By now I’m sure you’ve seen what has been hailed as the greatest photograph of all time. Yes, the one with Cristiano Ronaldo and Lionel Messi playing a game of chess on a checkered Louis Vuitton suitcase. While I’m not much of a football fan, I sure am a chess fan. And I couldn’t help but think about all the little and big things that the game of chess teaches us about personal finance. Can we checkmate our financial woes by imbibing some moves and rules from the game?
Every Grandmaster was once a Beginner
With 32 pieces, 64 squares and more than a million possible moves, chess might seem like a game of flair. But every grandmaster was once a beginner. It is said that the sooner one picks up the pieces, the better one learns. Once done, it is just a matter of study and practice. The swiftness in the moves will come along with continuous learning and polishing the basics.
Taking a step towards managing your finances can often feel overwhelming. But it all starts with the basics – educating yourself, budgeting, tracking your expenses, saving and investing. Practising these moves regularly will make money matters seem less daunting. Read up and stay abreast with financial news from around the world. This will aid your growth and put you on the road to mastering your finances.
Value the Pawns
More often than not, a game of chess opens with a pawn move. The pawn is the smallest piece. It moves directly forward, never backward, never to the side. This makes it seem like the least powerful piece of all. However, as the game progresses, the pawn has the power to be promoted to a queen, the strongest piece in the game!
As the famous eighteenth century chess player, Philidor, profoundly said, “Pawns are the soul of the game.” When it comes to money management, it is the tiny habits that are the soul of your financial journey.
When you begin earning, dip your toes into investing. Start small. The consistency of setting aside a doable amount each month will eventually lead to incremental gains. With the magic of compounding, your corpus will grow exponentially, beyond your wildest imagination.
Be Flexible with Your Strategies
Chess requires strategy, but it is also unpredictable. Surprise moves can result in painful defeats. Being rigid with your strategies will not help you in desperate situations.
Fred Reinfeld, author of How to Play Chess Like a Champion, says, “Some players have been known to get so upset by a powerful-looking move, that they resigned on the spot, without realizing they had a hidden resource that would have turned the tables. Chess isn’t all cold calculation. It takes guts not to be overwhelmed by apparent disaster, to fight back when all appearances are against you. But true satisfaction comes in chess from overcoming just such difficulties.”
Market crashes, job losses, and global financial crises can throw you off guard. But don’t let these circumstances rattle you. Trying to attain a certain objective with your money with a spelt out strategy is good, but adapting to adjustments with time is better. Investing aggressively a particular way or in a single investment avenue is a sign of rigidity. Keep your portfolio sensibly diversified.
Review Regularly
In a game of chess, be it local tournaments or world championships, players record their moves on a scoresheet. While this is a mandatory drill, it is also a powerful tool for analyzing one’s performance. Replaying the game, points out the areas of weaknesses and helps in tracking one’s gaming style.
Our very own grandmaster, Vishwanathan Anand, says, “You can relate chess to finance.” In an interview with Mint, he explains that “the ability to look at past financial transactions and apply them differently is something conceptually very similar to looking at a previous game of chess and understanding what was done well or badly and applying the same opening in a different way.”
A regular review of your finances, be it your budget or your investment portfolio, will help shield you from unanticipated losses, stay relevant with your goals, and keep up with ever-evolving market conditions.
Mindset Is Everything
“Victory is a state of mind”, said the caption to the Ronaldo and Messi photo. That’s true of any sport as well as with our finances. A positive mindset coupled with a few winning strategies make the perfect combination for both money matters and chess.
As Beth Harmon, the protagonist from one of my favourite Netflix shows, The Queen’s Gambit, says,
“Chess is not always competitive. Chess can also be beautiful. It’s an entire world of 64 squares. I feel safe in it.”
Rather than being burdensome, managing your finances is also something that you can feel safe and sure about. Valuing the little habits, taking calculated risks, being flexible in uncertain times, and not being too hard on ourselves when things don’t go our way can work wonders. If you only believe.
