If you live in America, unless you live under a rock, you are probably well aware the Super Bowl was played this past weekend. Early reports say a record 114 million people watched Baltimore defeat San Francisco in Super Bowl XLVII. Both teams have had great years obviously. There are some key financial lessons though I think we can learn from championship caliber teams. I’ll address one area here and talk about another lesson later this week.
Not every play scores a touchdown
The goal of football is to score touchdowns. The more touchdowns you score the better the chance you have of defeating your opponent. Even for Super Bowl champions though not every play is going to yield a score. In fact in an average game a team will probably run 60-70 plays and only 3 or 4 of them will result in touchdowns. So, what about the other 95% of the plays?
Here”s the thing. Not every play needs to be an 80 yard bomb for a TD. Football games are won by stringing together a bunch of 4 or 5 yard gains. String together 10-12 modest gains and you’ll get a score. String together a few drives like that and you’ll win a game. String together enough games like that and you’ll win a championship. The championship is won by doing a few little things right over and over and over.
Financial success comes one decision at a time
This same principle can be applied to so many areas of our life. When we focus on the major goals we can easily become discouraged. But those big goals are achieved one small step at a time.
Becoming debt free
Most of us would love to become debt free but the sad truth is most people have little hope of ever getting there. When we look at the amount of debt we have it seems overwhelming and we don’t even try or if we do try we quickly become discouraged.
In my opinion this is why Dave Ramsey’s Baby Steps have been effective for so many people. In the debt snowball you list your debts from smallest to largest and focus all your attention on that smallest one. By taking things one small choice at a time, one debt at a time, I have a goal in front of me that I can attain.
When that football team lines up on the 20 yard line, they could easily be discouraged by the 80 yards of empty real estate between them and the goal line. But for the most part that isn’t where they focus. They are focused on the first down marker 10 yards down field. And when they get that first down, they focus on the next 10 yards and so on.
We want to have money saved for our retirement someday. But putting away that much money seems overwhelming. It leaves too many people counting on things like the lottery as their retirement plan. This is like a Hail Mary pass at the end of the game. There’s a chance it might come through, but the vast majority of the time it’s a failure.
Instead your retirement is best built a little at a time. Slow and steady. If you put away a percentage of your pay each month into investments like good mutual funds that have a long track record for success, eventually one day you’ll wake up and realize you have a nice nest egg. But those investments come 4 yards at a time.
Paying off the house early
This is another goal that most people would love to achieve, but seems impossible. Many people are saddled with a 30 year mortgage that they continually refinance every few years and thus never really seem to make much progress in paying off the house.
Same deal here. Don’t focus on the thousands of dollars you have left on your mortgage. Focus simply on what you can do. For example save up and make the equivalent of one extra payment on the principal each year. This can cut several years off your mortgage. If you get a bonus from work, or some unexpected money from somewhere put some of it on your principal. When you get your other debts paid off take some of that money that you were sending out in payments on credit cards or other debts and put it on your house. By doing just a little extra on a consistent basis over time, you will be amazed how much progress you can make.
Financial success comes one play at a time
This is such an important concept and applies to so many areas of life. Need to lose weight? You do it one small decision at a time. Need to stop a bad habit? Take it one day at a time.
The key is to string together small goals that aren’t overwhelming. Most success in life does not come in a big bang. It comes when we make small wise choices day after day. If you make a few good choices you’ll eventually score. Do that enough times, you’ll win the game. Do that enough times and you’ll be a champion.
What dream do you have today that seems too big to ever achieve?
Photo credit: Au Kirk (creative commons)