Chess and investing: Why time is worth more than money
Nov 14, 2014, 2:04pm CST
By Susan Polgar and Douglas Goldstein
Susan Polgar is a chess grandmaster and head of the Susan Polgar Institute for Chess Excellence at Webster University. Douglas Goldstein is a certified financial planner. Together they are authors of “Rich As A King: How the Wisdom of Chess Can Make You a Grandmaster of Investing,” in order to give people a simple, strategic approach to taking care of their money. They agreed to share some of their insights and strategy from the book.
In the same way that small changes in your savings and spending habits can help you to gather quite a fortune over time, not making the right moves now can cause you to suffer from the opposite outcome. A chess game where Player A makes two moves for every one move by Player B would quickly end with a devastating loss for Player B. Likewise, you will experience a similar effect if you save your money in low-yield bank deposits and then stand by and watch inflation eat away at its value. If you keep putting off starting a savings program until tomorrow, you’ll be like a chess player who says to her opponent, “You can make the first five moves in the game, and then I’ll start to play.”
Imagine if the twin sisters Ann Landers (“Ask Ann Landers“) and Abigail (“Dear Abby”) had both decided, at age 25, to save $5,000 annually for retirement… except Abby forgot to start mailing in her checks until she was 30. If they retired at 65, and if they both averaged 6 percent return on their investments, Ann would have accumulated $820,000 while her twin sister would only have amassed $591,000. Simply missing those five years of savings at the beginning would have cost Dear Abby nearly a quarter of a million dollars.
“Act now” is certainly an important lesson, though it doesn’t necessarily mean to always invest money. Take the time to review all of your options, including the possibility of keeping money in the bank. However, don’t equate procrastination with a strategic delay. The clock continues to tick, taking time away from both chess players and investors, so make sure that you advance your strategy every step of the way.
Source: http://www.bizjournals.com
Good advice. Chess players are smart.