Analogies Between Motor Racing and Retirement Investing

Revving engines, adrenaline-pumping speed, and the pursuit of victory – racing and investing may seem worlds apart, but they share more than meets the eye.

Deresh Lawangee is CEO of EasyRetire (formerly RISE), a fund administration and investment management business fully owned by EasyEquities. He recently experienced the joys of riding in a racing car for the first time with our friends at Pablo Clark Racing. In this article, Deresh relates the thrills and skills associated with racing and investing.

When it comes to the thrill of racing, it’s hard to describe the rush of adrenaline that comes with pushing a vehicle to its limits. The feeling of speed is indescribable – the wind rushing past, the engine roaring, and the sensation of G-forces pushing you back into your seat. Every turn, every straight, and every pass is a test of your skill and the abilities of the machine you’re commanding.

But it’s not just about the thrill of the speed. For racers, there’s a sense of satisfaction that comes from being in perfect sync with your machine. It’s like you become one entity, with your body and mind working in harmony with the mechanical components of the vehicle. Every shift, every brake, and every line taken through a turn is an effort to extract the maximum possible performance from the machine.

Of course, for any racer, the quest for perfection is never-ending. The elusive perfect lap always seems just out of reach, and every race is an opportunity to try and achieve it. The focus required to achieve it is intense, and during a race, your mind clears of all other thoughts except for the task at hand.

There are many parallels to be drawn between investing and racing. Like racing, investing requires a level of skill, concentration, and focus. Just like a racer seeks to extract maximum performance from their machine, investors seek to extract maximum returns from their investments.

And just like the quest for the perfect lap in racing, investing is a never-ending journey towards achieving higher returns. Investors must always be honing their skills, analysing market trends, and refining their strategies to stay ahead of the competition. The focus required for racing and investing may be different, but the intensity and dedication required are the same.

In the heat of the moment, your mind becomes focused solely on the race. All other thoughts are cast aside as you concentrate on the task at hand. The rush of the wind and the sound of the engine become your only companions, as you revel in the joy of the moment.

In both racing and investing, a solid game plan matters. In racing, a driver must consider the track conditions, the competition, and their vehicle’s capabilities before deciding on their approach. Similarly, investors must consider market conditions, their investment goals, and risk tolerance before deciding on an investment strategy.

Both racing and investing involve calculated risks. In racing, a driver may decide to take risks in order to gain a competitive advantage, but this can also lead to crashes or mechanical failures. Similarly, investors must weigh the potential for high returns against the risk of losing money.

Success often requires patience. In racing, a driver may need to bide their time before making a strategic pass, while in investing, investments may take time to reach their full potential.

Collaboration matters in both activities. In racing, a driver and their team must work together to prepare the vehicle and execute a successful race strategy. Similarly, investors may need to consult with financial advisors and other professionals to ensure they are making informed decisions and listening to expert advice.

“To finish first, first you must finish” is a popular saying in racing that implies the importance of completing the race without getting into an accident or running out of fuel. Similarly, when it comes to investing, it’s crucial to have a sustainable and robust investment strategy that can weather the ups and downs of the market and meet your investment goals. Taking reckless risks or making impulsive decisions can lead to big losses and jeopardize the attainment of your investment objectives. Therefore, it’s important to plan carefully, take calculated risks, and stick to your investment strategy to increase your chances of finishing strong.

Continuous improvement is necessary for both racing and investing. Drivers and investors must stay current with changes in the industry and adapt to new trends to stay competitive and successful.

Lastly, it’s true that the best car will yield the best results on track. Similarly, having the guidance of the best possible investment professionals will yield the best investment outcomes.

I would like to express my heartfelt gratitude to the Pablo Clark Racing team for the unforgettable race car experience that I had. From the moment I stepped into their facility, I was welcomed with open arms and was given a thorough briefing on the car and the track. The team’s professionalism and expertise were evident in every aspect of the day. I was amazed at how patient and supportive the team was, even when I made rookie mistakes on the track.

My experience with the Pablo Clark Racing Team taught me that racing and investing are more alike than you might think. Both activities require focus, determination, and a solid strategy to achieve success. Just like in racing, it’s important to stay patient, collaborate effectively, and continuously strive for improvement. With racing and investing, success may feel elusive, but with hard work and dedication, we can achieve the goals we set for ourselves.

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