Lessons Fantasy Football Can Teach Your Kids About Investing
Fantasy football has long been a popular game among friends, co-workers, and families as a means of entertainment and competition during the NFL season. I readily admit my fascination with the game and continue to learn valuable lessons each year that aid me in my quest for the championship.
Parents often struggle to find ways to connect with their teens, and while I do not approve of teaching their children to play, getting their children involved in fantasy football can create valuable lessons that translate well to the financial world.
Take risks
If you’ve played fantasy football, then you’re familiar with the term “kicking yourself.” This often refers to the self-loathing that occurs after you’ve played a bad quarterback against a bad defense with the expectation that the quarterback will have a magical day. On Sunday night you realize that you just played like a bad quarterback. Meanwhile, Peyton Manning throws 4 touchdown passes in cold weather against the best defense in the league … on his bench.
Taking financial risks can be a very similar experience. When making investment decisions, it is important to understand the facts and the possible outcomes. The last question is “Can I live with myself if this fails?” If you’ve done your homework, understand the downsides of investing, and feel the risk is worth it, then you should be able to live with the result. Big investors understand these tradeoffs between risk and reward and can generally sleep at night knowing they made the best decision given the information.
Find the coveted sleeper
Finding courage is an important aspect of fantasy football. Championship teams are formed in the later rounds of the draft and on the waiver wire by finding players who exceed their projections. Did you select WR Josh Gordon from the Browns this year despite a 2-game suspension to start the season or did you pick up RB Zac Stacy from the Rams after the injury virus hit St. Louis?
Finding the next great sleeper is about recognizing value before it becomes general knowledge. Once everyone knows it, the value goes down. This skill can help your kids be proactive in finding simple deals on everyday purchases or eventually larger purchases like a college education or a car. Not to mention, the ability to discover valuable investments can have a huge impact on your net worth in the long run.
Know when to walk away
Has your running stallion ever become a failure? Past performance and name value can make it very difficult to drop a player. Ask the owners of Ray Rice this year. One of the hardest parts of fantasy football is learning to let go. It’s never easy to admit you were wrong, but if you don’t, you will lead your team to the basement.
Financial mistakes are going to happen. Hopefully you are teaching your kids about money and using tools like an allowance to reduce the chances of making big mistakes in the future. Learning to tackle problems as they arise and progress can be an invaluable tool in the investment world and in life. Whether it’s a bad buy or a bad investment, you can use these experiences to improve your decision making going forward and reduce your losses.
Surround yourself with knowledgeable people
While I enjoy fantasy football, I am far from an expert. I have some great seasoned analysts to help shape my draft and weekly roster decisions. After all, they are doing it day after day at a level that I could not reach as I tend to my family and my career. Success is very difficult to achieve alone. Everyone needs a good team to help them consistently win championships.
The ability to build a team of talented people is a fantastic skill that children need as they approach adulthood. Hiring a financial advisor or investment manager has been shown to greatly increase your chances of financial success. I firmly believe that anyone can become an expert in investment management, fantasy football, or any other skill for that matter. However, if you’re not willing to put in endless hours of work to become an expert, find the people who are already doing it and put them on your team.