What baseball can teach you about your money
Ignore the noise, trust the process
I recently rewatched Moneyball, the 2011 film about Billy Beane and the Oakland A’s.
If you haven’t seen it, here’s the setup.
It’s the 2002 baseball season.
Beane was the general manager of a smaller-market baseball team with one of the lowest payrolls in the league.
He couldn’t afford the big-name players.
So he had to find another way to win.
He found it in a young Yale economics grad named Peter Brand.
Brand showed Beane something the baseball establishment had overlooked for decades.
The most important stat wasn’t batting average or home runs or stolen bases.
It was on-base percentage or how often a player gets on base, by any means.
Not flashy. Not exciting. But it worked.
The A’s won 20 games in a row that season, tying an American League record.
They did it by ignoring what everyone else was chasing and focusing on the one thing that actually mattered.
A quick aside: Peter Brand was a fictional character created for the film. In Michael Lewis’s book on which the movie was based, the real person was Paul DePodesta.
I’ve thought about this approach a lot over my 30+ year career as a financial advisor.
For the last 25 years, I’ve used this same basic philosophy with my clients.
Focus on what matters.
Ignore the noise.
Trust the process, even when it feels boring.
In baseball, that one thing is on-base percentage.
As you prepare for retirement, it’s your retirement paycheck… the reliable cash flow that lets you live the life you want.
Not the hot stock tip.
Not the complicated strategy your brother-in-law swears by.
Not whatever the financial news is screaming about today.
Your retirement paycheck. That’s your on-base percentage.
Here’s what’s strange.
This idea isn’t complicated. It’s almost obvious.
Everyone knows the tortoise beats the hare.
And yet, when it comes to money, most people still chase the hare.
They get bored with what’s working and look for something more exciting.
They listen to friends and coworkers who have completely different goals and circumstances. They panic when the market drops and try to play catch-up when they feel behind.
The gap between knowing and doing is where most financial mistakes live.
So what’s the solution?
Build a plan that reflects who you are.
Your values, your goals, your priorities… not someone else’s.
A personalized strategy is the foundation everything else sits on.
Review and update it regularly.
Life changes. Your plan should change with it. I recommend at least once a year, ideally twice.
Stick to your plan. This is harder than it sounds. But it’s where the magic happens.
Ignore the news. The financial media needs your attention to survive. You don’t need theirs to thrive.
Check your portfolio less often. Seriously. Less.
Talk to your advisor before making big decisions. A quick conversation can save you from an expensive mistake. Or an unwanted tax bill.
Get on with living. Your plan exists to serve your life, not the other way around.
Do the things you love with the people you care about.
Billy Beane trusted the boring approach when everyone told him he was crazy. It worked.
You can trust it too.
If you’d like to discuss building your own personal financial plan, or making sure your current plan is focused on the right things, get in touch.
Let’s have a conversation.
Links & things
Can’t believe we’re already a few days into February. But it’s not too late to review:
Related to the essay above, here’s a good article on why you should steer clear of the latest & greatest investment products Wall Street has to offer. It’s just more noise for you to tune out:
Tax season is right around the corner. Here’s a good summary of what tax documents you can expect to receive as your start organizing your tax filing information. From my friends at Beacon Wealthcare:
Thank you for reading!
If you’re not a client and would like my advice, simply reply to this email with your questions and I’ll be happy to respond with my thoughts…
Until next Wednesday,
Russ
“Stick to your plan” really is the hardest part. The strategy matters, but the ability to stay boring when things get noisy matters more.