Treat Your Finances Like Fantasy Football
The College Football Playoff has been set. I’ll be pulling for Urban Meyer‘s squad, although it may be tough for anyone to knock off Mr.
Satan’s Saban’s squad.
That bracket of four is one several hundred thousand football playoff brackets that have been or will be finalized this month. Many of us armchair general managers will be participating in these other playoff brackets. That’s right. Let the NFL fantasy football playoffs begin!
Update 12/27/2016: After a 6-7 regular season, my team sneaked into the playoffs and rattled off a 3-game winning streak to take home the championship this year. My victory made 11 of us happy, and one league member quite sad, as he was in line to take home the dynasty rollover money, which had grown to the equivalent of 10 entry fees. Next year I’ll have shot at the prize of 12 entry fees that is awarded only to a back-to-back champion.
I’d like to thank Tyrod Taylor, Ty Montgomery, Tyreek Hill (what’s up with all the Ty’s?) Travis Kelce, and finally Dan Bailey for sealing the victory last night.
Winning at Fantasy Football Requires Attention
You do your homework before the season. You read a few previews, print out some rank lists, and study up on rookies and free agents most likely to make an impact. On draft day, you’ve got everything you need on paper or eleven open tabs in your browser. The beer is cold, the dip is warm, and the chips at the ready — no double dipping. Please.
Early in the season, you check the injury reports. You look for the surprise player that went undrafted only to catch 8 balls for over 100 yards and two touchdowns in week one. I’m looking at you, 2012 Kevin Ogletree . Seriously, where you the rest of the season?
Throughout your league’s season, you’re checking the waiver wire, seeing who is being added most in other leagues, and negotiating trades to improve your team as much as possible. You navigate your player’s bye weeks, plugging players in and out of your lineup as if they were Browns quarterbacks.
If you’ve done your job, and your players have done theirs (Why, Cam? Why did I draft you so high?), you will reach your league’s playoffs. With a little luck at the end of the season, you might end up in the money.
On the other hand, if you autodrafted, forgot to set your lineup a few times, and don’t bother much with the waiver wire, the odds of success are stacked against you. Yes, Andrew, that’s probably why you miss the playoffs pretty much every year. Those habits, along with stacking your roster with your favorite team’s players, is really working against you.
Winning at Personal Finance Requires Attention
I don’t have the data to support this theory, but it would be an interesting survey. I’d be willing to bet that most fantasy football players spend much more time on their fake football teams than their own finances. The game with dozens or hundreds of dollars at stake garners more attention than the other game where millions could be on the line.
Why would I think that? I was one of them.
In the first five-plus years of my career, I was good at saving, but I didn’t know much about investing when I started collecting a doctor’s paycheck. I knew enough to stay out of trouble, having read The Only Investment Guide You’ll Ever Need back in medical school. So that was all I needed, right? I mean, Mr. Tobias gave it that title for a reason, No?
I hadn’t read the book in six or seven years. I put my money into target date funds. I didn’t know the difference between a 401(K) or a 457(b). I didn’t start a taxable account until I had been out of residency for four years. I didn’t have an IPS, or even a desired asset allocation. That’s what the target date fund was for. I could have done worse, but I certainly could have done better.
Meanwhile, I was killing it in fantasy football. I won the 12-team league the first year I joined. Call it beginner’s luck, but I put the time in. Throughout the fall, I spent at least a few hours every week devouring statistics and optimizing my lineup. In eight years, I’ve finished in the top four (a.k.a. in the money) half the time. Meanwhile, I paid little attention to my finances early on, other than checking the balances every once in awhile.
Give Equal Time to Both
I won’t try to convince you to give up fantasy football or to spend less time on it. I will insist that you try to spend an equal amount of time on your own finances. So much more depends on it.
When you pay your annual league entry fee, analyze the fees on your investments. Most investors who choose not to DIY are paying 1% to 2% or more. Fees can be as damaging to your portfolio as a blown out knee can be to your team (again, AP?).
When you set your ideal lineup, set your preferred asset allocation. By the end of the 15 or 16 weeks, you should have had time to develop a simple but complete Investor Policy Statement.
At playoff time, do some end-of-year tidying up. Is it time to rebalance? Have you maxed out your tax-deferred space? Do you have money ready to contribute to your personal and spousal backdoor Roths in early January. And please don’t tell me it depends on how well you fare in those playoffs.
But Not Exactly Like Fantasy Football
Your fantasy football squad will look a little different most weeks. You drop the underperformers, pick up the next big thing, and by the end of the season, your team scarcely resembles the roster you assembled on draft day.
This is exactly what you do not want to do with your finances. Dropping your underperformers will lock in losses. Buying into the next big thing is pure speculation. If you want to play the individual stock picking game, use your “play money,” which should be limited to maybe 5% of your portfolio.
Your roster of investments should look very similar at the end of the year that it did at the beginning. Beat most investors and professionals by selecting a simple three fund portfolio or similar lazy portfolio. Complexity is the enemy in this game.
What’s Your Fantasy Football?
You don’t have to be a fantasy football player, or fantasy anything aficionado to be guilty of similar distractions. If you’re choosing to trust your money to someone else, or just picking a few funds and setting things on autopilot, you’re deciding something else is more important.
We’re all busy, juggling as much or more than we can handle at times. It’s nice to have a distraction. Hobbies are welcome and required to find a workable balance. I simply suggest you make personal finance one of them. It’s guaranteed to pay dividends.
I’m kind of excited to see what kind of ads you guys get this time. When I wrote about Urban Meyer’s Buckeyes, you got OSU panties. Any Panthers lingerie this time?