With March Madness coming up, let’s review some financial lessons we can all learn from the iconic sport of basketball.
Lesson 1: Passion breeds success
As any wannabe professional athlete can attest, it takes more than muscle and talent to be a star. You must be highly passionate about the sport to succeed. Similarly, you’ll see the most success working at a job you are passionate about. Your interest will drive you to push yourself harder, set increasingly larger goals and achieve true success on a personal and financial level.
Lesson 2: Discipline is key
From grueling training sessions to early-morning workouts, basketball requires a vast amount of self-discipline. Managing your finances successfully requires strong discipline as well. Will you stick to your budget this month? Will you remember to pay yourself first? Training yourself to be disciplined with money is crucial for financial wellness.
Lesson 3: Set small goals
Young athletes aspiring to play on a professional level have a long road ahead of them. To bring their long-term goal within reach, they set smaller goals along the way. They might work on increasing their muscle mass one season and then focus on bringing up their speed the next year. Setting small, measurable goals is equally important when managing your finances. Your goals should be progressive, with another, larger goal taking the place of each smaller one you achieve.
Lesson 4: Diversify
A team needs every player, each of whom is an expert in their own skill area. The team’s players then work in sync, using their talents to compensate for their teammates’ weaknesses and, ultimately, to win the game. Similarly, the best investors will diversify investments across different classes. This way, the potential loss of any investment will be offset by those that succeed.
Lesson 5: Research, review, revise
Before a scheduled game with an opponent, coaches will show their players videos of previous games they’ve played against this particular team. This way, the players can get an understanding of what they’re up against and develop the best strategy to defeat them.
It’s equally important to constantly build upon your personal finance knowledge. Avail yourself of online resources, read the latest in personal finance literature and listen to podcasts on money topics that interest you. Use the knowledge you acquire to make smart decisions about general money management, investment strategy and long-term financial goals.
Lesson 6: There are no shortcuts
Players quickly learn that there are no shortcuts to building their skills, stamina and strength. There are no shortcuts to financial wealth either. Follow the timeless rules of money management for financial wellness: pay yourself first, invest early to leverage compound interest, spend less than you earn and increase your earning potential by investing in yourself.
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