Another big sports event, another opportunity to draw some valuable financial lessons.
For the first time ever, both teams headed to the 2019 Super Bowl had to win in overtime to get there. And indeed, working overtime—and putting that extra earnings to work—is a great way for anyone to get ahead.
But while Sunday’s down-to-the-wire conference championships were certainly exciting, you probably don’t want quite so much drama in your financial life. So here are some other lessons you might take away from the Los Angeles Rams and New England Patriots’ road to the NFL championship.
Lesson #1: Don't panic when things go wrong.
The Rams likely expected the New Orleans Superdome to be loud, but not that loud. After the first quarter, the Rams were down 13-0 and seemingly couldn’t get their play calls right because of the noise. But they stuck with their game plan, survived the early adversity, and by halftime had closed the gap to 13-10.
How did coach Sean McVay keep his team together? They’d been through something similar before. Two seasons earlier, the Rams were new kids on the block when they moved the franchise from St. Louis to Los Angeles, and it showed when the team went 4-12. But McVay’s team stuck with his plan and his quarterback Jared Goff, and it worked.
With investing, we’re bound to see bad days, bad quarters or even a bad year. But that’s no reason to abandon a well-crafted plan. As long as your logic was sound and your goals are the same, the best strategy is usually to tune out the noise and stay the course.
Lesson #2: You have to take some (calculated) risks.
Many believe the Rams-Saints game turned when Los Angeles used a trick play: a fake punt on fourth down. Already down two scores, the Rams risked turning the ball over deep in their own territory.
But on second look, the play wasn’t that risky. Punter Johnny Hekker is actually uncanny at fakes. He came into the championship game 11 for 19 as a passer, averaging 8 yards per play (the Rams needed 5 for a first down). In 2015, he actually completed an incredible 20-yard pass after scrambling away from rushing defenders—something punters “aren’t supposed” to be able do, according to the NFL’s Twitter account. Turns out, Hekker has a secret power: He was a quarterback in high school.
The takeaway? Risk is necessary to get ahead. With the Rams really struggling, safely punting the ball away—giving the Saints a chance to extend their lead to 20-0—seemed like a greater risk to McVay than the fake punt. Sticking with what’s “safe” would’ve been like stuffing cash under your mattress (and letting inflation eat away at it) instead of investing. Picking the right calculated risks according to your risk tolerance, at the right time, is the name of the game.
Lesson #3: Boring and winning is..still winning.
It’s fun to chase the new thing. All season, people were excited about the high-flying Kansas City Chiefs, the suddenly surging Los Angeles Chargers and young elusive quarterbacks like the Seattle Seahawks’ Russell Wilson.
Every time the New England Patriots stumbled, sports writers and fans were quick to say their time had passed or that Tom Brady had finally gotten too old and slow or that coach Bill Belichick needed to move on. But at the end of the season, who’s in the Super Bowl? Not a Seattle startup, but the Microsoft of football teams.
When you invest in an exchange-traded fund (ETF) that tracks an index like the S&P 500, you’re not trying to cash in on the latest trends—you’re investing in established companies with a long track record. Maybe that doesn’t seem as fun, but since when is making money boring? Over the last decade, the S&P 500 has grown 200 percent. Now that’s exciting.
January 24, 2019