Top 5 Mistakes Jiu-Jitsu Practitioners Make Financially

Dec 10, 2015BJJEEArticles

Is your financial game as on point as your jiu-jitsu game?

If you are like a lot of the folks that I talk to you are doing OK, but not necessarily going after your financial future with the same tenacity as you bring to the mat.

Through the Black Belt of Finance Blog I’ve had the chance to work with martial artists from all across the country both through questions and comments on my and also on an individual basis working with them as clients one on one.

What I’ve noticed from this group in particular is a lot of positive characteristics being brought over from martial arts, like the improvements to their personal life; from the way they carry themselves, to the way they eat, and so on.

With that, I’ve also seen several common mistakes that I see my friends and clients in the martial arts world making financially.
Here are the Top Five Mistakes Made by Martial Artists Saving Money…

1. Mistakes in Saving Money: Procrastination

Although I see a lot of discipline being crossed over from martial arts to the practitioners personal life, one of the strongest areas were I see improvements could be made financially is in cutting out procrastination.

As I mentioned in my training manual when it comes to saving money this is not a mistake made strictly by martial artists but our generation as a whole.

The baby boomers as a whole have not done a great job of saving up enough money for retirement, and as the generations get younger the habits of saving money are getting worse and worse.

Going beyond those who are simply not getting started or started early enough, are those that either made a commitment but fell short or began saving with a long-term goal in mind only to give up on that goal once they’ve built up a sizable savings.

Once you get started saving it’s very tempting to cash out that retirement account to buy a boat, or to buy a home, but these are some of the decisions that I’ve seen made by clients who later on in life are now faced with the reality that they simply do not have enough to retire, or pay for their kid’s education, or pay for healthcare.

Cutting out the procrastination, and cutting out the urge to spend is one of the key forms of discipline that you need to derive from our training in martial arts and apply in your financial life.

The ability to extinguish the burning hole in our pockets and retirement accounts and look towards the future toward long-term goals is often the key to financial success, and what I see that the wealthy do differently.

2. Mistakes Martial Artists Make: Holding on to Debt

One of the main headwinds holding back young hustlers from getting started with a savings strategy is their outstanding credit card debt.

It’s not always the case that you need to pay down this credit card debt or any outstanding debt for that matter. That decision really comes down to where you are at in your financial journey.

As young savers we generally have high interest rate on those credit cards and very little saved up in retirement accounts, so in this case anytime you are faced with an card/loan payment that payment and the interest-rate associated with it generally blows any return you were going to get from a small retirement account out of the water.

So in this case you would generally want to pay down those credit cards before you even think about putting money away.

For everything you need to know about paying off debt vs saving money, check out a recent article I did for MoneyTips.com where I responded to a reader from our jujitsu community:
Reader: “Should I Pay Credit Cards off Before Saving?”

3. Not Having Solid Short and Long-Term Saving Goals

Regardless of where you are at in your martial arts training, to get to where you want to be you are going to have to have some solid short and long-term goals in place to make those dreams a reality.

That goes for whether you want to be a world champion, learn self-defense, or simply lose weight. I can tell you from the up-and-down road to the black belt that not having goals in place is what puts a lot of practitioners back on the couch eating Doritos.

How you are going to go about attacking your short and long-term savings goals, and the way to make your financial goals a reality, is the same way you want conquer your goals in martial arts.

Start off by having a ridiculous long-term goal. One that even you would have a hard time truly believing, but from that long-term goal set out a three-year, one year, six month, one month, one week, and day to day set of goals that are going to facilitate your long-term outlook.

This strategy allows you to reach for the stars while at the same time keeping you on track and keeping you on point with where you want to be financially.

For more information on how you can tackle your short and long-term goals and get started saving from day one, visit my recent article the BJJ Bum’s Guide To Saving Your First $25,000.

4. Big Mistake Martial Artists Make Financially: Not Having Life Insurance

I would say next to procrastination this is the number one mistake that I see martial artists making financially. If you are…

-Married
-Have kids
-A stay-at-home parent
-Have older relatives you take care of

there is absolutely no reason why you shouldn’t have life-insurance. Simple term coverage is extremely affordable and can protect your family against (among other things) the income that you provide in the case of your sudden death.

Look, this is not news to anyone. I’m sure just about every family out there has a story or situation where they’ve heard of someone not carrying life insurance, or enough life insurance, and their family being absolutely screwed as a result.

As an independent insurance agent and a financial advisor, when I get a client started witha financial plan this is one of the first questions I ask them, because regardless of the amount of money you have saved up, all of it can disappear at a moments notice with one unforeseen event.

It’s not fun, it’s not sexy, but if you don’t have life-insurance get your ass out there and get some.

For everything you need to know about life insurance as a martial artist check out The Top 2 Life Insurance Strategies for Martial Arts Families.

5. Mistakes I See Made with Investments: Set it and Forget It

Now we are at the point where we can start discussing investment strategy. I work with several parents of aspiring martial artists in the community and one of the common mistakes being made is along the lines of not having a solid strategy in place that facilitates the short and long-term goals we mentioned earlier.

Many clients will come to me with a 401(k) or other retirement account and not only do they have no idea what’s going on inside that account but more often than not they received a few documents from their human resources department back in the day that asked them to select a few funds, and the result is a random portfolio that is often not at all conducive of the type of risk or reward they want from their investments.

Even for those who have a solid plan built out from their advisor, what I often see is that they’ve held onto the same strategy for a long time and as a result their portfolio has never been rebalanced.

Rebalancing your portfolio is very important because as assets shift in weight from stocks, to bonds, to alternatives, to commodities… the portfolio becomes overweighted in some areas and underweighted in others. This is the type of issue that jacks up your original plan and essentially changes your risk and return profile without you knowing it.

Buy and hold is an incredible strategy for a young investor in particular, but you still want to take into account how certain sectors, as well as the market as a whole, are valued at any given time. This way you can take up to date information into account when it’s time to sit down and rebalance your portfolio.

Whether it is not revisiting your strategy on an ongoing basis or simply not putting a strategy together in the first place, complacency is one of the most consistent mistakes I see being made in the retirement plans of the martial artists that I’ve worked with.

You may think your berimbolo is on point, but every once in a while it makes sense to revisit it through drilling or even getting a second opinion from an expert from time to time.

My gift to you:
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All you have to do is click the book… it’s FREE. No Cyber Monday required, the only catch is that I will likely discontinue the free version after the holidays so get your copy now. Enjoy 🙂

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If you have any questions about the article or even your financial situation just leave a comment below or contact me directly at Bland@irvinewealth.com