3 Personal Finance Lessons We Can Learn From the Chiefs 2022 AFC Championship Loss
It’s only been a month or so since the Kansas City Chiefs lost to the Bengals in the AFC Championship game but it’s still a very fresh wound. I’d be lying if I didn’t say that I’m still shocked at how the game turned out, namely the second half and over time. How could something start off so promising and end so devastating?
It’s a bummer that we didn’t get to see our Chiefs playing in the Super Bowl. Regardless, life goes on and it’s a great reminder that much can be learned from failure.
Even though the game didn’t result in what we’d hoped, there's still much we can learn from it when it comes to our personal finances.
Consistency is King
One of the most frustrating things Chiefs fans witnessed during this season was a lack of consistency. We saw the Chiefs play at both ends of the spectrum in different intervals.
We’ve seen the explosive offense do what they’ve always been capable of, with the help of the freshly formed offensive life. We’ve also seen the defense step up and become a huge anchor for the team, albeit not perfect.
With that being said, we’ve also seen the gut wrenching side of the Chiefs as well. We’re talking about turnovers, atrocious defense (schemes and personnel), and bottom-tier offense that have all been untimely. It’s been painful. Fortunately, their talent was able to save them more times than not. But eventually, they faced opponents where talent alone wasn’t enough.
To be consistent is to be regular, uniform, constant, and steady.
This brings me to my first point: consistency is king.
It was very clear in the AFC Championship that the Chiefs lacked consistency, especially in the second half. The second half Chiefs looked nothing like the first half Chiefs and this was something they couldn’t “magically” get past.
Consistency is the product of disciplined repetition and habit.
Intensity results from extreme force, degree, or strength.
Consistency shouldn’t be confused with intensity which tends to be stronger in nature but also shorter in duration.
As the quote goes, “The flame that burns twice as bright burns half as long.”
These two aren’t mutually exclusive. But if you had to pick one for overall long-term financial health, consistency is it.
As you can imagine, consistency is vital when it comes to building and maintaining a solid financial foundation.
Consistency in Your Personal Finances
When it comes to your personal finances the same principle is true.
Those that make quality financial decisions, for their personal situation, on a consistent basis tend to have more financial success than those that make great financial decisions occasionally or poor financial decisions frequently.
This isn’t to say that we have to be perfect because we’ll never be. We’ll all make bad financial decisions at some point in our lives. But the goal should be to minimize poor financial decisions and repeat/maximize the good ones.
Here’s what consistency looks like within some different areas of our personal finances:
Living beneath your means via budgeting and tracking of expenses each month
Saving a percentage of your income for retirement and other goals each month (automating if possible)
Systematically paying off debt and reducing debt exposure
Finding ways to increase your income on a periodic basis
Routinely reviewing all your insurance coverages to confirm adequate protection
Optimizing your tax situation in order to minimize how much tax you’re paying
Routinely deploying resources towards what you value
These are just a handful of ways to establish consistency within your personal finances. Personal finances are personal for a reason so you’ll likely know the key areas within your finances that you’re lacking consistency in so consider focusing on those first.
Your consistency will largely determine your financial success and your ability to maintain it. If you’ve struggled maintaining consistency in the past then this is where it makes a lot of sense to hire a professional, especially if you aren’t a DIY’er.
I love what James Clear says in his book Atomic Habits, “You do not rise to the level of your goals. You fall to the level of your systems.”
Momentum is Powerful
During the AFC Championship game, we practically see the momentum change during the Chief’s last drive before halftime. They march down the field and opt to try for a touchdown instead of taking the field goal. This resulted in 0 points that drive. This coupled with halftime was enough to seemingly break the Chief's momentum.
Historically, the Chiefs have been on the opposite side of the pivotal momentum shift. In the past, they’ve been the ones to have a game changing play that shifts the momentum and the trajectory of the game.
My second point: momentum is powerful.
When I think of momentum I think about Newton’s first law of motion (also called the law of inertia) which states that an object at rest stays at rest and an object in motion stays in motion with the same speed and direction unless acted upon by an unbalanced force.
When it comes to personal finances, momentum has the power to carry us especially without us actively thinking about it.
Momentum in Your Personal Finances
I’m a huge proponent of automating the things that we can (i.e. saving, investing, expenses/bill pay, giving, etc.) so that the benefits will compound upon itself.
When it comes to our personal finances the name of the game is how quickly we can establish momentum and how long we can keep it. Like everything, we have to start small and make increases over time. But the real fruit comes once it is established.
Areas to establish momentum in your personal finances:
Mastering the planning and tracking of your cash flow (income and spending)
Establishing a savings rate, if you haven’t already, and working to increase it over time as cash flow permits
Investing your long-term savings in a diversified portfolio that fits your time horizon and risk tolerance
Structuring your investments to compound via dividends, interest, capital gains, cash flow, etc.
Utilizing a strategic debt elimination strategy, i.e. debt snowball or debt avalanche, to pay off debt faster than the “standard or minimum repayment timeline”
These aren’t the only ways to create and increase momentum within your finances. Again, you’ll likely have more insight of which areas are key for creating and increasing momentum within your finances. Also, don’t forget that automation (i.e. automatic monthly drafts into investment accounts, automatic reinvestment of dividends, automatic extra debt payments, etc.) can be a significant way to create and build your momentum.
A great way to track how well you’ve been at maintaining consistency and momentum is to periodically review your net worth.
Net Worth = Assets (what you own) - Liabilities (what you owe)
Resilience Matters
Failure happens, it’s part of life. If you don’t fail then you aren’t trying or you aren’t taking any, or enough, risk.
The Chiefs have been a pretty resilient team since Andy Reid has assumed the head coaching role. So it’s encouraging to see them pick themselves back up and get back to work after a disappointing loss. They have a lot of work to do this offseason to get back to Super Bowl but I believe they have what it takes.
Just like with the Chiefs, we can play the victim card and wallow in self pity OR we can get back up and strengthen our personal finances through what we’ve learned.
Resilience in Your Personal Finances
When it comes to resilience within your personal finances, we don’t have to be perfect but rather we need to learn from our mistakes and minimize future mistakes (especially the same mistakes).
The common denominator with those that thrive within their finances is that they don’t stay down for too long. They get back up and implement what they’ve learned into their financial plan and keep on progressing towards their goals.
The other common denominator with those that thrive is that they actively seek counsel and accountability in order to reduce the chance of having to be resilient in the first place (i.e. avoiding disaster or mistakes). You don’t have to embark on this journey alone and most struggle because they try to do this. The proper advice and accountability can mean a world of difference for your personal finances. Or as the saying goes, “An ounce of preventative is worth a pound of cure.”
We can learn all sorts of lessons about personal finance from day to day life, including football. Thanks for letting me cope with the Chief’s AFC Championship upset via personal finance lessons! And as always, don’t hesitate to reach out to our advisors should you need assistance with your personal finances!
