Holding steadfast is the single most significant predictor of financial success

The announcement that the Springboks are the ‘World Team of the Year’ should remind us of the importance of staying in the game in times of significant adversity, especially when it comes to achieving financial freedom.

On Monday, 17 February, the Springboks were announced as ‘World Team of the Year’ at the 2020 Laureus Awards held in Berlin, Germany in recognition of their triumph at the 2019 Rugby World Cup.

According to Gontse Tsatsi, Head of Retail Distribution at Old Mutual Investment Group, the fall and rise of the Springboks can teach us several lessons about goals, focus and resilience. “To achieve their status as world champions, the Springboks required a solid and unwavering commitment to a long-term goal and the courage to make their goal a reality,” says Tsatsi.

According to a study published in the PNAS Journal, resilience as a value is the leading indicator of future success. Researchers discovered that ‘grit factor’, or the ability to hold steadfast to a goal, was the single most significant predictor of accomplishment.

“To achieve one’s goals and attain financial freedom, investors should apply the same principles. Financial grit combines perseverance, ambition and self-control in the pursuit of goals that may take you months, years, or even decades to achieve,” says Tsatsi.

He says that time and research show that taking our eyes off the prize leads to disappointment. “It might feel tempting to withdraw existing investments or to not invest at all, but it’s precisely in these moments of uncertainty or wavering commitment that we need to stay focused on the long-term goal,” says Tsatsi.

According to research by Old Mutual Investment Group, had an investor over cautiously withdrawn their money from the stock market 20 years ago, and subsequently missed the 10 best performing days of the JSE (Johannesburg Stock Exchange), their investment would have lost out on potential growth of 44% than if they had they remained invested over the entire period.

“Not investing, or leaving the market before achieving your financial goals, for any reason equals missing out on potential wealth and risking the opportunity to realise your goals. While markets can and frequently do recover, lost time can never be recuperated,” concludes Tsatsi.

“While we can’t control local or global economic factors (the Springboks faced plenty adversity as a team prior to the world cup and were not the favourites going into the tournament!), we can control when we invest and how long we stay in the game. Financial grit, the solid and unwavering commitment to a long-term investment strategy, and resilience to make this goal a reality are the keys to achieving financial success”.