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We tend to think of personal finance as a complicated subject, and it can be. It doesn’t need to be, though. Do you like to play Fantasy Baseball? Many of the concepts used in Fantasy Baseball also apply to keep your personal finances in order. Just like in baseball, you need to have a good strategy, get rid of poor performers, fire bad coaches and make sure you have all of your bases covered. In financial terms, that means choosing investments that perform consistently, evaluating the performance of your investments regularly, seeking out the advice of the best financial advisors and making sure your future is protected with solid savings and elimination of debt.
The Importance of Strategy
Just as anyone who knows anything about baseball wouldn’t just pick their players blindly, neither should you approach your finances this way. You want players who are consistently good, not just players that have knocked it out of the park a time or two and the performed poorly for the rest of the season. Consistency and reliability is key. This can be applied to your investment strategy to make safe investments. Those that promise big returns in a short amount of time sound appealing, but if they don’t perform well over time consistently, you may lose big time.
Evaluate What Works and What Doesn’t
On your Fantasy Baseball team, there were likely players who performed well last year and others that were a huge disappointment. In order to avoid the same mistakes you made in the last season, you’ll keep what works for you and change the other positions. You should continually evaluate your finances this way. If your short term, high yield CD performed well during the past five years (hit a homerun), you may want to continue investing for another five. If that stock your brother-in-law talked you into has been so volatile that you’ve developed an ulcer due to all the worry, count your losses and consider it a lesson learned.
Be a Star Player
Most Fantasy Baseball teams choose their pitcher first. A good pitcher can make or break a team. You’re the pitcher when it comes to your personal finances. Your every move should be calculated. Don’t just throw your money out into the void hoping you’re making good decisions. Aim for a target.
Put Me in, Coach
Just like baseball teams have coaches, your financial advisor, your accountant and your attorney are the coaches of your financial life. Do you have good or bad coaches? Some promise the world. They’re all hype and no delivery, though. If you’re not seeing a good return on your investments, you may want to consider “firing” your coach and hiring a new one. Don’t keep playing for a losing team.
Make Sure All Your Bases Are Covered
Are all your bases covered? Your fantasy baseball team will have all the bases covered to keep the runner from stealing bases. They’re prepared to catch the ball and tag someone out if needed. They’ve got their eyes on the ball. So should you have all of your bases covered financially. Having all your bases covered in your financial life means that you have 3-6 months’ worth of savings, you are fully funding your retirement account, you have eliminated your bad debt and you are meeting all of your financial obligations.
Will Carter has provided this article to you, for high returns he goes to Cambist.