5 Money Lessons From Cricket This IPL Season

You would be surprised to know that this age-old sport consists of rules and features which can be used as analogies to learn parallel lessons in the world of personal finance. Here are some of these with the impact they would have on your financial planning plus some pro tips for you. 

1. Don’t step out into the field without protective gear 

Impact: Not taking adequate precautions can make players vulnerable to injuries on the field. Similarly, if your financial planning does not have an element of protection, it exposes you to several risks. 

Tip: Before you start investing for wealth creation, secure yourself against the risks to finances, life and health. An emergency corpus, a health cover and life insurance are a must to safeguard your and your family’s financial interests. 

2. Stay put for the long haul 

Impact: Giving in to the adrenaline rush or giving up under pressure has often been the undoing of several batsmen. This is akin to investors who, in their bid to make a quick buck, or due to panic, exit during a market downturn and suffer losses. 

Tip: Legendary knocks require grit and patience to tide over turbulent phases. Equity investors should invest for the long-term and not be perturbed by short-term volatility. 

3.Don’t bank on a single player 

Impact: A star player might hog the limelight with some match-winning performances, but relying on a single player won’t work in the long-term. Investors too should refrain from placing huge bets on a ‘promising’ sector. 

Tip: Experts advise against focusing on a single sector as it leads to concentration risk. Focusing on sectoral funds can both lift as well as sink your portfolio. To mitigate the risk quotient, you should spread your bets. 

4. Communicate well 

Impact: Lack of communication and poor calls from batting partners can lead to run outs. Not keeping one’s family in the loop on investments, liabilities and insurance can have similar unpleasant consequences. 

Tip: Keep your family members, especially your partner, informed about investments and insurance. This will help them take charge of financial matters if you are in any way incapacitated. 

5. Keep the asking run rate in check 

Impact: Waiting for the slog overs to do the major scoring is a bad strategy. It’s best to start early when it comes to making runs and also when it comes to investing. 

Tip: Late start means investing a lot more to build the same corpus. Early start can help achieve long-term goals such as retirement or children’s higher education relatively easily