A New NBA Season and a Great Time to Review Your Financial Strategy

Basketball fans are eager for October when the NBA season kicks off. It is a new beginning, a fresh chance for teams to showcase their unique talent and strategies for staying at the top of the leaderboard in a wholly unpredictable sport. One day you are winning, everything is going great, and the next, you are in a slump, wondering if you will ever get out of it.

As with NBA basketball, the financial world can be complicated and overwhelming. Both involve numerous moving parts, including salaries, setbacks, and logistics, making any attempts to comprehend every last detail a formidable challenge for fans and analysts. Moreover, basketball and finance aren’t just comparable in terms of their complexities. The strategy and skills employed in the NBA also share some surprising similarities with those in the financial world.

Here are five similarities that a basketball fan might recognize and be able to apply to their financial journey.

You have to have offensive and defensive strategies

There has to be a balance of well-designed offensive and defensive strategies. Creating these strategies requires knowledge, being flexible in an unpredictable environment, having open and honest lines of communication, and understanding your risk tolerance. You want to be offensive, but not so much that you risk your financial condition. You want to be defensive regarding your finances but not so scared that you keep your money in accounts with little growth opportunity. There has to be a balance.

Set achievable goals

Having achievable goals can make a journey much more meaningful. It allows you to stay focused when day-to-day life can often seem mundane, and the temptation of procrastination is hard to ignore.

You have to be willing to evolve

Basketball is a sport that is particularly susceptible to changes, with players and coaches switching teams annually and, winning streaks suddenly becoming losing spells. In contrast, players and coaches keep trying new plays to determine what will work. Being flexible allows you to stay on top of an ever-changing world and market.

Preparation

Being prepared means taking steps, often years in advance, to pursue a specific goal or set of plans. When it comes to financial independence or winning championships in sports, making critical decisions when it matters, staying disciplined, and effectively visualizing where you hope to be can help set the stage for your future.

You need competent coaching

Whether you are an NBA player or someone interested in designing a financial strategy, having a competent coach that understands the current environment and what you are trying to accomplish changes the game's stakes. Any plan of action involves risks; however, receiving guidance from an experienced coach in sports or a financial professional in the financial world provides you with a chance to potentially manage some of the risk and to recognize problems before they have an opportunity to knock you off course.

Consider consulting a financial professional to review your financial strategy and condition and determine if any modifications need to be made. An experienced financial professional, like a basketball coach, can recognize issues or areas that need adjustment as you develop a confident financial game plan.

Important Disclosures

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.

All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

This article was prepared by LPL Marketing Solutions

Sources:

Associative Learning - an overview | ScienceDirect Topics

LPL Tracking # 1-05377602