4 Fundamentals of Financial Planning Success… and to Becoming a Better Pool Player

By: Joseph Goldy, CFP®

Ever since I was a teenager and first watched the movie The Hustler, I’ve been hooked on shooting pool. I loved watching the two main characters, Fast Eddie Felson, played by Paul Newman, and Minnesota Fats, played by Jackie Gleason, battle it out on the pool table.

Pool is a great game, often very chess-like, requiring the player to create a long-term strategy thinking several moves ahead to beat their opponent. Alas, despite my three decades of on-and-off play, if you watched me play last week in my pool league, you’d think I had just picked up a cue stick for the first time.

As in any sport, it’s always frustrating when you know you’re not playing at the skill level you’re capable of. After talking with some teammates recently about my slump, we agreed the best thing to do during times like this was to get back to the fundamentals.

When I began thinking of the fundamental skills needed to be a good pool player, I thought many of these could apply to being a good financial planner.

Strategy and Planning

Both pool and financial planning follow many of the same steps as the financial planning process. For example, both require setting goals, analyzing the current situation, weighing risks and trade-offs, and developing a plan to execute.

In pool, you’re forced to think long-term, like financial planning. Focusing on one shot at a time in pool would be the equivalent of making financial planning decisions based on how the market did on any given day. Thought and strategy must go into where you’ll leave your cue ball after you make the ball you’re shooting at; this is called playing “position.”

In financial planning, the equivalent of playing position may include what happens if you lose your job unexpectedly or preparing if inflation is higher than expected; essentially, thinking beyond today and having a strategy for the unknowns in life.

Patience and Discipline

In pool, as in any game, to be good, you need to have patience and discipline. Patience with yourself as you learn the basics and the discipline to be forgiving when you don’t shoot well.

Having the discipline to stick with a regular practice regimen is critical to long-term success in any sport. But just as vital is having the discipline to restrain your emotions in the competition after making a bad shot or getting “snookered” into an unfavorable position.

Likewise, in financial planning, patience and discipline are essential to someone’s long-term success. Following through on a financial plan requires the discipline to resist impulsive decisions, restrain emotions as people talk about “hot stocks,” stay focused on goals that may be many years away, and ride out market downturns – all these are easier said than done.

Risk Management

There is constant risk assessment and risk management throughout a game of pool. Assessing different shots, where on the table to leave your cue ball, and deciding which pocket you go for all carry risks for the player. Considering these risks and deciding which are worth taking separates the best players from everyone else.

Financial planning involves mitigating risks in many ways. When managing an investment portfolio, diversification is one of the best ways to help minimize risk over the long term. Perhaps to a lesser extent, but still significant, is proper investment selection. Some stocks, bonds, and funds are inherently riskier depending on their business or a fund manager’s style.

Insurance is one of the oldest ways of managing risk. At Highland, we help clients manage risk by completing an insurance analysis to see if they are over or under-insured. We also will conduct a full review of a client’s estate plan looking for risks to surviving spouses and family members with missing or outdated estate documents.

Decision-Making and Adaptability

Shooting pool and financial planning involve dynamic environments with many variables affecting your situation. Your success is based on how well you adapt to this constantly changing landscape. In pool, the near-infinite positions the balls may lie on the table force the player to adjust and make decisions on the fly. The player with a process to continually evaluate and adapt to their current situation will be rewarded.

In financial planning, the economy, markets, and someone’s personal situation are all variables that demand the ability to think critically, review options, and adapt your approach. A big part of how we help clients is to create the right mindset around being adaptable and having a process to make clear decisions. We do this by remaining unbiased and being more of a partner with clients to help them make the best decisions rather than simply dictating what we feel is right.

As it turns out, when faced with many options, having the ability to think strategically, calculate and manage risk, and make decisions in an ever-changing environment, all while remaining patient and disciplined, will not only help you achieve success with your financial plan but also may help next time you walk into a pool room.

Joseph Goldy, CFP®, is a wealth advisor and CERTIFIED FINANCIAL PLANNER™ at Highland Financial Advisors, LLC, a fee-only fiduciary wealth advisory firm based in Wayne, New Jersey.  

Joe specializes in working with newly independent women because of divorce or losing a spouse. He understands firsthand the value of having a clear financial picture pre- and post-divorce and a plan to restate goals as a single person. When he is not helping clients, Joe enjoys spending time with his two sons outdoors and volunteering to help raise money for Type 1 diabetes organizations.