The most exciting cricket league is back again. With all the glitz & glamour, hard-hitting exhilaration, screaming spectators and new title sponsor, the league has already begun to amaze the nation. However, apart from thrilling experiences, this league gives you some great financial lessons.
Even after being poles apart from finance, this league is full of financial lessons. The basic principle of this league resembles the core reason for investment. Today we invest to gain more returns in less time. Similarly, the participating teams also aim to score higher in a lesser time. Smart!
Here are six financial lessons to learn from IPL:
Out of the 12 seasons of the league, only twice has the same franchise won it consecutively. It signifies that bygones are bygones. New match, new season, you need to start again altogether. Similarly, an intelligent investor never invests based only on the past performance of securities. They study the current trend of the market and then invest. It reduces the risk of low ROI (Return on Investment). A typical IPL example is when RCB bought Glenn Maxwell at a whopping ₹ 14.25 crore last year. Based on his past performances, everyone said he would flop again. However, he had his best year in the IPL with RCB. Hence it proves that you should never rely on past performances to invest.
In the first six overs or the powerplay overs, batters try to get as many runs as they can. These runs later help them in building a good score. Likewise, it’s largely viable to invest more during a bearish market or when the market is in downfall. Investing in these scenarios will help you build a stronger portfolio and will help maximise your returns.
The Indian Premier League, apart from being an exciting sporting event, is full of distractions, marketing money, glamour, advertisements, cheerleaders, the betting world, and whatnot. Still, the greats of the game never get diverted from their aim of winning the league. Similarly, there are many volatilities in the market, every day, the market fluctuates, but you must have the determination to achieve the goal you set in the beginning.
A single player could never win you all games of cricket, and similarly, this applies to your financial goal. Cricket is a team sport, and each player has unique characteristics, that when combined to form a team, make them unstoppable. Similarly, you will not achieve your financial goal by putting all your eggs in one basket. Therefore, to get optimum returns, diversify your investments.
You must be wondering why there is always a gap of 2-3 days between matches for each team, right? Well, it is always necessary to take a break from the game. Switch yourselves off to get ready for the next day. Likewise, in financial planning also, you should take a break, stop, and review all your current investments and your financial position before you make another move.
An expert or a coach is the leader of the team. They play an essential part in the success of a team and are responsible for highlighting and correcting flaws that they recognise in a player. Similarly, a financial professional will assist you with your financial planning, identifying any mistakes and providing solutions to address them.
The success that IPL has achieved is mainly because of the money and glamour involved, along with outstanding talent. However, there are many financial lessons that you can take out of it. Also, this league is a brilliant example of a big dream, an aim that many players set for themselves, and this league completes it. Similarly, set a financial goal for yourselves, be consistent, and you will be sure to achieve it.