My daughter is a competitive acrobatic gymnast. (See photo) By participating in a team sport, she has learned so many life lessons, which can easily be applied to investing. Here are the top 5 lessons:
Lesson #1 – You don’t always win
Sometimes investments lose money, just like sometimes your team will experience a losing streak. It may be unpleasant, but don’t give up!
Lesson #2 – Resilience
Just because you didn’t medal, doesn’t mean you quit the sport. In fact, you probably try even harder next time. When investments go down, you don’t necessarily sell them either. You use it as an opportunity to review your strategy.
Lesson #3 – Don’t rely on a star player
If your star player gets injured, you are unlikely to make it to finals. Similarly, if you pin all your hopes on just one investment, you run the risk of being disappointed if it falters. You are better off building a solid team (aka: portfolio) of investments, so that one injury doesn’t ruin your chances of success.
Lesson #4 – Have a goal and work towards it
If you are in competitive sports, training is mandatory. You don’t have an option to take a month off. Similarly, you can’t skip a month of savings either. Stick to your goal and keep working towards it.
Lesson #5 – Listen to your coach
Your coach has done this before. He/she knows how to win and how to motivate you. This is the same reason why people hire an investment advisor (which is just a fancy word for “money coach”).