Financial Lessons From a Chess Board
March 31, 2017I don’t always watch 60 Minutes anymore, but when I do, I am reminded that I have liked it since I was a kid. That brings up a few points. First, the show has been on a very long time! Second, I was a weird kid – watching 60 Minutes while my neighborhood friends rode their bikes. I’d join them before and after so it’s not like I wasn’t social too…just nerdy.
In a recent episode, there was a story about a man teaching chess to kids in Mississippi. Google “60 Minutes chess” and watch the quick story. Here’s a quick synopsis of the segment. What I found fascinating is that while he’s teaching the kids to play chess, he is actually teaching them about far more than that. He’s teaching incredibly valuable life lessons.
I have some odd thoughts on parenting, but I’ve summed it up this way: If I teach my kids how to win with class, lose with grace and think through a decision making process, I’ll feel like I’ve prepared them for the real world. That’s a part of what he is teaching these kids.
Chess, like life, requires patience and constant learning in order to succeed. They kids, like all of us, learn more from their losses than their wins. For them, this is because they review the losses for what they could have done better. The sting of a loss is a great teaching tool.
In a way, conversations about money can have that flavor too. I’ve talked with a lot of people who start their conversations with me by saying “I’m lousy with money” or “I’ve made a lot of mistakes in my financial life.” The good news is that they recognize that they could have done things differently. The downside is that they haven’t worked with anyone, like a coach, who has been able to help them review their mistakes and provide suggestions for ways to improve based on those losses.
When I hear conversations start that way, I immediately stop the conversation and tell people that they are no longer allowed to speak negatively about their financial skills. I ask if they were handed a violin and put on stage with the New York Symphony, if they’d do well or if they’d fare well in a chess match against Bobby Fisher (for those with great memories) or Magnus Carlsen (for a more current reference) if they have never played before. The answer is a universal “NO.” Those are skills that are honed over a lifetime of practicing and learning.
Managing your personal finances is way easier than mastering chess or the violin so it won’t require nearly as much effort or skill. In fact, it’s relatively simple to become a financial success. There have been years worth of blog posts in this space giving little tips about how to become financially well/secure. I’ll close by summing up several years of posts in a few bullet points:
- Spend less than you take home.
- Save 15-20% of your income for retirement.
- Have a healthy emergency fund. (Start with $1,000, get to $2,500, and then get to 6-9 months of expenses over the course of time.)
- Pay attention to where you spend money. No one will care about your money as much as you, so guard every dollar that you work hard to earn.
- When you mess up, which we all do, figure out why. Learn from it and don’t repeat it.