Sports have always lent themselves easily to moralistic metaphors. Simon and Garfunkel’s “The Boxer” uses the image of a tattered, beaten man to tell a poetic story of endurance. The film (and the book it was based on) "Field of Dreams" struck a chord with American audiences, arguably because of its use of the Great American Pastime — baseball — as a symbol of American innocence.
But what about finance? Do sports offer didactic lessons in how people can improve their spending? Manage their debt? Invest more wisely?
Richard Barrington, a contributor at Forbes, thinks that not only can a sport teach us about money, but a specific player’s career can be a lesson in the dangers of financial hubris.
In his article “What A-Rod’s suspension can teach you about personal finance,” Barrington explores the rise and fall of one of America’s most controversial sports stars, Alex Rodriguez, and draws connections to lessons in personal finance.
“You may have a lower profile than a star ballplayer,” Barrington writes, “but your reputation is financially important too.”
According to Barrington, the now notorious Rodriguez, who has long been steeped in performance enhancing drug scandals, has suffered professionally for what many feel to be his reckless behavior and morally objectionable strategy for success.
So what does this have to do with finance? Barrington cautions his readers to take a lesson from A-Rod’s public “indiscretions,” reminding them that “what you post on social media may cost you job opportunities."
“Your credit history is another example of how your reputation can have financial repercussions,” Barrington continues. “If you aren’t careful with your credit history, you may find you don’t qualify for the best rates on mortgage loans or credit cards — you might not even qualify for credit at all.”
Allan Roth, in his CBS Moneywatch article “What college football taught me about investing,” made a more positive application of a sports metaphor.
The core value that college football taught Roth, according to his CBS Moneywatch article, was to expect the unexpected.
Roth recounts that in his college days, the University of Colorado was a football force to be reckoned with. As a student there, he loved the excitement of game time. Once he started attending graduate school at Northwestern, which he says set an NCAA Division I record for the most consecutive losses, he began to miss the thrill of rooting for a winning team.
“To say it was painful at times to watch them play would be a major understatement, though our opponents did tend to take it easier on us after racking up a 50 point lead by halftime,” he recalls. “I was just as sure NU would remain in the cellar as my simple and compelling logic noted a private school in the Big Ten couldn't compete with all public schools many times its size.”
But as he wrote on Wednesday, things didn’t always stay the same for the NU Wildcats, which were ranked 17 in the nation last year by the Associated Press.Comment on this story
“What was wrong with my college football logic?” Roth writes. “Pretty much everything. I assumed the status quo would always continue.”
Accepting the status quo as a constant, he says, is one of the easiest mistakes to make in investing.
“We can be pretty sure that some of the ten most valuable companies 20 years from now will be ones we've never heard of today,” he writes toward the article’s conclusion. “They may even be in industries that don't exist today.
“When it comes to investing, the media tends to predict the status quo,” Roth concludes, “just as I did decades ago in college football.”