The importance of discipline in investing (and football)


I’ve been blessed to have a long career, both in the financial world and as a football coach here in my hometown of Cedar Rapids. Both investing and football have taught me a lot of life lessons, and about each other, really. Perhaps one of the biggest lessons is the importance of discipline in achieving your long-term goals.

In today’s world, it’s really easy to give into your desires, whims and fears. It feels gratifying in the moment, and it feels comfortable. But is that really what is best for you in the long run?

For the football players I coach, it’s easy for them to spend their afternoons watching TV or stay up late surfing social media. It’s easy to order that double cheeseburger and fries when they go out to eat instead of the healthy option.

For the investors I work with, it’s easy to buy that hot stock on a tip or sell when the press says a recession is coming. It’s easy to reduce your savings contributions and assume you’ll be able to make it up in the future, or ignore the tax implications of a sale and get the money now.

Financial professionals need to instill the long-term value of making difficult decisions in the face of multiple choices, whether that’s going to bed so you’re rested for those early morning workouts or sticking with your IRA contributions even when things get tight. It’s about setting a standard and living up to it.

And let me tell you — it’s not easy. A lot of discipline is boring and frankly not immediately gratifying. Eating a plate of brown rice and broccoli is much less fun than that cheeseburger. Diversifying your portfolio across a wide range of asset classes is less fun than watching your stock values shoot up on the back of a few lucky picks.

Discipline isn’t just a word; it’s controlling your behavior in service of those bigger goals, even when it’s not convenient or fun. It’s consistency in your actions.

Unfortunately, part of building that consistency does relate to correcting unsuccessful behaviors. That’s the “punishment” part of discipline that so many people reflexively shy away from these days, although it rarely needs to involve uncomfortable conversations.

Whether you coach kids or employees, you know you sometimes need to have tough discussions to change course. Throughout my career, I’ve come to realize these conversations often look the same, whether it’s a student-athlete or a professional five years away from retirement.

You’re not practicing with us because you didn’t get your coursework done.

You’re not on track to retire in the way you want because you’re spending too much.

It always hurts to hear when you’re told you’re not living up to the standard that has been set and agreed upon. But how can you improve if you’re not made aware of the issue?

The importance of trust in investing

The key to good coaching, whether it’s football or investments, is trust. If you trust that I have your best intentions in mind, and that I care about you as a person, it’s easier to have those conversations and accept the corrections that inevitably need to be made.

And make no mistake, adjustments will have to be made. One thing many people from teenagers to business owners get wrong about discipline is assuming that if they do the hard work, they’ll be able to sidestep surprises.

That’s of course not the case — nothing in this world is ever guaranteed. But discipline gives you the advantage of confidence and strength to be ready for the unexpected, whether that’s a trick play by the offense or a sudden drop in the market. 

That’s ultimately the difference between a championship team and an average squad, an industry-leading firm and a mid-tier one. When you’re thrown that curve ball, do you respond with poise and confidence or curl up and hope things remedy themselves?

Many times, a lack of discipline doesn’t reveal itself until those adverse moments. When the market is hot and money is cheap, it’s easy to follow your fancy and throw money at speculative investments in the hope of big returns. It’s only when things take a turn for the worse that you see who was really disciplined in their investment approach.

There’s no doubt about the fact that discipline is hard, whether it’s on the field or on your account screen. But living the life you want is worth the effort. •

David Ernst is a partner with Cedar Point Capital Partners, a financial life planning and fiduciary wealth management firm in Cedar Rapids.

Cedar Point Capital Partners is a fee-only, Registered Investment Adviser. This article is solely for informational and educational purposes. Investing involves risk and possible loss of principal capital — past performance is no guarantee of future returns. No advice may be rendered by Cedar Point Capital Partners unless a client service agreement is in place.