March Madness Money Lessons
March 24, 2009
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.
I love sports analogies. They hold a special place in my heart. Hats off for step #1 about ignoring the analyst’s hype. The stock market is the world’s craziest roller coaster, and like being in the dark on Space Mountain at Disneyland, there is no way to predict what direction it will be going next.
Anytime you liken money to something that isn’t money, you’ve got my love. I’ve done it with James Bond and Star Wars so far. Good analogies!
[...] March Madness Money Lessons [...]
[...] March Madness Money Lessons [...]
[...] March Madness Money Lessons [...]
[...] want to subscribe to the RSS feed for free updates from Weakonomics.com.Powered by WP Greet BoxMy editor’s choice this week goes to Money Smart Life. Ben used a tactic I’m fond of comparing two unlike [...]
[...] March Madness Money Lessons [...]