I started serious Investing Journey in Jan 2000 to create wealth through long-term investing and short-term trading; but as from April 2013 my Journey in Investing has changed to create Retirement Income for Life till 85 years old in 2041 for two persons over market cycles of Bull and Bear.

Since 2017 after retiring from full-time job as employee; I am moving towards Investing Nirvana - Freehold Investment Income for Life investing strategy where 100% of investment income from portfolio investment is cashed out to support household expenses i.e. not a single cent of re-investing!

It is 57% (2017 to Aug 2022) to the Land of Investing Nirvana - Freehold Income for Life!


Click to email CW8888 or Email ID : jacobng1@gmail.com



Welcome to Ministry of Wealth!

This blog is authored by an old multi-bagger blue chips stock picker uncle from HDB heartland!

"The market is not your mother. It consists of tough men and women who look for ways to take money away from you instead of pouring milk into your mouth." - Dr. Alexander Elder

"For the things we have to learn before we can do them, we learn by doing them." - Aristotle

It is here where I share with you how I did it! FREE Education in stock market wisdom.

Think Investing as Tug of War - Read more? Click and scroll down



Important Notice and Attention: If you are looking for such ideas; here is the wrong blog to visit.

Value Investing
Dividend/Income Investing
Technical Analysis and Charting
Stock Tips

Thursday, 23 October 2014

How Chess Players Can Win at Personal Finance


Read? Time Can Change Many Things Including Passion, Love and Hobby (2)


CW8888: Probably the reason why Uncle8888 can win at personal finance. LOL!








One well known, but seldom practiced, strategy in chess is to think a few moves ahead. Chess players are able to increase their odds of success by simply planning for a variety of possible outcomes in the near future. 

The ability to anticipate future problems and opportunities, a skill that chess players often develop, can also help your personal finances tremendously if you apply those abilities to your investments. 

Your financial situation can be improved if you keep an eye toward the future. When you think a bit further down the road you are more likely to make the decision that has the maximum benefit over the long term. Here's how a chess master would approach some common financial situations. 

A chess master buys when demand is low. Are you looking at Halloween costumes? You could have saved a good chunk of money if you bought the outfit last year at the beginning of November. And speaking of clothing, winter clothes like jackets and coats are always on sale in the spring and short sleeves in the fall. Those who think ahead know that they will eventually wear the clothes when the correct season rolls around again and buy them now at a huge discount. The same strategy works for traveling. Everyone likes to go at peak season, but shoulder season trips are typically cheaper and are often a better trip because there are fewer crowds. 

A chess master carefully picks the best college and major. With college costs skyrocketing, it's becoming more and more important to go to a sensible college that doesn't leave you in a massive amount of debt just as you are starting your career. There are certainly cases where a high cost private college is worth the money, but smart chess players weigh the options and pick the path that gives them the most bang for their buck. They consider the type of job they are going to be able to get by getting a degree at a specific school and how long it will take to pay off the loan if they need to take on debt to finish school. It's certainly worth considering if the fame that accompanies going to a more prestigious school is worth the extra financial hardship. Some high schoolers might even ponder whether they need a four-year degree for their chosen career field. Every high school graduate should contemplate all of their higher education options so they don't graduate from college with so much debt that it will crush their financial life for decades

A chess master stays the course because he is able to invest rationally. One of the most damaging moves inexperienced investors make is bailing out when stocks significantly decline in value. Staying the course is difficult when everyone is panicking and making you fear that you'll lose everything if you don't sell your investments. Yet, investing should be based on expected returns. When volatile investments go down, the expected return generally goes up. If anything, there's now a higher chance the investments you own will generate a higher return. A smart chess player might even buy more when the market is low so they can reap the rewards of the recovery. 

 
A chess master will maximize tax-advantaged accounts. Many people have taxable investments earmarked for the long term even while not contributing the maximum possible amount to retirement accounts, which means they are paying more tax than they need to. If you know you don't need the money in the short term, you can get tax perks by contributing to traditional and Roth 401(k)s and IRAs. Long-term investors will come out ahead by stashing as much as they can in tax-preferred retirement accounts. 


With a bit of practice, chess players develop the discipline to think ahead. Start planning a few moves ahead and your finances will benefit too. 


BTW, Uncle8888 is fisherman too. Patience. 

Chess and Fishing!

Planning and Patience hor!

 

 


David Ning is the founder of MoneyNing.com .

2 comments:

  1. personally, i play a lot of chess in the past, i can vouch that this has helped me not to make irrational decisions and to be decisive when the time comes to be decisive.

    ReplyDelete
    Replies
    1. Chess players think a few steps ahead of "What if" and also have to counter the unexpected too.

      At times, we have to make calculated risk to lose a piece first to win. LOL!

      Delete

Related Posts with Thumbnails