You don’t have to be a professional athlete to appreciate the life lessons we can learn from sports. Many of those can be applied to personal finance and managing money. Let’s have a bit of fun and review some of the core principles of winning in sports that could help you become financially successful in life.
1. Sacrifice is sometimes necessary
Anyone who’s ever created a budget or used a debt snowball calculator to add up what they owe knows that sacrifice is necessary for success. Just ask a chess player. To win at chess, players sacrifice certain pieces to get to the opponent’s king. Other athletes—like basketball and football players—sacrifice their bodies to make winning plays.
Sacrificing from a money perspective should be obvious. Sometimes we need to “tighten the belt” in the short term if we want long-term success, like with paying off debt or dedicating a higher percentage of your income to retirement savings. We need to adjust our recreational spending if we want to accomplish either of these.
2. Good coaches make a difference
Players play the game. Coaches put them in the position to win. Ask any professional athlete who their greatest influence was. Chances are it will be a coach. Some will thank their parents, but aren’t they coaches too? Anyone who nurtures and guides us through the early stages of life falls into this category. Thank those people if you still have them in your life.
Financial advisors and financial planners are essentially money coaches. They are the people we turn to when we need help with our finances. In the digital age, there certainly are apps and robo-advisors that can fill that role, but there’s no substitute for human financial advice. If you don’t have a financial advisor, you might want to consider hiring one to set you on a winning path.
3. Successful systems win championships
The New England Patriots may have had the best quarterback in NFL history, but it was Bill Belichick’s system that made them consistent winners for two decades. The same could be said for Phil Jackson’s triangle offense or Billy Beane’s “Moneyball” approach. Both have been successful since their inception and later adopted by other teams.
Apply this concept to personal finance. Dollar cost averaging is an investment system where the total investment amount for a certain period is broken up into smaller, regular deposits. Make weekly deposits into an investment account for a year. The system has been proven effective over time as one of the better ways to offset market volatility.
4. Closers know how to overcome adversity
New York Yankees icon Yogi Berra used to say, “It ain’t over till it’s over.” Great players step up when their backs are against the wall. Great teams overcome adversity when the game (or the series) appears to be lost. Like the 2016 Cleveland Cavaliers. Down 3-1 to the vaunted Golden State Warriors, they came all the way back to win the NBA title.
Life isn’t easy. There will be times when you struggle financially. Don’t give up. Athletes have shown us time and again that comebacks are possible, and the underdog sometimes shocks the world. When times get tough, that’s the mindset that will get you through adversity. Instead of folding and giving up, dig down deep inside yourself and be a closer.
Kevin is a former fintech coach and financial services professional. When not on the golf course, he can be found traveling with his wife or spending time with their eight wonderful grandchildren and two cats.