I have mentioned in the past that I’m a huge fan of professional football. My wife calls this Sunday my biggest holiday – and she’s right. Your personal finances have a lot more in common with a football team than you might think. Let’s take it position by position starting at the top:
Head Coach – The head coach is responsible for evaluating the players and coming up with a game plan each week. You are the head coach in your finances. It’s up to you to develop your financial game plan. Investment options are your players. You choose how to use them. If you fail in planning or misuse your investment options, you aren’t likely to be successful.
Quarterback – The quarterback the leader of the team directing the action on the field. He works closely with the head coach to execute the game plan. A plan is nothing without action and execution. In your financial game plan, it’s not enough to just have a plan, you need to follow through an execute on that plan.
Wide Receivers – If you are going to win the game you need to score. This year the New England Patriots showed that wide receivers can be the cornerstone of a potent offense. It’s not surprising to see them get 10-15 yards at a time. The problem is that sometimes their performance is inconsistent. If the timing or execution is off and there is no gain and the whole offense stalls. In your investment portfolio wide receivers are the mutual funds and stock portions of your portfolio. You might gain 10-15% one year and 0% the next. However, on average you they bring in some of the best gains.
Running Backs – The running backs are the opposite of the wide receivers. They very rarely run for 15 yards at a time. However, they also rarely get stopped for zero yards. They very consistently gain 3-4 yards. In your financial plan, running backs are like bonds or your high interest savings accounts.
Defense – The defense of the football tries to stop the other team from scoring. Another way to look at it is that you don’t want to see all the hard work from the offense go to waste.
Lineman and Linebackers – The front seven of the defense are the big players trying to stop the offense from short gains. In your financial life, this is being frugal and saving money. If you can stop the small loses everyday you’ll do well even if you don’t have record setting offense.
Corner Backs – The defensive backs play defense against the other team’s wide receivers. They are out to make big gains against you. You run up against these guys whenever you make a big purchase, like a house or a car. It’s easy to pay a few extra thousand dollars completely negating your offense.
Safeties – Every once in awhile the opposing team makes an outstanding play putting your defense in jeopardy. The safeties are the last line of the defense. In your financial life, insurance performs the work of the safeties. You may think you have everything covered, but there are some expected surprises that sneak into everyone’s lives.
For completeness, I should mention that Jim at Blueprint for Financial Prosperity also has an article comparing personal finance and football. At the end of the article he makes a great observation that life is more than personal finance or football. It with this that I dedicate my last picture to Marquise Hill. While Sean Taylor’s death created shock waves around the NFL, Marquise Hill’s went almost entirely unnoticed by the media. He will be remembered for two things, helping residents rebuild their homes after Hurricane Katrina, and giving his life to save his friend’s. His team will not forget and are playing for him this Sunday.
Italian Freedom Fighter:Randy Moss