Should You Set Goals Like a Marathon Runner?

Marathon runners tend to pick “round number” goal times, and they also tend to finish just before a round number. What can you learn about setting your own goals from this seemingly insignificant behavior?

Aug 24, 2014 at 11:00AM

Track
Flickr / Oscar Rethwill.

What should the annual performance of your 401(k) be? How much of a raise should you get next year? What percentage of your income should you be setting aside in savings?

Now answer this: What do all these numbers all have in common? And what does any of it have to do with running marathons? 

Reference points 
For any goal or expected payoff you have, you're probably using a reference number. These numbers are important because they tell you a lot about whether you view your situation positively or negatively.

For example, if you're expecting your 401(k) to return 8% per year, and yours makes 10%, you'll probably be pretty happy. But if you're expecting your 401(k) to outperform the S&P 500 every year, and the S&P 500 returns 12%, your 10% gain might not look so great anymore.

In other words, reference numbers can tell you if you're winning or losing. 

Where do they come from? 
You can construct a reference number in many ways, but they tend to share a few characteristics: We typically pick round numbers, and our numbers are often arbitrary.  

For example, marathon runners tend to use round numbers when setting their goal times. Interestingly enough, when researchers studied how runners worldwide actually performed, they found that finishing times also tended to be clumped just before prominent round-number times like 3:30 and 4:00. In fact, there were spikes before almost every half-hour finishing time.

The researchers concluded that marathon runners tend to set a goal time and, if they're close, adjust their effort in order to come in under the wire (the use of radio-frequency identification tags on runners, which tracks their pace throughout the race, makes this conclusion possible). It also looks like a lot of runners adjust their expectations and effort to come in under the next round number, rather than hurrying up.

In other words, for a marathoner there's a big difference between finishing under 3:30 or finishing under 4:00, but there isn't a world of difference between 3:35 and 3:55. 

Runners adjust their effort to reach round numbers -- even at the expense of time! 
Another study previously found that only about 26% of marathoners finish at their stated goal time. That means most goal times are optimistic.

Combine this with the results above, and you have an interesting factoid: When runners can't reach their initial goal, they seem to slow down in order to finish before another round-number time instead of pushing to finish as close to the previous round number as possible.

This means runners are putting in less effort than they could in the interim. 

Are your reference numbers making you lazy? 
This means whether it's the number of new clients you bring on board, the amount of money you save, or the percentage of winning stocks you pick for the next five years, your goals are an important predictor of the effort you put in. 

If, like a marathoner, your initial goal is too optimistic, and your fallback goal is too easy, you might be losing out on a lot of motivation and effort in that middle ground. 

Setting good goals 
That might not matter to the average marathon runner, but it could very well matter to you. 

This study drives home the importance of setting a good initial goal and not letting round numbers give you permission to slack off. 

We love round numbers, and understandably so -- they're easy to remember and they have a nice, well, evenness to them. But to set a good goal, it helps to back your way into your number rather than justify a number you picked out of thin air (this is far more common than you think). 

For example, how can you calculate your new sales goal for the month? Perhaps you should take your previous sales, adjust for the season and the market, and demand a little bit of improvement.

By choosing a goal that's challenging but attainable, you'll be more likely to exert a bit more effort to reach it. And if you don't reach it, make sure you have a fall-back goal that isn't too far off the mark -- even if it's not an easy round number. Otherwise, you might fall into the trap of lowering your standards considerably, or even giving up altogether. 

Finish strong into retirement
Social Security plays a key role in your financial security, but it’s not the only way to boost your retirement income. In our brand-new free report, our retirement experts give their insight on a simple strategy to take advantage of a little-known IRS rule that can help ensure a more comfortable retirement for you and your family. Click here to get your copy today.

Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.

 


Compare Brokers