As summer winds down with autumn creeping closer, it’s time to start thinking 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 do or do not, know that fantasy football is so much more than just a super-absorbing hobby. You can actually learn a lot about money management and growing your wealth from the game. Here are five financial lessons you can learn from fantasy football.
1. Do your research
Every fantasy football aficionado knows that a team’s performance throughout the year significantly depends on one important day: Draft Day. Knowing which NFL players to “draft” to your team is crucial to its success. If you sail into Draft Day unprepared, you’re essentially setting yourself up for failure. The true fantasy football pro listens to podcasts from training camps, researches potential trades, and learns about past performances. Come prepared for draft day and you will make better decisions.
In personal finance, the rules are similar. When choosing a company to “draft,” 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 important to diversify your team. 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. More exposure for your portfolio among various asset classes and markets means more protection against market volatility and inflation.
3. Keep your investments private
To a fantasy football manager, there’s no topic as exciting as the team they’ve drafted and the wins they’ve scored. But to the uninitiated, there’s no conversation topic that can put them to sleep faster than your fantasy football league. Find like-minded fans to talk shop with. 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.
4. Don’t let personal biases impact your investments
It’s hard to leave your personal feelings and opinions behind when drafting players for your fantasy football team. You may want to pick your favorite quarterback when there’s one available who’s more likely to put up massive stats. Maybe you plan to pick players from your favorite team, no matter what they’re 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, fantasy football pros know to ignore personal biases like these. Instead, focus on each individual player’s skills when drafting your roster.
This rule parallels perfectly in 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 poorly performing stock because they’ve always loved the company. They may feel personally invested in a stock they’ve purchased but struggle with 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.
5. Assess your financial health throughout the year
The decisions you make on draft day will have the biggest impact on your team’s performance throughout the season. However, the fantasy football pro knows how important it is to continuously monitor each player’s performance in real life. There will always be players who get injured, teams that change strategies, and players who simply have unproductive seasons. You’ll need to keep an eye on what’s happening to make the best decisions regarding players on the waiver wire. That means players who aren’t on anyone’s team and generally available for any team to add.
Financial health is never a set-it-and-forget-it affair. To achieve and maintain true financial wellness, you should monitor your budget, savings, spending habits and more throughout the year. It’s not enough to give your financial wellness a check-up at year’s end. Review and assess your money management every few weeks (and make changes as needed) for the best results.
Fantasy football is so much more than a hobby. It’s an activity that can teach you financial lessons for life.