5 Investing Lessons Football Taught Me
As a former athlete, I’ve had the benefit of being around many great coaches over the years, and with great coaches come great one-liners. Although simple, and sometimes cryptic, these teachable sayings carry much weight. Within them are lessons that are not only applicable to sports, but to life. Even more so, there are several lessons that I believe can be applied to financial planning as well.
Below are five lessons I learned from football that also apply to investing.
1. Failing to Prepare is Preparing to Fail
While the exact source of this quote has been debated, the wisdom it carries is not debatable.
Football, like many sports, requires a great deal of preparation, perhaps much more than most people realize. While practices are important, they are often coupled with painstaking film sessions, before or after, where the tiniest details about yourself and your opponent are examined. That information is then formulated into what is known as “the game plan.”
Any well-formulated game plan takes hours and hours of preparation each week. To go into a game without a plan would have been the equivalent of going into battle with no weapon – you’d have little to no chance of success.
The same goes for financial planning. Without a plan, you increase the likelihood of mistakes. This could include making an impulse decision like investing in something you know nothing about or selling a good investment during a time of panic.
A plan is something that provides structure. It can be altered, but should be designed in a way that gives you confidence and is something you can stick to for a long time, or at least long enough to give it a chance to succeed.
2. Be the Thermostat, not the Thermometer
I love this quote that my high school coach used to tell me. What he meant was, “Don’t be reactive to things around you that you can’t control.” I’ve also heard from other coaches in the past, “Never get too high, and never get too low.” Instead of reflecting the chaos that could be going on around you, choose to show resolve in any situation.
Investing in equity markets can be like riding a roller coaster sometimes. If you let your emotions ride the roller coaster with your portfolio balance, you’re setting yourself up for failure. The key is to stay even-keeled in up markets and even-keeled in down markets. You are in control of the tone you set and the emotions you act on. Don’t be reactive, like a thermometer. Be proactive and decide to have an controlled temperament up front, like a thermostat.
3. Live to Play Another Down
I’ve played multiple sports growing up, but football certainly provided the most unique experiences. As a young quarterback, I vividly remembering taking a hard hit near the sideline in a varsity game, laying on the ground in pain, and simultaneously getting yelled at by one of my coaches for not protecting myself from the hit.
One thing I was prone to during that time was trying to do too much on one play, or in other words, trying to make a big play by taking big risks. I can remember coaches telling me, “If nobody is open, protect the ball and live to play another down.” To translate, “Take calculated risks and don’t try and score a touchdown on every play. First downs are good too.”
For investors, don’t be constantly looking for the “hail mary” that you think will make you rich. Doing so could likely end up in true loss, which removes the opportunity to profit from more calculated investment decisions. For the baseball fans out there, singles and doubles will win games for you. Homeruns are nice, but are usually coupled with a higher strikeout rate. When you’re investing, compound interest is crucially important, so you want to avoid “striking out” at all costs.
(If you’re still with me, I’m assuming you’re at least a mild sports fan, so I will unapologetically continue with the sports analogies.)
4. Next Play
As a young athlete, it can be hard to bounce back from a mistake, especially when you’re under the lights on a Friday night with everyone in town watching you. But, after making mistakes like throwing an interception, I can still picture my coach encouraging me to not dwell on the mistake and to move on and focus on the “next play.”
The same is true in your financial life. I don’t know that I’ve ever met a client who thought they had made every right financial decision in their entire lives. People make mistakes. We miss good opportunities, we make bad calls, and sometimes, we can really beat ourselves up for getting it wrong. Don’t do that.
Focus on what’s ahead and what positive things you can do going forward. Instead of dwelling on things you didn’t do, put extra focus on making sure you execute the right moves in the future.
5. Win Every Phase
In football, there are three main phases to the game; offense, defense, and special teams. No one unit operates independently of the others. They must work together for a common goal.
Furthermore, within those teams, no one person can win it all. The greatest quarterback in the world can’t complete a single pass without somebody blocking for him. The best kicker can’t make many field goals unless there is a good snapper and holder to assist. It takes the whole team, working together, coordinating their efforts, to be truly successful.
Wealth management is no different. To do it well, it takes a coordinated team effort. Your accountant, attorney, advisor, insurance agent, etc. need to talk to each other. The “left hand” needs to know what the “right hand” is doing to be cohesive and efficient. Every area needs to be functioning at its optimal level for the investor to realize the maximum benefit.
Bottom Line
The keys to greatness and success usually transcend any industry, sport, or endeavor. These phrases and lessons happen to be tied to specific memories from my athletic career. They are incredible lessons that, cannot be applied to life, but can certainly be applied to investing and wealth management too. Whether you are someone starting out or someone nearing retirement, there is never a bad time to commit these one-liners to memory and start acting on them. It may even be beneficial for you to hire your own “coach,” or advisor, to guide you along way. If so, be sure to seek out a qualified, credentialed advisor, preferably a CERTIFIED FINANCIAL PLANNER™ professional that can help you create and maintain a game plan for your specific situation.
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