"If you can dream it, you can do it."
— from Walt Disney
May 6, 1954, dawned cool and breezy at Oxford's Iffley Road Sports Ground, less than ideal conditions for a runner to attempt a world record. But a local medical student knew that two other international athletes were capable of covering a mile in less than four minutes, and soon might, and he wanted the record held by his native England.
His accomplishment was stunning, almost like Chuck Yeager shattering the sound barrier, or Neal Armstrong's moon walk. Many experts thought, that like the sound barrier, the four-minute mile was a mark that couldn't be broken by a human being. But the barrier was simply psychological.
In the 64 years since young Roger Bannister ran the first sub-four-minute mile, his record has been bettered thousands of times. The current mark is 17 seconds faster than Bannister’s. My husband loves track and field, and I will occasionally watch a televised event with him and marvel at the power and grace of my fellow humans. The son of a college friend competed in the Olympic trials in the 400 meter run a while back, and watching him compete was especially exciting. That Bannister, who died recently of Parkinson's disease at 88, became a respected neurological consultant and admired and eventually knighted citizen of Great Britain, adds luster to his accomplishment.
Finance imposes psychological barriers as well. The Dow Jones Industrial Average hit 1,000 in 1972. The average investor could not have predicted a DJIA ticking along at 25,000. I stumbled across an article recently about the important psychological barrier that existed when the DJIA was at 10,000. This occurred in March of 1999, 19 years ago.
The advent of the IRA in 1974, which allowed Americans to shelter income annually in a tax-deferred investment account, was a Roger Bannister moment. Who could have envisioned that our investments could grow untaxed for decades? Another barrier was broken when 401(k) plans were introduced four years later, permitting employees to avoid immediate taxation on a portion of their income. Roth IRA's, profit sharing plans, defined benefit plans and other individual and corporate investment vehicles all represent watershed thinking on the part of economists.
Business innovation is also commensurate with benchmark achievements. If you're reading this on a personal computer or iPhone, you are utilizing technology that was once considered impossible and impractical, like the four-minute mile. Who could have conceived 30 years ago that a small Seattle coffee company would eventually own 27,000 stores worldwide? Investors, entrepreneurs and start-up founders in our ever-evolving economy are dreaming, like Roger Bannister, of breaking barriers that the current business climate assures them cannot be bettered.
Margaret R. McDowell, ChFC®, AIF®, author of the syndicated economic column “Arbor Outlook,” is the founder of Arbor Wealth Management, LLC, (850.608.6121 – www.arborwealth.net), a “fee-only” registered investment advisory firm located near Sandestin.