Financial Insights & Things to Think About

FORE! 5 Ways Golf Can Help You Hone Your Financial Game

Posted by Nicole Gopoian Wirick | Jul 11, 2023 | 0 Comments

Financial planning and golf might not seem to have much in common. But one planner shows how she used lessons from her golf game and her practice to hone both games.

By Nicole Gopoian Wirick, JD, CFP®

I originally learned to golf at my parent's suggestion as a teenager but gave it up when I went to college. Plainly stated, I was interested in other things for the past two plus decades. But I recently became reacquainted with the game and have developed a new fondness for it. While it's quite likely that I'll never be great, the game reminds me a great deal of financial planning and investment management.

Golf is a life-long pursuit based on a disciplined approach to practice management. So is investing. In fact, I've started using golf as an analogy for how to construct portfolios and build financial plans – let's examine the similarities:

  1. Investment Time Horizons are Like Fairways

When you arrive at a tee box your first step is likely to assess the distance to the pin and determine the most direct path to get there. In the game of golf, the player's goal is to get the ball to the pin in as few strokes as possible. As it relates to your financial planning, the pin represents your financial goals – some are long term and others are shorter term.

The fairway is the path to the pin and represents your investment time horizon – how long you have to achieve your goals.

If you are young person in the accumulation phase of your life, the hole you are looking at is likely a long 500-yard par five. You have many decades to achieve your goal of financial independence in retirement.

But just like the game of golf, not all goals are long term and not all greens are far away from the tee box. Let's say you're looking at a short par three, with the tee box only 150 yards from the pin. Perhaps this hole represents a short to mid-term goal like purchasing a new home or vacation home or providing for your children's education.

Identifying your investment time horizon based on your goals – or your distance from the pin – is the first step in building a portfolio.

  1. Golf Clubs are Like Asset Classes

Once you assess the distance to the pin, you need to determine the best club to use for your particular situation. You would select a very different club on a par three than you would a par five because your goals and path to achieve them look quite different.

The club you select depends on how far you are from the pin and the terrain of the path to get there. If you are far away from the pin, you use your most powerful club that allows you to hit the ball as far as possible. As you approach the pin, distance becomes less important and you focus on precision instead.

Your driver is like the aggressive allocation of your portfolio. This is the part of the portfolio where you take (calculated) risks because you have the greatest opportunity for return over the long term. You wouldn't tee off with a putter on a 500-yard hole; instead, you would use a driver because you have a greater possibility of hitting the ball the farthest down the fairway. Yes, you risk hitting to the right or left, but it is worth the risk to get the ball far down the fairway. If you miss the fairway you make a small adjustment to course correct and continue the journey.

Perhaps on a 150-yard par three you select a 3 or 5 wood, or even a 6 or 7 iron depending on how far you hit the ball. These clubs provide greater control for a closer target, but they don't generally go as far as a driver. They are like a moderate portfolio, with some distance and some precision.

As you get closer to the pin, you might use a pitching wedge and then a putter to get the ball as close to the pin as possible. Inches matter and you need a club that can account for inches instead of yards.

The same is true of asset allocation. You are generally able to take more risk when your investment time horizon is long, whereas when you get closer to your goals your tolerance for risk will likely decreases. The golf clubs represent the allocation to stock/bonds and cash in your portfolio. They are the tools you use to accomplish your financial goals.

  1. Water, Sand and Trees are Like Job Loss, Disability and Divorce

Life is messy and rarely goes according to plan. Neither does golf.

The golf course is full of potential hazards: trees, tall grass, sand traps and water. Hitting a ball into one of these hazards can derail an otherwise beautifully played hole.

The same is true in life. Assessing risks and developing a mitigation strategy is a critical component of a financial plan. Job loss, disability, divorce and premature death are all risks on the journey to financial independence. Good planning identifies these potential risks and develops a strategy to plan for the unexpected.

We carry a rescue club in our golf bag to help us when we get into trouble. As it relates to financial planning we consider an emergency fund, estate planning documents, and various types of insurance (life, disability, long term care, property and casualty) as tools used to mitigate the risk of a potential disaster.

  1. Course Management is Like Financial Planning

Golf involves making calculated risks and recalibrating as the situation changes.

Sometimes when faced with a hazard on the golf course, we are forced to move backwards, sideways or inch forward less than we would like. Good course management involves an assessment of the terrain and a determination of whether we should aim right or left, short or long of our target to avoid a potential mishap.

Planning involves the same recalibration over time. Successful financial plans are updated on a regular basis, as new risks are identified and mitigated, and goals change based on new circumstances.

  1. Golf Coaches are Like Financial Planners

Even the best golfers in the world aren't afraid to ask for help. In fact, they all have coaches who help them through issues and maximize their potential.

Similarly, I believe that the best investors have a financial planner. An independent third party to guide them on their journey, identifying gaps and rendering solutions.

So let's get out there and shave off some strokes – and don't forget to enjoy the ride!

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About the author: Nicole Gopoian Wirick, JD, CFP®

Nicole Gopoian Wirick, JD, CFP® founded Prosperity Wealth Strategies to help clients define and achieve prosperity. Nicole holds the CERTIFIED FINANCIAL PLANNER™ certification and serves as an exam mentor and member of Scholarship Review Panel. She is a former board member of the Financial Planning Association (FPA) of Michigan. Recognizing an absence of women-focused networking and programming, she revived the Women & Finance Knowledge Circle as a subgroup within the FPA of Michigan. Nicole believes in giving back to her local community and has served on the board of directors for Variety, the Children's Charity Detroit chapter and has co-chaired the Alzheimer's Association Spring Soiree.

Prosperity Wealth Strategies is a State registered investment adviser. Information presented is for educational purposes only intended for a broad audience. The information does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and are not guaranteed. Prosperity Wealth Strategies has reasonable belief that this marketing does not include any false or material misleading statements or omissions of facts regarding services, investment, or client experience. Prosperity Wealth Strategies has reasonable belief that the content as a whole will not cause an untrue or misleading implication regarding the adviser's services, investments, or client experiences. Please email [email protected] to receive the adviser's ADV Part 2A for material risks disclosures.

About the Author

Nicole Gopoian Wirick

Hello! Financial planning with a personal touch. One of Nicole's greatest joys is developing a relationship with her clients, who have become a meaningful part of her life. Nicole Gopoian Wirick, JD, CFP® founded Prosperity Wealth Strategies to help clients define and achieve prosperity. Nicol...


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