There is nothing like the start of the baseball season. Even thought the season seems interminably long, there is something about the anticipation of the Opening Day of baseball games. It means spring is right around the corner. Green grass will soon be visible under the dark gray mounds of snow. And the smell of fresh hot dogs will permeate the ballparks (I’m not sure how “fresh” a hot dog can be, but let’s go with it.) I’m much more partial to following NFL and NBA games, but with football over and basketball being really boring until the playoffs start, baseball will have to do.
And if there’s one thing I love about sports besides watching them, it’s sports analogies. I really think any philosophy of life can be explained through sports analogies. The importance of teamwork in winning games and getting things done successfully in life. Doing the hard work behind the scenes will usually lead to a good performance on the field and in your career. The analogies are endless. There is probably no sport more amenable to analogies than baseball. After doing some thinking, there are a good number of analogies that can apply to personal finance. Here are some of the better ones I thought of.
(A fair warning for those who don’t like baseball or don’t get sports analogies. Just turn back now. This could get ugly. Read a Financial Commandment and call it a day.)
Good pitching is essential, but you need to score runs to win
Increasing your personal cash flow is a simple proposition. Increase the amount of money coming in and decrease the amount of money going out. Make more money and spend less of it. In baseball terms, that means score more runs and don’t let the other team score runs. Having a good set of pitchers and sound defensive play from your fielders will keep the opponents runs to a minimum. But this alone is not going to win you the championship (That’s why we’re playing the game isn’t it??!!). You need to be able to put runs up on the board in order to make up for any small inevitable mistakes from the defense.
This means that having a budget and watching where your money goes is not enough in itself. Sometimes we spend too much on food in a month. A car repair is needed. An impromptu vacation is booked. Things fall through the cracks sometimes so it’s important we put a lot of effort into making more money as well. It can make up for any small mistakes we make and keep our cash flow going higher and higher. You can save only so much money. But the ability to make more money is endless.
Want proof? The Boston Red Sox scored 853 runs last season, more than any other team in the league. They also ended up winning the World Series.
As far as allowing the least runs by opponents? The best 3 teams were Atlanta, Pittsburgh and the LA Dodgers. All had pretty good regular seasons, but couldn’t quite go all the way. Shows you that having a good spending plan is necessary and puts you in a great position, but it is consistently increasing your net worth that will get you to the promised land.
You’re eventually going to swing and miss. You just have to learn from it
Legendary Boston Red Sox player Ted Williams famously said, “Baseball is the only field of endeavor where a man can succeed three times out of ten and be considered a good performer.” A 30% hit rate is awesome in the baseball world, but is terrible in everything else. Something useful can be gleaned from these words though. Which is that failure is inevitable. You can literally plan for it. There is no one who has never made a mistake at some point when it comes to their finances. Be it a poor mutual fund selection, higher than expected credit card bills, or a home improvement project that just won’t stay under budget, mistakes will be made.
The important thing is to, of course, learn from them. But it is also important to read blogs just like this one to read about others financial blunders and try our best to avoid them.
Put your pitcher in the best position possible to win the matchup
A common predicament for baseball managers is when their starting pitcher is getting tired and has just let up a couple of hits. The opponent is threatening and it’s clear your pitcher is gassed. It’s time to go to the bullpen and choose the best relief pitcher for the situation. Who to choose can be a tricky choice. Some pitchers pitch better at home. Some are better at night. Some are terrible against certain hitters. All these variables must be considered before choosing the pitcher that will give you the best chance to win.
Personal finance is no different. Someone who has a lot of credit card debt and someone who has none should not be doing the same thing with their money. The person with a lot of debt should try to get by with a smaller emergency fund while paying down their debt, while the person with no debt can save up for a more comfortable emergency fund and invest some money as well. An professional looking to pay less taxes could opt to put more money in their 401k and HSA accounts. Everyone has a different situation, and there is no one answer to solve everyone’s issue. The best action is to analyze where you are and where you want to be, and find the most efficient way to get there. Simply running the numbers will tell you what you should be doing in many cases.
The season is a marathon, not a sprint
A Major League Baseball team has to play 162 games in the regular season. That’s a whole lot of games. Players can get worn down and team morale can take a hit. The important thing to do is to keep the goal in sight. If your goal is to win the World Series, brooding over that fluke loss you suffered 2 months ago will not help you get there. Conversely, reveling in a win against a hated opponent can be your undoing if you lose 3 games in a row right after.
Baseball teams are in it for the long haul, and so are your finances. For example, if you make an awesome plan to repay your student loan debt, focus on paying off that debt going forward rather than looking at the past few years where you didn’t get around to it. If you are able to make the extra payments for a whole year, be proud of that but make sure to do it against next year. Not making your monthly payments a couple of times can derail your plan and your confidence. As the most overused cliche in the world tells us: Slow and steady wins the race.
All right well I’m all analogied out for now. Hopefully those of you who enjoy sports analogies got something from this post. And those that don’t like them hopefully read this far somehow. Until next Opening Day.