Seeing as how it is the middle of summer, I recently decided to watch my favorite summer movie…The Sandlot. If you aren’t familiar with The Sandlot, you should be. The Sandlot is about a group of kids that share a common bond: baseball. One summer, they get themselves into a pickle (the biggest any of them have ever seen!). Throughout the movie are great quotes, funny reminders of a simpler time, and hilarious situations that can only be shared between best friends. As I watched the movie this last time (the 30th time of my life), I wondered if there are any financial lessons that I could share with my readers. You’re in luck, there definitely are…
Have a Plan
Anyone that reads this blog knows that I am a big advocate for financial planning. After all, a goal without a plan is just a wish. Any lifelong goal deserves to have a strong plan of action. Most Americans wouldn’t dare go on a road trip without having a plan but don’t put forth that same due diligence when it comes to their financial future. Lesson #1 from The Sandlot, as exhibited by the great Squints Palledorous, is to have a plan.
Have an Emergency Fund
A recent study shows that close to half of all Americans could not afford a $400 surprise expense. Those that cannot will have to resort to using credit cards, personal loans, or just fail to cover it at all. It is important to start working on saving up an emergency fund. I would suggest starting with a goal of 3 months worth of expenses. As time goes on, you can up that to 6 months worth of expenses. Don’t let an unforeseen expense derail your financial plan. In the movie, Smalls hit a home run. Great, right? WRONG. Problem is, A) it wasn’t his ball and B) they didn’t have any backup baseballs. The gang at the Sandlot had to scour the lot for bottles to turn in for the $.98 needed for a backup ball. Did I mention that the ball Smalls hit over the fence was signed by Babe Ruth? If they had planned ahead of time for the occasional home run, they would not have to panic when someone hits the long ball.
Don’t Wait Until “You’re Ready”
There is a savings problem in this country. Many people are waiting far too long to start saving for retirement. Oftentimes, they have convinced themselves that they will start saving “when they are ready” or when they get a promotion. Stop kidding yourself, life will always throw you curveballs. You’ll never be 100% ready. Just get out there and do it. Smalls knew he wanted to meet new friends when he moved to town and he went to play ball with the guys to do so. He was the opposite of ready, in fact, he risked humiliation. But he put himself out there and went for it. Start investing today, don’t wait for “the right time”. Don’t be a goofus.
Master Your Craft
Become undeniable. Practice until you are perfect. Outwork everyone and become a beast in your industry. The learning never stops and there will always be innovation needing to be conquered. There are heroes and then there are legends. Become a legend. Mastering your craft can lead to more financial opportunities than you ever thought possible.
Don’t harass yourself with following market movements day after day. Take a long-term view and understand what is under your control. Tune out all of the noise from the media. Remember, they want to sell headlines and invoke fear. Every year there are predictions of a bull market as well as a bear market. For every prediction that is right, there are the same amount that are wrong. Focus on your risk management and your asset allocation and try to tune out the rest. If the kids from the Sandlot would have tuned out Squints and his story of Mr. Mertle, they could have saved themselves a lot of trouble. Selfishly, however, I’m glad they listened to Squints and created my favorite summer movie.
*Bonus Tip: Don’t Use Chewing Tobacco and Get on Fair Rides
If heroes get remembered… but legends never die… then that means The Sandlot will live on…