March Madness Money Lessons

What can you learn about money from March Madness? You can take a lesson from most experiences in life if you sit back and observe long enough; the NCAA basketball tournament is no exception.  I shared a few things I learned in my series on personal finance lessons for sports fans:

Ignore the Analyst’s Hype 

Just like the analyst hype from CNBC the posturing on who to choose for your bracket reaches a fever pitch starting on selection Sunday.  Everyone suddenly becomes an expert with advice on which teams to choose.

Truth is no one really knows who’s going to come out winners and who’s going to end up losers, just like the stock market.  Take advice from the media and your neighbors with a grain of salt.  Base your bracket picks and your stock picks on your own research and your own system of evaluating and choosing based on fundamentals and ignore the analyst hype.

One Game at a Time

Basketball teams win championships one game at a time; similarly, you can achieve financial success one goal at a time.  Set big goals for yourself but focus on reaching one goal at a time, don’t get overwhelmed by the task of achieving it all at once.

Practice Makes Perfect

Greatness begins off the court.  All great players and teams have to start from somewhere and practice, practice, practice to become great.

It’s no different with your personal finances. We all start with the same basic knowledge of money; you have to “practice” by learning about personal finance and putting in the time to research the concepts and strategies.

Pay Attention to the Details

Small things like diving on loose balls and boxing out can make a big difference in big games.  It’s no different in personal finance, a lot of small changes can add up to a lot of money saved or earned, so pay attention to the details.

Diversify to Win

Teams that rely on one or two big stars have a really hard time outperforming and winning the tournament.  It’s the same with your investment portfolio.  If you have one great investment carrying your performance returns and has a bad month, year, or 5 years then your portfolio is shot. 

On the other hand, if you have a balanced “team” of investments with strengths in different areas and a deep bench then you have a much better chance of achieving positive performance consistently. Diversify to win.

Ben Edwards, the founder of Money Smart Life, saved up enough to buy a Nintendo back when he was 12 years old. When he used the money to buy shares of Wal-Mart stock instead, he knew he wasn't like the other kids... His addiction to personal finance has paid off for his family and now he's helping you to afford the life that you want. Check him out on the web at Google Plus, Twitter and Facebook.

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