Millions of people around the world will watch the Super Bowl but few will think about lessons they can take from the game to apply to their money and financial planning.
But if you think about it, the planning that the teams do for the Super Bowl can give some valuable lessons for handling your money and financial planning.
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John's firm website: www.trinfin.com
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TRANSCRIPT:
John: With the Super Bowl coming up this weekend. A lot of people are thinking about football. We're thinking about it, too, but in a different way than you might be. And we're going to think about in this episode of Friends Talk Financial Planning how the Super Bowl can actually relate to financial planning and investment. Hi, I'm John Scherer, and I run a fee-only financial planning practice at Middleton, Wisconsin.
Bridget: And I'm Bridget Sullivan Mermel. And I've got a fee-only financial planning practice in Chicago, Illinois. John, before we go on, let's have everybody subscribe. That helps us with YouTube and helps more people find us. So please subscribe. We really appreciate it. It helps us stay motivated to keep putting out content and helping people.
So, John, one of the major things that's going on is the Super Bowl, the big game, and I think it gets a lot of people's attention. But you see it as a metaphor for investing in the stock market. Why don't you tell me more?
John: I think about the investing in the stock market with a lot of things. We talked about gambling and how that's like investing. Now the Super Bowl. Eventually we'll see what I can do with the Olympics when they come around. So, here's the thing that I was thinking about, and I think it's a really interesting metaphor, Bridget, when we look at the Super Bowl, right?
We got two teams that are at the top of their game. They’ve had 18 or 19 or 20 games. Now they've got two weeks to prepare for the big game. And what are they doing to prepare for that? They’re looking at what the opponent has done all the way through. What have they done for all those games? What are their strengths? What are they going to do in the game coming up on Sunday? But what's going to happen?
What I am also doing as a coach is I'm trying to figure out, okay, I know that they're looking at what I've done. How can we do things differently? How can we make changes? And what's going to happen on Sunday night is that one of the teams is going to come out and they're going to show something they've never done before. The other team has never seen this formation, this play, this sort of thing, right? And trying to get an advantage is the correlation I see between the Super Bowl and people's financial lives.
We have history. We have what the markets has done as an example, but then we don't know what's going to happen going forward, what's going to happen this year. In the football game we're going to have these different plays; something new is going to come. So all that history that we looked at, it's not going to help us as much as knowing what we do in those basics, those internal things as a team: the blocking, the tackling, running our plays, fulfilling our assignments, whether it's offense or defense. And it's how well we do those over the course of the 60-minute game that's going to determine the outcome.
The same thing with our investing and our financial planning is we don't know what the new twist is going to be in this year's game, if you will, but how we're going to be successful is the basics: saving money, diversifying, rebalancing, following those things which allow us to adapt. It’s not that it's not important what's going to happen, what twists are going on, but that's not what leads to success. So that's how I look at the idea of thinking about a big football game and how it relates to some of the basics of investing—the internal things that really make a difference.
Bridget: I think that another way we can extend the metaphor is a lot of times with teams you think, “This is a young team, so they're going to be fast, or this is an old team, so they're going to be smarter and wiser,” and these factors lead you to act slightly different—that might change your game plan. It might change your game plan a lot or a bit, depending on what players you've got and what the nature of your team is.
But you want to kind of stick with your game plan. You might make some adjustments at halftime, but you stick with the basics, and you stick with your game plan. And even when something happens that's unexpected, you want to stick with what works.
John: I love that and how you phrased it. Sticking with your plan, right? As an individual, we have a financial plan, we've got an investment plan. And yeah, we need to make some adjustments. When circumstances change, often our internal circumstances, maybe what's going on with recent in the markets, I bonds, or having opportunities to take advantage of some things like tax laws, but the basics are still the underpinning, right? Sticking to what works while not ignoring the rest of the things.
It's not like you can put your head in the sand, but those changing circumstances aren't the things that drive. Based on what the other team does, I don’t suddenly say, “Well, Jeez, I'm going to throw the ball every time or blitz every time,” if that's not what we do best. Yeah, we can adjust to those things, but that's a really great connection between those two things: sticking with the plan, but being flexible at the same time and being aware, right?
And too often, I think in the financial planning world it gets flipped on its head. We feel the need to be flexible and move things around, and the basics are an afterthought. In short, the real benefit in people's mind is the adjustment, when in reality the heart of the matter is, yeah, we can make some adjustments, but the core needs to stay the core and that is really evident for people who follow football as an example but not as evident in our personal lives.
Bridget: Right. I think that's a great place to wrap it up. So with that I'm Bridget Sullivan Mermel. I've got a fee-only financial planning practice in Chicago, Illinois. And this is John Scherer. He's got a financial planning practice in Middleton, Wisconsin. And we ask once again that you please subscribe. It helps us out a lot.
John: That's right. Hit that subscribe button. And if you like what we talk about here on Friends Talk Financial Planning. Bridget and I are both members of the Alliance of Comprehensive Planners, a nationwide group of fee-only, tax focused financial advisors, and you can check them out at acplanners.org to find an adviser in your area. Until next time, Bridget.
At Sullivan Mermel, Inc., we are fee-only financial planners located in Chicago, Illinois serving clients in Chicago and throughout the nation. We meet both in-person in our Chicago office and virtually through video conferencing and secure file transfer.