Are You Playing to Win or Playing Not to Lose?

The Game is On

The other day I was playing chess with my eight-year-old son on one those giant boards with toddler-sized pieces. As fortune would have it, the board happens to be at one of the best German restaurants in town. They have delicious German beer on tap in ein großen maß auf Bier (a man-sized beer.) So this turns into a regular hangout for Mr. Refined and the double trouble team of Jr. Refined’s.

My son set up the board while my daughter chased a few butterflies around. I ordered a favorite summertime beer, a Paulaner Hefeweizen. The game was on! Early in that chess game, I noticed that my son and I were playing with very different strategies. He was moving his knights into place to decimate the left-hand swath of my pieces.

Rather than protect the pieces that he was systematically eliminating, I moved a distant piece back on the opposite side of the board. With his next move, he captured one of my rooks. Mounting no defense, I move a pawn forward in the middle of the board. With excited laughter, he took out my bishop this time. He intoxicated on the progress of taking out my pieces one after the other. In fact, he was so happy to be setting up kill after kill that he was unaware there was another strategy at play on the board. Unabated, he eliminated another of my pieces.

Checkmate!

Now it was my move. About seven moves into the game, with my pieces finally out of the way, I was able to advance my bishop out of the home row for its first move. I drug it halfway across the board, slammed it down on the square of choice and exclaimed, Checkmate! 

My son looked back at his king in disbelief that the game was already lost. He was devastated! He had made rapid progress dispatched several of my valuable pieces and a couple of pawns early in the game. It looked like he was dominating the game. He had a strong piece advantage on the board. I watch as his expression fell from crushing the game to the realization he was crushed by the game. Despite all his early advances, the game was over and he had lost.

A Loser’s Game

This game represents the same game at play every day with your finances. Your archnemesis is your friendly neighbor. The pieces on the board are your house, car, vacation frequency and locations, boat, gym memberships, golf club memberships, etc. The moves you make are your choices to outspend the Jones’.

Mr. Jones vacations for a week in Key West. You vacation for 9 days in Cabo. Mr. Jones get a 2019 Lexus. You counter with a 2020 BMW. This is a loser’s game. This is trading financial wound for financial wound. This face slapping competition will go on and on until all feeling has left your hand, the wallets are left empty, and the credit cards are leverage to the hilt. The only winner in the game is…. The person that doesn’t play.

By having the new V9.5, 10Liter super-ultra-mega duty truck to pull your new Wake-a-dew boat. You are falling for the loser’s lead. The lead straight into the realm of hopeless debt and marginal satisfaction from you vast array of high maintenance rapidly depreciating possessions.

The Awakening

Usually, a financial awakening happens within an individual at some stage of this game when one opponent realizing that they are buying stuff they don’t need with money they don’t have to impress people they don’t even like. Sometimes this follows the introduction of a young child into the family before one fully realize there is something far more valuable than a collection of envy–inspiring toys that clutter garages and driveways across America.

For many people, this realization does not occur until later into their wiser years. Sometimes after decades of moves that back themselves into a financial corner. For some, it takes the realization of driving their third new car off the new dealer lot in an endless upgrade cycle knowing the inevitable pain of the payment will stretch them thinner than the payments of each previous car. In the recesses of their consciousness, they are haunted with the knowledge that they have never saved more than the minimum match in their 401k. Knowing that their retirement horizon is no closer today than it was a decade ago.

Are You Playing to Win or Playing Not to Lose?

So many people accumulate a collection of conquered pieces to look like they are winning on the outside. Yet one look into their account balances and credit card statements and you would find a stark truth. Instead of this loser’s game, what if we planned a series of strategic moves to get ourselves in position for the financial checkmate? Rather than protecting the pieces we already have or accumulating more than Mr. Jones, what if we were willing to let go of them in order to set up the checkmate? In other words, what if we stopped running the rat race? What if we stepped out of the “outdo-the-Jones'” competition, off of the hamsterwheel and off of the path of mediocrity?

Strategically, what I mean is let Mr. Jones out vacation you, let him out boat you, and let him hold the champion belt for the newest car in the neighborhood. Let Mr. Jones out spend you in every category except one, savings rate. Live in a home below your means. Drive the oldest car in the neighborhood and grocery shop at Aldi, Cost co. or Lyle instead of Whole Foods for a season. With these few differences, you can save half of your income in tax-sheltered accounts all the while letting the miracles of compound interest waved it’s magic wand to multiply your money. Then, after 17 years (at that savings rate) your nest egg will be so big that you never have to work again.

A New Paradigm of Wealth: Wealth of Time

Imagine walking out of your house on a sunny Monday morning, down your driveway wearing your sunglasses and swimsuit to your Wake-a-dew boat. You throw your wakeboard in the boat. As you look out over you meticulously manicured lawn, perfected in yesterday’s wealth of time. Something catches your eye across the street. A reflection of sunlight off Mr. Jones corporate badge dangling from the belt loop of his business dress pants. A bright beam of the suns golden rays flashed across your line of sight. He stands there in begrudging envy knowing that he has to report to the corporate hamster wheel. Stressed with the anxiety that deadline after past due deadline will be pilled on him do to seemingly endless and overly aggressive commitments to appease the shareholders corporate earnings demands.

Standing there in the warming sunlight it dawns on you that you are one of those shareholders. His persistence to diligently report the to the corporate hamster wheel day after day is earning you enough money to fund your perpetual money-making machine. Warmed by the thought that your strategy played out to perfection and that his efforts on the path of mediocrity are paying for your day of wakeboarding, you thankfully wave and sound out a cheerful “Good morning Mr. Jones!”   

Checkmate!

Personal Finance is like a game of chess. You could win in a few moves or it might take you thousands of moves up and down the board before you get that checkmate. The key is to realize that your everyday decisions are all moves in the game of life. You might need to lose most of your army of pieces to win the game. Temporary sacrifice leads to long term success. You might make hundreds of unproductive moves or worse harmful moves. In the end, it comes down to one question. How long do you want to take to get there? Do you want to make lots of fancy moves around the board or do you want to stay focused on the checkmate?

Your Move

Would you be willing to let the Jones’ look like they are winning while you stash way your cash only to come from behind and deliver the checkmate of a lifetime and retired decades ahead of Mr. Jones thanks to your perpetual money-making machine? If you want to look rich, you will be poor. If you are willing to look poor, you will grow rich. The choice is yours. It is your move.

Keep the FIRE burning my friends.