Broker Check
Five Financial Lessons to Learn on the Golf Course

Five Financial Lessons to Learn on the Golf Course

February 11, 2019
Share |

I'm not a very good golfer.  As a matter of fact, I have played very few rounds of golf in my life.  But in the few rounds I have played, I did learn many things.  But as I struggled with the challenges of the sport, I also discovered many of the mistakes we make as golfers are the same we make as investors.  After a few dozen holes, here are the lessons I learned:

1)  Don't fill your bag with the same club.  You wouldn't go to the course with your bag filled with 10 putters, yet that is exactly what people do with their personal financial portfolio.  Having nine different technology funds in your 401k does not mean you are diversified.  Take time to know your risk tolerance and fill your financial "bag" accordingly.

2)  Take advantage of good situations.  Anytime you have a chance to get a birdie, don't take the opportunity for granted.  This concept is also true of qualified retirement plans many investors ignore where a company match is involved.  Take advantage of the tax deferral by maximizing your IRAs and 401(k)s.

3)  Know where the hole is before you tee off.  You might have the perfect swing, but you are in big trouble if you don't know where the hole is located.  Investors often put their money into investments without considering their personal risk tolerance or time frame.  Knowing your financial goals and creating a comprehensive plan can save a lot of headaches later.

4)  Bring extra balls, just in case.  You wouldn't show up to the golf course with a single ball to play 18 holes, tis could be a problem if your first shot decides to take a swim.  It makes sense to bring extra balls for insurance to make sure the round can be completed.  Having adequate life and disability insurance has the same impact on your financial game if something unforeseen were to happen to you.  If some health event caused your income to stop, it is important your family can achieve your goals.

5)  Don't take advice from bad golfers.  If one of your fellow golfers starts giving you advice on your swing after losing his 10th ball of the day, be polite and forget whatever he tells you.  Investors often take financial advice from people who are less competent and educated on financial planning than they are themselves.  Take time out of your schedule to work with a registered representative who can become your long-term financial caddy.

While these tips might not help your golf game much, hopefully they will help you hit the green on your financial goals.