Planning: Failing to plan is planning to fail. Players do not just land up in the stadium to play nor do they just play the game every day. It is not enough. Coaches plan playing strategies, analyse previous matches, players and competitors. Then they have a game strategy and a training plan in place which involves physical as well as mental preparation. Similarly to achieve our financial goals and build our financial wealth, we have to put a financial plan in place which outlines our goals and the steps we will take to reach them.
Self Discipline: Successful sportspersons are highly self-disciplined. Sachin Tendulkar, known as the 'GOD' of cricket is an excellent example of self-discipline. In his 24 year career, he strictly stuck to his workout regime, diet plan and long batting practice sessions. Similarly, we should be disciplined when it comes to our finances. We should control unnecessary expenses and extravagant shopping trips. With self-discipline in money matters, we can reduce debt and increase savings. We should review and update the financial plan regularly and continuously take small steps to improve our financial health.
Practice, Practice, Practice: Athletes train hard regularly. They keep playing their sport to improvise and learn from their mistakes. They practice so much that it becomes second nature to them. We need to practice saving, spending cautiously, budgeting, reviewing investments etc. so that these habits become a way of life for us. This will ultimately lead to increase in our financial wealth.
Goal Setting: Budding batsmen want to score a century in all their matches or want to win the Cricket World Cup. Similarly we want to buy the biggest house in Mumbai or have a stable of BMW and Audi cars. These are not goals but aspirations. It is good to dream but as part of financial planning, we need to set short term goals and long term goals. 'I will invest Rs. 2000 every month in an Systematic Investment Plan (SIP) of an Equity Mutual Fund' is an example of a short term goal. 'I will ensure that I have Rs. 15,00,000 for my child's higher education abroad in 15 years is a long term goal’. Setting goals will ensure that we work towards them. We will also feel a sense of achievement when we reach the goal motivating us to do even better.
You can always get back on track: There are some great comebacks in sporting history. Former World No. 1 tennis player, Kim Clijsters had announced her retirement in 2007 due to injuries and marriage. She came back to competitive sports after motherhood in 2009 and won consecutive US Open championships in 2009 and 2010 and the Australian Open in 2011. She also reached No. 1 in the Women's Ranking in the same time which is an incredible feat.
You might feel lost with your finances or have messed up with them. There could have been unexpected circumstances putting your finances in jeopardy. You should not despair and the first step is to tell yourself that you will get back on track. You should not give up and work towards putting your finances on track so that you achieve your financial goals.
Diversification: Professional sports persons like Roger Federer always know more about their score, next tournament, practice sessions' schedule than how much money they earn every day. This is important else their attitude towards the sport might change. But many of them do not have a 20 year career. There are also injury risks which could cut short the glory path. It is therefore important for them to diversify their earnings. They earn money through endorsements, playing league games (IPL, EPL) etc. If they want to remain associated with the sport post-retirement, they become coaches, team managers or commentators and match analysts.
In finance too, diversification is a must. You should invest in a variety of asset classes like gold and real estate and also in different types of assets within one asset class. For example if you are investing in mutual funds, you should invest in equity funds, debt funds etc. This will reduce risk of putting all your eggs in one basket and also optimize your returns.
Sporting annals have numerous stories that have inspired and motivated millions of us. Even in personal finance, if you play hard, play smart and don't give up, you will definitely be the winner.
This article was originally published on Indianotes
The author can be reached at firstname.lastname@example.org