retirement years. They diligently saved and invested, but have no distribution strategy upon reaching financial independence.
Don’t make the mistake of retiring without a plan. Getting off the board safely at the end of a ride is just as important as getting up.
Lesson five: Ask the experts
One last lesson: seek out professionals with your questions. When I was in Honolulu I paid a local beach pro to help me “remember” some of the basic techniques I needed to get up on the board.
When I got to Maui, I made friends with a few of the local surfers (and instructors) in the water while waiting for the swell. They pointed me towards the best waves and away from the dangerous breaks. They saved me a tremendous amount of time and energy.
The other surfers out on the water want you to succeed because your success is to their benefit. Everyone wins when the waves are great and injuries are avoided. Surfers take great pride in helping each other to be better.
I like that my success is dependent on my clients' success. I especially enjoy when clients are curious and open to ideas, even when they are already smart and savvy about investing.
It’s always more fun to carve up a “party wave” as a community.
Hang ten, TruWealthers
The bottom line from this experience? Enjoy the ride. There is nothing quite like the feeling of getting up on your board and riding a wave all the way to shore. Surfing has taught me so much this last year, including you are never too old to start something new.
Being able to take a moment to savor the journey of surfing was enlightening, and different than my trip to Costa Rica. I wasn’t so obsessed with learning how to surf. Instead I was focused on enjoying surfing.
The same idea applies to your money. When you have a deep appreciation of how true wealth has nothing to do with your bank account and everything to do with your mindset, you can truly enjoy the richness of life.
Mahalo, my friends. Live a wealthy life.