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What Michael Phelps and Other Olympians Teach Us About Money

Bob Sullivan

Watching athletes stand on the Olympic podium, sniffling as their national anthem plays, it’s easy to get swept up in the romance of winning a gold medal. After all, stars like Michael Phelps make it look easy.

But here’s what we’re missing as TV viewers: While his races only last a minute or two, what you don’t see are all the years of training and sacrifices that led to the high-profile moments of glory that make us think, “He’s so lucky!”

It’s not unlike the feelings generated by that coworker who always seems to have enough cash on hand to spend her vacation days jetting off to exotic locales around the world, or the friend who’s on track to retire early and spend his days golfing and learning to paint. “They’re lucky,” you might think.

Yet that, too, would be a mistake and a missed learning opportunity.

Turns out, there are a lot of parallels to glean from Olympic athletes about setting financial goals, working toward them and winning—starting with the most important lesson of all.

1. Winning a gold medal takes only a moment; preparing for that moment takes a lifetime.

In many cases, an Olympic athlete’s whole sports career is compressed into a single hurl of a javelin, a vault or a shot. This makes for amazing television drama. But that’s all it is.

In real life, the athletes eat, sleep and drink their sport for years. Each morning, a well-trained athlete wakes up faced with a question: “Do I want to go back to sleep, or do I want to win a gold medal some day?” Consistently picking tomorrow’s goal over today’s snooze is the key to athletic success.

Going for financial gold—that is, affording your dream house, retiring early or whatever is important to you—requires the same discipline to stick to your goals. Your own moment of truth comes each time you consider upgrading your car when your current one works fine, or using most of your tax refund or raise for splurges instead of saving for bigger goals.

Do you really want today’s shiny object more than tomorrow’s financial goal? Answering that question correctly, over and over, is one key to financial success.

2. You’ll fail. Just get back up.

Here’s another truth about athletes: Sometimes, they do hit the snooze button. Sometimes they eat fast food. Sometimes they trip over a hurdle and fall. Despite the lovely commercials you’ll see about dedication, these are still people who screw up.

You’ll trip, too. And I’m not talking about picking up a fancy coffee drink or buying a new suit for a wedding. Those things are necessary to stay happy and balanced, like “cheat days” on a diet. I’m talking about a real fall, like overpaying for a house or wiping out your emergency fund.

The emphasis isn’t on the fall, of course—it’s on what you do next. Do you surrender to what psychologists call “goal release,” and just give up? Or do you treat the day after as a new beginning? Watching the Olympics, it’ll be obvious to you that Americans love a winner, but you know what we love even more? A comeback story. Heroes who suffer a fall from grace and rise again (ahem: Michael Phelps). No matter how dark your days, remember that you can make a comeback.

3. Winning takes real sacrifice, but also real money.

Another cost of Olympic glory that doesn’t come through on the television is the cost. Four years ago, the family of gold-medal swimmer Missy Franklin told the New York Times they spend $100,000 annually on sports-related expenses. Franklin, now a pro, was an unpaid amateur at the time, and passed up an estimated $5 million in endorsements so she could continue swimming at school, according to the Wall Street Journal.

These costs also come with risks. Gold-medal gymnast Gabby Douglas’ mom filed for bankruptcy months before the London games. Swimmer Ryan Lochte’s parents faced foreclosure.

The lesson: When you set a goal, be realistic about what it may cost to get there. Building your dream retirement cabin in the woods only to face runaway expenses can be a disaster. Starting your own business, but failing to accurately predict startup costs can be fatal to your finances. Dreams cost real money—so plan for them.

4. Go for the gold, but have a plan B.

High-profile athletes can score big-money endorsements after the Games. But the numbers don’t favor most: There are more than 10,000 competitors in 300 events. The vast majority won’t win a medal or get endorsements to support themselves or pay down debt.

So while the romance of going for the gold is seductive—and everyone deserves a shot at following their dreams—realism must always ride shotgun. Sure, think about opening that shop or taking a year off to travel. But don’t quit your day job until you have a wide buffer and robust emergency fund, lest that lifetime dream turn into a nightmare.

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