The Capitalist Investor - Episode 57

Hundreds of people show up at gyms across the country on January 1st because their new year’s resolution is to eat better and lose weight, right? But what about your financial fitness routine? Are you going to maintain the results you’ve achieved with your finances? Or are you going to set and reach new goals? In this episode of The Capitalist Investor, we share 10 ways you can kickstart your financial fitness routine. Get your finances in the best shape of your life.

Outline of This Episode

  • [1:28] The importance of financial fitness
  • [5:27] #1: Recognize that everyone’s situation is unique
  • [7:13] #2: Find a trainer to hold you accountable
  • [9:18] #3: Document your starting point
  • [10:40] #4: Identify your goals
  • [13:48] #5: Trim the fat from your budget
  • [15:47] #6: Track your progress
  • [18:17] #7: Establish a routine
  • [21:42] #8 Regularly workout every element
  • [23:44] #9: Refuel with regular research
  • [26:24] #10: Pace yourself and be patient

Everyone’s situation and goals are unique

You need to remember that everyone needs their own investing strategy because everyone’s goals are different. Everyone’s financial fitness journey is going to be different. Some people have $5 million that won’t last through their retirement and others have $500,000 and will be just fine. You can move the goalposts and do what is necessary given your unique situation. Sometimes it’s easier to reach your goals when you have a trainer—like a financial advisor—to hold you accountable.

Know where you’re starting to get where you’re going

You need to have a financial plan in place. You need to map out your assets, income, and expenses. Recognizing where you are now is an important first step and gives you the motivation to set realistic goals. Once you have your starting point clearly defined, you need to do some goal-setting.

Write your goals down with pen and paper and look at them on a regular basis. You are more likely to stay on track and hit your goals this way. You can’t do it all at once, it takes small steps and it’s a slow process. Your goals will dictate your financial plan.

If you have $800,000 in your account and want it to grow to $1 million by the end of the year, that’s outside of your control. But you can control how much you spend, what you save, the lifestyle you live, etc. Once you know your starting point and have set realistic and obtainable goals, you need to track your progress. Listen to hear what we recommend!

Trim the fat from your budget

Look at your credit card statement: How much are you spending that’s wasted? Are you going out to dinner too much? Have you been double-charged for purchases? You need to be tracking your expenses. I had $10,000 of overcharges on my cards this year that got missed because I didn’t heed this advice. From here forward I will be double-checking my purchases monthly to make sure this isn’t happening. Don’t wait until the end of the year to do your due diligence. There are always areas of spending that are being wasted that you need to cut back.

Refuel with regular research

The amount of money we spend on research—and even the due diligence we do to choose the right research firm—no retail investor will be able to replicate. We’ve built a solid research base for our firm.

If you’re trying to do research on your own, vet your sources. Recognize that their goal may not be to provide you with the facts. For example, Money magazine is trying to sell subscriptions, so getting your research from them may not be the best idea.

The bottom line: Be careful where you’re getting your research from. Figure out a resource you have confidence in—like a financial professional.

Pace yourself and be patient

Investing for retirement is a long-term game. You HAVE to be patient. Sound financial health is the result of diligence and sound habits. Don’t set goals that you can’t control and reach. No one loses 50 pounds in a month. Nobody makes 50% annualized returns all the time. But if you take the steps to heart and focus your efforts, you’ll be one step closer to reaching your financial fitness goals for 2021.

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Keep Listening to The Capitalist Investor:
Episode 8:
Special – Coronavirus and the Economic Shutdown, Ep #8
Episode 26:
Joe Rogan Embraces Capitalism, Ep #26
Episode 41:
The Rise of Sports Betting and the Ways to Play It, Ep #41
Episode 9:
5 Behavioral Finance Errors to Avoid Making With Your Strategy, Ep #9 
Episode 27:
The Bubbles of this Crisis – Employees and Commercial Real Estate, Ep #27
Episode 42:
The Allure of Investing Apps Like Robinhood and Their Impact on Investing, Ep #42
Episode 58:
The January Effect – Fact or Fiction? Ep #58