As a college professor, you’d think I’d be a pretty smart guy. Well, maybe I was when it came to teaching classes like “International Political Economy,” but not necessarily when it came to personal finance. Only when I began to see it in terms of something I liked to play (Fantasy Football) did I get excited about it.
Of course I wasn’t a complete dummy about personal finance. As my wife frequently points out, I’m a relatively frugal guy. I always set aside some money for the kids’ college and retirement, taking advantage of matching contributions. And I always put the money in some place that seemed pretty stable. How could that be anything but smart?
Like a lot of Americans, I got a rude shock in 2008 as the stock market and economy tanked. Fortunately, that frugality helped, but it only goes so far, right? I wondered if I couldn’t be just a little smarter about my financial situation.
You’d think I could rely on my teaching subject, but I mostly deal with macroeconomic (big picture) stuff, and what happens in the political arena. I needed some a little more microeconomic for personal finance. And I found a great analogy in the most unlikely of places: fantasy football.
My wife and I started by hiring a financial planner, which is a bit like picking a coach (to keep the sports analogy). He praised us for our thrift, but made some suggestions about how to improve upon our situation.
When I got to figure out the funds and what they were invested in, I wondered about the coach. He and his staff seemed pretty nice, but were they on the level? I didn’t want this to be a Bernie Madoff situation. What if he was pushing funds that would benefit himself, or someone else, instead of me? So I went to Yahoo Finance’s site. I tried to see for myself whether he picked the best stock for me.
On Yahoo Finance, I could look up a stock like C (Citigroup, Inc.) and compare it to another one: BAC (Bank of America Corporation), or even WFC (Wells Fargo & Company), to see how each is performing in the short-term, or even over the long-term.
It’s just like Fantasy Football. Like looking through a running back’s statistics (should you draft Maurice Jones-Drew with the Jacksonville Jaguars or Reggie Bush with the New Orleans Saints), you could see how well the fund performed in recent weeks, or even months. You could also project how well that fund would do into the future, like determining how well your QB from the Atlanta Falcons (Matt Ryan) does on the road, in cold conditions, to predict how well he’d do against the Green Bay Packers in Lambeau Field, or whether you should opt for the Tampa Bay Buccaneer Quarterback (Josh Freeman) playing the Tennessee Titans.
I found a fund that was just about as good as the one my planner recommended. So when we met next, I told him that I wanted the fund I chose instead. He looked over my numbers and said “Both are pretty comparable, but OK!” It was a good way to remember who the coach was and who the owner was. And an owner can’t be an absentee owner. He or she has to hire a coach, but can’t look the other way, especially when it comes to personal finance.
