The Olympics is more than an iconic global event – it’s a prime example of the importance of understanding long-term yields versus short-term payouts. Russell Brett explains how to prioritise your valuable assets by understanding that financial investments are a marathon and not a sprint.
As we wind down from the exhilarating highs and staggering lows of the Paris 2024 Olympic Games, I’m sure many of us feel (almost!) as exhausted from the intense viewing schedule as the many world-class athletes that have graced the podiums.
Olympians spend years – decades even – honing their skills in the hope of Olympic gold, while France has been at pains to ensure long-term thinking means it will feel the economic benefits of hosting the games for many years to come.
Legacy or let down? Recognising bad investments
Advertisers, sponsors, building contractors, hospitality companies, and of course, a seismic shift in tourism all combine to have a considerable impact on global financial markets surrounding the games.
However, in many ways, the effects of hosting the Olympic Games are a slow-burn response and evident only in the years that follow.
Years ago, the Olympics were infamous for the white elephant sporting facilities they left in their wake. Countries would invest heavily in the biggest and the best stadiums and attractions which would become underused husks after the games ended, leaving a heavy debt-burden to the host nation.
The Olympic Aquatics stadium at the Olympic Park in Rio de Janeiro sits dry and dilapidated after a lack of long-term prospects and its closure ordered by a judge. Meanwhile, the Olympic Stadium in Montreal went one billion dollars overbudget and its cost wasn’t fully paid off until 30 years after the games ended, by which time it no longer had a main tenant.
Now, the focus is on how countries can repurpose the head-turning stadiums into practical, profitable sports venues that build on the (hopefully) triumphant legacy of the initial event itself.
The London Olympic stadium is now the home of the Premier League Club West Ham United while Athens, which hosted the games in 2004, continues to enjoy use of the refurbished Olympic Stadium of Athens which is home to Greece’s national football team.
Beijing is a similar success story; as the first country to host both the summer and winter Olympics in the same year (2008), it really upped the ante when it came to making a huge initial investment in its national infrastructure. It reused and, where not possible, repurposed virtually all of its Olympic facilities – even going as far as to sell accommodation from the Olympic Village to private investors.
Investing in your future
Similarly, the athletes themselves are a great example of the benefits of long term investment.
The Olympians have invested considerable time in their sports over a period of many years to rank among the very best in the world. They’ve sacrificed a great deal in the short term to reap the rewards at the biggest sporting event in the world.
For the very best, who have recognised their talents and tirelessly pursued their big opportunity, the reward is a coveted gold medal.
It’s a painstaking process that has to be endured – and, much like savvy investing, there are no shortcuts to patience, resolve and making informed decisions.
Looking forward: why long-term investments are vital
Much like the host cities and competitors of the Olympic Games, it’s important to plan well in advance when it comes to financial investments and account for all conceivable variables. Fiscal markets are always in flux, but one unwavering constant that bolsters enduring investments over time is compound interest.
If you were to have invested funds in 2004, when Kelly Holmes and Hussain Bolt made their global debut to become household names or world-record marathon runner Paula Radcliffe suffered an unfortunate defeat in the blistering heat, think of the cumulative interest your accounts could be enjoying today.
While you can’t control which way the stock markets will turn, you can take action to invest now and maximise your yields through informed long-term investments and careful risk management strategies.
If you’d like to amplify your assets by harnessing the power of compound interest or are looking to make sense of the different levels of risk in investing, make sure to speak with a registered IFA.
Get in touch with our specialist team today to discuss the most practical solutions for you.