Five ways playing golf is like caring for your portfolio

Knowing where you are is a great place to start

A recent poll we did in our weekly newsletter, The Axiom, indicated that a large majority of readers love golf. Nearly 40 percent of those polled said that they have a handicap of 20 or better; and almost 60 percent of poll takers described golf as “wonderful.”

The poll results shouldn’t be too surprising, because caring for your finances has many similarities to playing golf. Here are five ways playing golf is like caring for your portfolio.

1. Know where you are

Most successful golfers don’t try to play every course – and every hole of the course – the same. Understanding the terrain of the course you’re on – including the danger of leaving the fairway, the risk and reward of taking chances at key points, let alone the current conditions like wind and the responsiveness of the greens will all have an immense impact on your play.

Many of the people who seek our counsel as financial professionals lack awareness of where they are. They know they have some money in an IRA, but are unsure of how much or what the IRA is invested in. Some don’t know their net worth, the calculation of assets minus liabilities.

Knowing where you are is a great place to start your financial trek – and a terrific way to understand how to play most golf courses.

2. Practice & process

There’s a strong similarity between the best golfers and those dealing with their finances astutely: both understand the necessity of developing key processes and routines, which in turn help to build better fundamentals and improved thinking.

Really good golfers spend time on the putting green and working on the game from all sorts of areas on the course. Developing fundamental financial routines, like paying yourself first, taking advantage of employer contributions to your 401(k) when you can, or even budgeting, can help build a stronger thought process in approaching your finances and goals.

3. Understand that goals change

Most golfers understand that goals change as our interest and time on the course changes. You may have once been a mid-80’s golfer, but now after some years of playing regularly, have improved your play to a five handicap.

It’s often the same with finances. When a major local retailer went out of business, we recently saw an influx of people who had to deal with that unfortunate circumstance. Each had to make critical decisions about their 401(k) accounts and the consequences of those moves.

Goals and priorities change as our behavior – and life itself – changes. Know what you’re shooting for – and understand that may change as time passes.

4. Keep track of your progress

No matter how beautiful the sport and the courses you play, after hours of golfing, many of us can forget to track our growth as golfers. It might be as simple as keeping old scorecards, but progress could also be in your improved swing, peaceful demeanor, or improved tactics.

The same can be said for your portfolio. The kneejerk reaction may be to look at performance, but monitoring your credit score, your debt, even how often you re-balance your portfolio can tip off a changed approach to your finances.

5. Most great ones have a team

Through golf history, we’ve seen a few golfers who have developed his or her swing; built a nutrition and fitness schedule; chosen a tournament schedule; or selected their own clubs themselves. But in almost all cases, every great golfer has a team of people who surround them so they can be at their best.

It’s not much different with your finances. Sometimes, it’s hard to stay focused on the course when you’re considering so many other variables. It may be hard to juggle tax consequences, rebalancing, and your net worth.

Make sure you rely on financial professionals you can trust to help you try to reach your financial goals.

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