Financial Diva's 'Master's' Of Finance

Most people aren't aware how the game of golf is closely related to some basic rules of long-term investing.

Monday, April 18th 2011, 6:40 pm

By: News 9


Victoria Woods, Financial Diva

I have been an Investment Advisor for over 20 years. I have a love for what I do and would not have made it this long if I didn't.

A little known fact about me is that I also LOVE golf! When I have time away from my clients, I try to get out on the green for some tee-time.

In fact, next week I'll be traveling to attend the Master's Tournament in Augusta. I can't wait!

As you know, golf is a rewarding game that takes patience, skill, and consistency most of all. Most people aren't aware how the game of golf is closely related to some basic rules of long-term investing. Here are three lessons we can learn from this timeless game:

  1. There are some things you can't control: Every golfer knows that regardless of their strategy or skill, there are still many variables that can hurt their game. The weather is a great example. Blistering heat, Oklahoma wind, or even a surprise shower are totally out of the golfer's control. You just have to deal with it and keep going. This is exactly true for our investments. It's called market risk. Wars, recessions, disasters – these all affect our "game" but are totally out of our control. We just have to deal with it and go on, otherwise you could end up making a mistake that could cost you dearly.
  2. The score is cumulative: The great thing about golf is that you can have a few bad strokes but still come out on top. With golf, it's all about having the right score in the end. Hitting poorly on round 3 may not hurt you long term. A gust of wind coming out of nowhere and ruining an otherwise perfect drive can be overcome in the end. Again, this is similar to investing; it is about the cumulative score and what happens over the long term, not the short term. Patience and commitment go a long way.
  3. Consistency always outperforms occasional brilliance: The odds against an average player hitting a hole in one are 12,000 to 1. I wouldn't bet my money on those odds! When it comes to golf and when it comes to finance, the winning strategy is the same – consistency. Keep your head down, follow-through. Doing the right things over and over again leads to success in the finance world, just as it does in the world of golf.

We can learn a lot on the green. Follow these steps, and you'll be well on your way to being a "Master" of your finances!

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