Early Retirement

5 Personal Finance Lessons from Short Track Speed Skating

You can learn a lot about personal finance from this Olympic sport

Maybe it’s because I grew up in the sunny southeastern United States, but I’ve always found the winter Olympics to be captivating. Everything feels so exotic and novel to me. But the sport that produces the biggest adrenaline rush, in my opinion, will always be short track speed skating.

This series of events takes place on a small oval-shaped track. The races are very quick: the 500m men’s race finishes in about 40 seconds and includes aggressive attempts to pass competitors.

But the stakes are high. The close quarters and centrifugal force at the turns frequently result in crashes that completely remove skaters from the race — razor-sharp skates awry.

Short track is simultaneously beautiful and chaotic.


The 5000m relay is the longest short track event, and involves national teams rotating skaters into the event every 100m. There’s no baton to pass, but the skater entering the race receives a push from the exiting skater.

At my home site, Semi-Retire Plan, I write about investing, decision-making, and early retirement. I’ve realized that the short track relay event is, in many ways, an excellent metaphor for our pursuit of personal goals — especially financial goals.

Let me explain how.

1. Work hard now for a chance to receive the reward later

Any Olympic athlete will spend years training for the chance to compete at the highest level. Athletes must prepare their bodies strategically and follow strict diets.

Even then, there’s no guarantee of earning a spot on the podium. The 2018 winter games in Pyeongchang, South Korea featured nearly 3,000 athletes — but only around 300 gold, silver, and bronze medals were awarded.

For many athletes, just qualifying for the games is the highlight of their athletic careers.

There’s a similar theme in retirement planning and building wealth. It requires years, usually decades of diligent preparation.

I would argue, it’s healthy to view retirement in a similar way to how the qualifying athletes view qualification for the Olympics. Being financially prepared once you reach retirement age is an achievement in itself! There’s value in realizing that you don’t have to be on the podium, or be on the Forbes billionaires list, to have accomplished something meaningful.

For both athletes and investors, the pursuit of the reward offers excitement and personal growth along the way. The cliche applies here — it’s a journey, not just a destination!

2. Reducing “drag” matters

Apolo Anton Ohno didn’t skate while wearing cargo shorts.

Speed skaters wear strategically designed uniforms and helmets to allow free movement and reduce drag as they glide around the track. Tenths of a second can be the difference between being on or off the winner’s podium.

Likewise, the “drag” from high investment fees can have a noticeable effect on your portfolio over time.

Consider if you invested $10,000 in an exchange traded fund (ETF) for 30 years and that you average 9% growth per year. Let’s compare if you had an annual expense ratio of .05% (Option A) versus .75% (Option B).

So, we’ll use annual compounding on 8.95% net growth (for Option A) and 8.25% (for Option B).

After 30 years, Option A yields $1,350,425.14 and Option B yields $1,186,111.78.

In both cases, your efforts are rewarded with growth and over $1 million. But Option A leaves you with 12% more money — a difference of over $164,000. That’s enough of a difference for you to retire a few years earlier or sleep a little easier at night.

A 0.7% larger annual expense ratio caused a $164,000 difference. Even a little bit of drag can significantly affect the final results!

3. It’s a team effort 

Even in the so-called individual races, Olympic athletes are representing their team and their nation. The national teams train together and inspire each other to achieve their personal best performances.

When watching on TV, some of the most touching Olympic moments are when a coach, spouse, or child gets to celebrate victory with the athlete. The athlete couldn’t have reached their peak without the help of the people who care for them and support them.

Similarly, you shouldn’t go about your financial planning all alone.

Even if you’re not a personal finance hobbyist, you can gain a foundational financial understanding from bloggers, books, and podcasts.

Fiduciary financial planners can help you find the right asset allocation and insurance policies. Tax professionals can advise on account types with withdrawal strategies. An attorney can help you create an estate plan. Discussions with your spouse can create opportunities for meaningful conversations and can help bring your family into alignment on future goals.

Seeking multiple qualified opinions will help you optimize your financial planning and can reduce the chances of a significant mis-step.

4. Sometimes you need an extra push

In the 5000m relay event, teammates “tag in” to the race by skating onto the track and receiving a strong push in the backside from their counterpart.

The push off not only serves as a transfer of eligibility, it also helps the new skater quickly accelerate to top speed.

In your personal finances, it’s okay to need a little push from time to time, too.

This push can come in many forms. Maybe you need a vacation. Maybe you need to save up some “fun money” so you can blow off some steam. Maybe you need a friend to show you some tough love and hold you accountable with your budgeting.

On your financial journey, you’re likely to experience some fatigue. Working, hustling, and staying the course is hard and it’s okay to need a break. You’re no less of a financial “Olympian” if you need a push to accelerate back up to speed.

5. The best strategy is to not get disqualified 

I briefly mentioned the skater collisions earlier, but I’d like to underscore it here. The constant risk of falling off course in a short track race keeps the audience at the edge of their seats. One crash can end your quest for Olympic gold instantly.

Another threat is disqualification. Rules infractions like grabbing a competitor can result in being completely removed from consideration.

When it comes to investing for retirement, avoiding major bad decisions is one of the most critical steps. One moment of panic can set your portfolio back decades.

From 1961 to 2015 (55 years), the S&P 500 averaged 9.87% annual growth. According to research from the Brandes Institute, “If you missed the 81 most positive days during this 55 year period …your return plummets to a meager .03% annualized.”

To achieve most of the benefit of being invested in the market, you just have to not miss the most positive days. Don’t panic after a market dip and sell off your shares. Just keep yourself in the race!

You can win the gold!

If you haven’t watched short track speed skating before, I hope you’ll check it out in 2022 when the winter Olympics return.

Even more importantly, I hope this metaphor has been a helpful tool for fine-tuning your financial planning approach.

Keep working at it, don’t shy away from good coaching, and stay in the race!

By acroft

With a passion for writing, Andi aims to share her knowledge with the youth today to encourage them to gain more financial knowledge and invest in their financial futures. Over time, she's developed resourceful and frugal habits to help her accomplish her financial goals.

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