As summer winds down with autumn creeping closer, it’s time to start thinking about fantasy football!
Drafting the best team and guiding them toward the championship takes knowledge, dedication, skill, and real talent. Do you have what it takes to be a fantasy football champ?
Whether you participate or not, know that fantasy football is so much more than just a super-absorbing hobby. You can learn a lot about money management and growing your wealth from the game. Here are five financial lessons you can learn from fantasy football.
Every fantasy football aficionado can tell you that your team’s performance throughout the year significantly depends on that one day (typically) in August: Draft Day. Knowing which NFL players to “draft” for your team is crucial to its success. If you sail into this important day unprepared, you’re essentially setting yourself up for failure. Instead, in the weeks leading up to draft day, the true fantasy football pro knows to listen to podcasts from training camps, research potential trades, and learn about the past performances of various players. Come prepared for draft day and you will make better decisions.
In personal finance, the rules are similar. When choosing a place or company to “draft” for sinking your money into, you’ll want to do as much research as possible and ask lots of questions: Is this investment secure? Is this company projected to experience growth over the next few years and beyond? What kind of annual gains can I expect to see from this stock? What values drive this company’s culture? Find out as much as you can about any potential investment before forking over your money.
In fantasy football, it’s essential to diversify your team and to draft players who excel at various positions in real life to ensure the most wins. In finance, diversification is even more important. You’ll want to spread your investments over a mix of whole-market funds, securities and savings accounts. The more exposure your portfolio has among various asset classes and markets, the more protection it has against market volatility and inflation.
To an actual fantasy football manager, there’s no conversation topic as exciting as the team they’ve drafted and the wins they’ve scored. But to the uninitiated, no conversation topic can put them to sleep faster than your fantasy football league. Find like-minded fans to talk shop with, but otherwise, you’re best off keeping your observations and insight on the game to yourself.
Investments are similar. You don’t want to be the drag of the party, the office, or the block. Talk about your stock performance with your partner, your financial advisor, and maybe your mother. Otherwise, keep it to yourself.
It’s hard to leave your personal feelings and opinions behind when drafting players for your fantasy football team. You might want to pick your favorite quarterback, even though there may be one more likely to put up massive stats available to draft. Or maybe you’ll plan to pick players from your favorite team, no matter what they are likely to produce during the season. Or maybe you’ll pass on a top-tier player simply because he’s on the rival team of your favorite. However, the real fantasy football pro knows to ignore personal biases and focus on each player's skill when drafting your roster.
This rule perfectly parallels the world of investing. Investors sometimes let their own biases get in the way of making sound financial decisions. For example, they may choose to keep their money in a stock that’s performing poorly because they’ve always loved the company. Or, they may feel personally invested in a stock they’ve purchased but have a hard time letting go when it's time to sell. To be a successful investor, it’s crucial to leave all personal biases behind when making decisions.
While the decisions you make on draft day will have the biggest impact on your team’s performance throughout the season, the fantasy football pro knows how important it is to continuously monitor the performance of each player in real life. There will always be players who get injured, teams that change their strategies or don’t use your chosen player much, and players who simply have unproductive seasons. You’ll need to keep an eye on what’s happening so you can make the best decisions regarding potential players on the waiver wire (players who are not on anyone’s team and are generally available for any team to add) going forward.
Financial health is never a set-it-and-forget-it affair. To achieve and maintain true financial wellness, you’ll need to monitor your budget, savings, spending habits, and more throughout the year. It’s not enough to give your financial health a check-up at year’s end; review and assess your money management every few weeks for the best results.
Fantasy football–it’s so much more than a hobby! Fantasy football can teach you financial lessons for life.