In golf, as in finances, there are a few rules of thumb that may improve your game: keep a level head, avoid traps, practice before trying something new and stay the course. Applying lessons from the golf course to your financial life and vice versa may help you improve your game in both arenas. Here are three tips that may help you work toward success on and off the golf course.
Getting bogged down in a sand or water trap may cause frustration and add many strokes to your ultimate score. While it may not be possible to avoid financial hazards, it is important to do your due diligence before making new investments or any major changes. Before taking a financial step, consider the potential outcomes and the probabilities of each. It may make sense to take several smaller steps toward your goal in some situations instead of taking a long shot that could put everything at risk. In other circumstances, the potential upside of hitting the green on the first shot might overcome the risk of missing.
Find a Good Caddie
When you are on the course, your focus should be on the game with no distractions. Just like a caddie may help you keep your gear safe and accessible and provide you with sage advice on how to work toward your goals, a financial professional might be your partner on your journey in seeking to build wealth. Consider using their assistance for things like rebalancing your portfolio, analyzing your risk tolerance and asset allocation, preparing financial statements, tax documents and other key tasks. Having the help of a financial professional may free up your time to focus on what matters, like playing more golf.
And just like with a golfer and caddie, compatibility between you and your financial professional is the key to a successful relationship. You may need to interview several financial professionals before you find one whose style and methods match well with your own.
Do Not Let a Bogey Send You Off-Course
In life and golf, mistakes are inevitable. But it is important not to let one bogey (or even one bad game) send your attitude into a tailspin. Complications inevitably arise, whether it is an investment that soured, an interruption in income, or a sudden unexpected expense that sends your budget off the rails. What matters is that these problems do not take you away from your short- and long-term goals.
Whenever you encounter a financial bogey, consider what led to it, what it means, and what actions you may take to prevent similar situations from occurring in the future. In some cases, these slips may occur due to no fault of your own, and there may not be much you may do to prevent their recurrence. Instead, you may need to plan and prepare for it. In other cases, there may have been red flags or other warning signs leading up to the mistake, which you may be better able to spot and avoid in the future.