Competitive Maxims Applied to Personal Finance

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As some of you know, I spent a year or two in my past playing competitive Magic: the Gathering (a card game with organized tournaments), earning enough winnings for the hobby to pay for itself. I was never able to compete at the highest levels, mostly due to time constraints from my career and my marriage (which seriously limited how much time I could devote to gaming).

winNear the end of that period in my life, I picked up a very interesting book by David Sirlin called Playing to Win. David was a competitive player of tournament-level Street Fighter (a video game) who went on to be involved in the production of several games, including Super Street Fighter II Turbo HD Remix. The book outlines psychological strategies that serve anyone well if they’re looking to compete seriously in any sort of gaming or sporting environment. If you’d like, you can read the book for free on Sirlin’s website.

So why would I mention such a book on The Simple Dollar?

A few days ago, I stumbled across this book again and sat down to read it, mostly as a nostalgic reminder of a certain period in my life. As I read through the pages, I began to realize that most of the ideas presented in the book actually apply very well towards successful personal finance.

Here are some ideas that match up that really intrigued me.

Some of the made-up rules you have in your head are holding you back. Every single person lives by some set of rules that they’ve made up in their head. These rules tell us how to behave in certain situations, what products to buy, who to associate with, what to do on a boring Friday evening, and so on.

Most of the time, these rules are worthwhile guides. They can keep you out of dangerous areas, help you to make sensible choices about who to associate with, and so on.

However, sometimes these rules guide us in a poor fashion. They encourage us to buy things we shouldn’t. They encourage us to waste time on unimportant things (mostly due to a poor definition of “important”). They encourage us to spend too much time on our careers – or not enough time. They encourage us to spend too much time on our families – or not enough time.

Breaking through these “rules” by getting rid of the ones that don’t work is a powerful step towards personal finance success. Question every action that you take, because each action takes time and energy and (often) money and it takes those things away from other elements of your life. Work to break the routines that are out of line with what you truly want in life.

You don’t get ahead by doing splashy things to stand out. You can have the best attention-getter in the world, but if there’s not something behind the curtain, an attention getter doesn’t matter. You can be the richest person in the room, the most well-dressed person in the room, the most attractive person in the room, or the most technology-laden person in the room, but in the end, it still all comes down to you.

In short, you can buy a little attention, but you can’t buy the respect of others. You have to earn it, and it’s not bought. It’s earned through who you are – your actions, your knowledge, your abilities, your friendship, and your reliability.

Buying stuff to impress others might work as an attention getter, but it won’t help you actually build friendships and relationships. On the other hand, focusing your energy on improving yourself will not only save you money, but it’ll help you build the right kind of reputation over the long run.

You’re rewarded by focusing only on the situation at hand. Imagine you’re at the grocery store. You’re walking down the aisle, but your mind is elsewhere. You’re thinking about a friend or a family member, or about what you’re going to watch on television tonight. After wandering around a bit on cloud nine, you add an item to your cart.

Now, imagine you’re at the store, but you’re focused on finding the best bargain among the bread options. You study the items available, compare the prices, peek at your notes to see what the competitor’s sale price is, and find that indeed, this loaf meets your needs and is about a dollar cheaper than the other options. You add it to your cart.

Both experiences took about the same amount of time, but one ends with a great purchase in the cart, while the other most likely ends with something overpriced and not particularly matching the needs and values of the customer.

Focus on the moment. If you’re shopping, shop. If you’re driving, drive. If you’re working, work. If you’re reading, read. You’ll find that the task at hand goes much more smoothly – with much better results – when you bear down and focus just on the task at hand.

You constantly have an opportunity to cultivate valuable, positive relationships with people around you. Every time you’re in a social situation – and that includes being online – you have opportunities to cultivate a positive relationship with people around you. The more positive relationships you’ve built, the more likely it is that something positive will echo back on you.

Be positive towards the people around you. Say positive things about others. Help other people when they need it. Volunteer for the tough jobs that no one else wants to do. Participate in groups.

You’ll build relationships. More relationships means a stronger community. Everyone in that community benefits. Those benefits are passed to everyone in the community, and since you’re a part of it, you benefit, too.

When observing others, things are often not what they seem. The person in the expensive car with the expensive clothes and the expensive house is often so buried in debt that they’re scared to sleep at night. The man in the rusty car often has a wad of money in his bank account.

Remember that the appearance of someone often completely obscures the truth. People often try to cover up the truth underneath or present a truth that matches up with some false expectations in your head. It is never, ever a bad move to spend some time looking a little deeper.

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16 thoughts on “Competitive Maxims Applied to Personal Finance

  1. Interesting idea. I was caught up by a few technical items though. By “splashy” did you mean “flashy”? Isn’t cloud nine usually a descriptor of extreme happiness, not simply a wandering mind? Lastly, “The man in the rusty car often has a wad of money in his bank account.” I don’t know if I would agree that “often” is the best choice. I think “sometimes” would be more factual/accurate.

  2. The biggest fallacy in your writings is your undying belief that anyone who has an expensive car, expensive clothes and an expensive house is buried in debt. Believing this may make you feel better about yourself, but it just isn’t true the majority of the time, as you suggest time and time again.

  3. Trent maybe you should take your own advice and re-evaluate your rule that people with nicer cars and nicer things than you are drowning in debt.

    It must be holding you back in ways you don’t see and I *know* it’s holding your writing back and frustrating your readers.

  4. Ditto. They “could” be drowning in debt or have wads of money, but just as likely to be what they appear.

  5. Interesting post, Trent. I’m intrigued by your first point, about the rules you have in your head, and think that would make an good topic all on it’s own.

    It touches on challenging assumptions, as well as breaking out of old habits. I think of patterns of behavior that are remnants of the past, or held true for your parents or your childhood but no longer apply. I’d be interested to hear you develop this further.

    “Splashy” adds the connotation of affecting people in more ways than simply visually, which “flashy” would imply. A guy in a flashy suit could simply stand in the corner talking to the boss, while someone who wanted to make a splash would start a conga line.

    So is Trent discouraging the ostentation of conspicuous consumption or is he encouraging quiet competence?

  6. I understood what Trent meant when he said “splashy” and “cloud nine”. Where do these experts in language come from? (I know I ended with a preposition.) Of course I am just an ordinary person. I think that is who Trent is trying to reach not people who know everything already.

  7. Well, the splashy comment was just my ignorance (I didn’t even think it was a word). I don’t feel like I’m a language expert but every once in a while I have to vent about obvious mistakes.

    It makes me cringe when I think how the author considers writing his passion/calling, but forgets periods, or leaves off halves of sentences, or uses the same phrase or word in an article five times, or comes up with unnecessarily dramatic phrases (“my taste buds long for the sweet flavor of …etc.”).

    For me, it would be bearable if updates were made, or a comment stating “Thanks for the feedback, edits will be completed soon” was posted. However, the complete lack of attention paid to comments and errors is a bit laughable. I feel like if you want people to take you seriously at something, you cannot consistently make mistakes or errors that are preventable.

  8. “The person in the expensive car with the expensive clothes and the expensive house is often so buried in debt that they’re scared to sleep at night.”

    Or that person might sleep very well, secure in the knowledge that their hard work allows them to live comfortably. It sounds to me like you don’t believe that people deserve to enjoy the fruits of their industry. Perhaps YOU could not afford expensive cars, clothes or houses without being buried in debt (I only suggest this since you made the quoted assertion), but others may earn incomes that support that lifestyle without debt. Perhaps if you looked a little deeper you might see that the ‘debtor’ was an individual that worked hard getting a good education, applied that to a career and made wise choices along the way. There is no particular virtue in driving a rust bucket or wearing rags if you can afford more expensive items.

  9. “There is no particular virtue in driving a rust bucket or wearing rags if you can afford more expensive items.”

    Maureen — Well said! Very well said.

  10. From my experiences and observations – individuals with wealth can not afford to drive rusty clunkers, dress inappropriately or buy homes beyond their means. And outward appearances are meaningless.

  11. Carole, if Trent rarely made a mistake I could call complaining about it nitpicking, but he does this all the time. It’s just plain sloppiness.

    There’s a disconnect between what Trent tells and what he shows. He tells us this blog is (relatively) important. He listed TSD as a reason he didn’t take the job offer because the quality would suffer and it takes time.

    He tells us he’s passionate about writing and helping others but his writing is sloppy. In almost every post and that sloppiness often leads to confusion and people misunderstanding what Trent is trying to say. He makes big mistakes when giving financial advice and yes he’s not a professional but he’s prsenting himself as someone who is knowledgable but he still makes the same mistakes.

    There’s barely any acknowledgement about the questiosn brought up in the comments or clarification when there’s confusion.

    After the big career post we’ve had 4 more posts – two of them should be bullet points – fill a water bottle and drink from that and heat beans and wrap them in a tortilla for a cheap meal.

    When he did a rehash of how to save on phone bills recently he mentioned using his Skype on his iPhone. BUT there were 2 posts devoted to how it died and how he replaced it — witih a Nano. So either he has another one (which is no big deal) or he just cut and pasted from an old post and didn’t update it. That’s a problem.

    Again in the Career post almost every commenter said they wanted quality over quantity and that isn’t the first time people have said that. Yet what does he give his readers? Filler.

  12. #13 is brilliant! “Again in the Career post almost every commenter said they wanted quality over quantity and that isn’t the first time people have said that. Yet what does he give his readers? Filler.” Trent’s written two posts a day for a long time, after a while a writer runs out of ideas. But – Trent must post SOMETHING in order to make money. I’d rather see ONE post on a weighty topic per day, with editing, and spell check, polished writing, instead of two messily written filler posts. Trent would get the same number of hits, make the same amount of money (the point of this column) and give readers a better product. For a person whose writing is his “passion”, Trent turns out a constant stream of sloppy work. BUT, HE GETS PAID THE SAME IF THE WORK IS SLOPPY OR A GEM OF GRAMMATICALY CORRECT PROSE. Always look at the RESULTS of anything if you want the truth. Do not listen much to what people SAY, watch what they do.

  13. Wow– many of you are ruthless. Here is a novel concept: if you don’t like his writing don’t read his blog. I enjoy his writing. I enjoy his articles. The ones that don’t interest me (his dinner ideas) I don’t read. There is no rule that says that I have to read everything that he writes.

    Furthermore, I read my local paper and trust me if you want crappy writing and be grammar that is the stuff to read. Many times you have to reread something to try and figure out what it actually says. But just like this blog, I filter the information, taking what I need and leaving the rest. And yes the paper is still in business and still continues to put out crap each week. So I don’t see the issue with Trent making money from his blog. I see the issue of consumers complaining about the quality of the product while continuing to consume it.

    My only criticism would be that I agree that that Trent should be more responsive to the comments. That being said, if I was getting bashed the way he is I might consider ignoring all of you to.

    Bravo Trent, keep the articles coming. I enjoy that parts of your blog that I choose to read. As an informed consumer I know how to filter and apply only what works for me. Also know how to use your information as a catalyst for further research.

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