9 Things Football Teaches Us About Money


It's the time of year when Saturday and Sunday afternoons are spent rooting for your favorites on the gridiron. American football is King in the fall, and it's common for us to channel the game into life lessons about grit, determination, and teamwork. But football can also teach us a thing or two about handling our money.

What can football teach us about personal finance? Here are some key takeaways.

1. Have a Game Plan

A football coach doesn't just show up on Sunday and wing it. He's spent the season devising a system that will give his team the best chance of success. He's scouted his opponent, studied his own players' strengths and weaknesses, and mapped out an approach to victory. This can be applied to any sort of money matter, from tackling a massive pile of debt, to saving for a new home, to investing for retirement. Develop a plan first, then you'll give yourself a greater chance of success.

2. Mix Things Up

A successful football team isn't going to run the ball on every play. It can't pass the ball every time, either. The best teams have a diversified plan of attack, and don't rely too heavily on any one weapon. Your investment philosophy should be similar in nature. Don't rely too heavily on one stock or industry. Because when you rely on one thing, even if it's shown to be successful in the past, you'll eventually get burned. Diversify your portfolio, just like a coach diversifies his playbook.

3. Be Smartly Aggressive

In football, you need to do what it takes to get into the end zone. This means throwing the long pass downfield once in awhile, or even going for it on fourth down. You don't want to be reckless, but it's hard to win a football game if you don't take some risks. Your investment philosophy should reflect this approach. A young person looking to accumulate wealth for retirement should invest largely in stocks, not conservative bonds or cash. Yes, there's some risk involved, but also a lot of evidence to show that you'll come out ahead in the end. Because playing it safe will only get you so far.

4. Be More Conservative Near the Finish

A football team with a big lead can afford to be more cautious as the end of the game approaches. You'll see teams draw up more running plays to eat up the clock and decrease the chances of mistakes. With the clock winding down, it's all about protecting the lead you have rather than taking risks that might blow the game. When investing, think of retirement as the fourth quarter. Once you have a big nest egg saved, shift your investments to more conservative things like bonds or cash. This way, you'll be less likely to lose the wealth you've created for yourself.

5. Field Goals Are Okay

Football games aren't always won with a flurry of touchdowns. Often, it's the field goal kicker that wins the game. We all would like our teams to get seven points on every possession. But that's not realistic. Settling for three points is better than nothing, and can still put you in a position to win. In investing, it's wise to think of your stock portfolio as a field goal kicker, steadily putting points up on the board. Sure, you're going to want some touchdowns mixed in, but it's often the smaller, but more frequent scores that move you to where you want to be.

6. Limit Your Mistakes

It's impossible for a football team to play a perfect game, and it's common to overcome a fumble or interception and still win. But too many blunders will cost you the game. This is true when it comes to finances as well. Did you buy a bad stock that cost you some money? That's okay, just don't make the same mistake again. Did you accumulate some debt? Don't worry, you can get out of the hole if you make the right choices from here on out. Keep your bad decisions to a minimum, and you'll be alright.

7. Sometimes You Will Take a Beating

Finances, just like football, can be brutal. There will be days when your team gets trounced, and your stock portfolio may get pounded in similar fashion. It happens. The key is to get up and keep trying. Resilience and patience are big drivers of success in football, and this can easily be applied to investing, saving, and debt reduction.

8. You Can't Win in One Day

As much as pundits like to refer to certain football games as "must-wins," the reality is that the NFL plays a 16-game season. Sure there are some games that are more important than others, but it normally doesn't make much sense to dwell on the results of any single game during the season. Likewise, it's silly to panic over one bad day in the stock market, or one bad piece of personal finance news. The only thing that matters is how you finish. If you take the long view and are generally making positive progress, then you'll end up okay, just like in football.

9. Nothing Is for Certain

Pro football is one of the few sports where player salaries are not guaranteed. Any player can be cut and out of a job at any time. A perennial Pro Bowler can lose his starting job to a rookie. This lack of certainty often rears its ugly head in matters of money, also. You may think you have enough money to cover an emergency, but you don't. You assume you'll get a 9% return on a stock, but you lose money instead. This is why it's crucial to live conservatively, plan well, and invest with a long time horizon in mind. Because just when you think you have things all figured out, life happens.

Disclaimer: The links and mentions on this site may be affiliate links. But they do not affect the actual opinions and recommendations of the authors.

Wise Bread is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to amazon.com.