Monday, October 3, 2011

The Indianapolis Colts and Your Finances

Tonight, the Colts and the Tampa Bay Buccaneers will face each other on Monday Night Football.  If you would have asked even the most casual of American football fans a month ago who would almost certainly win this game, you would have received the answer that the Colts will win in a blowout.  However, as of today, gamblers in Las Vegas are stating that Tampa Bay will win the game by 10 points.

What has changed in the last month?  It turns out that he-of-the-big-forehead, Peyton Manning, the Colts' quarterback, had neck surgery about a month ago because he was having trouble, you know, turning his neck to look at stuff (note: for those of you who aren't fans of the sport, it is super important to see stuff in football).  While there was originally talk of Manning coming back this season, it now seems unlikely that that will be the case as the Colts have lost every game so far, and it makes more sense for the Colts to let their star QB recuperate instead of rushing him back into action and risking further damage.  As such, the Colts have already (after 3 weeks of a 16 week season) basically thrown in the towel on the team's chances this year.

"Huh, I guess I do have a big forehead."
- Peyton Manning
As an NFL fan, the Colts' plight is interesting to me for a variety of reasons, but the more I thought about the story, the more I realized that there were some personal finance lessons that can be gleaned.  Here goes.

1)  The Importance of Diversification - Prior to this season, many people thought the Colts had a fairly well-rounded team.  However, as soon as they lost their starting quarterback, the wheels fell right off of the Colts Express.  While any team losing a quarterback is going to very negatively affect that team's win/loss record,* the Colts are looking absolutely horrible, and so it seems like the team had too many eggs in the Peyton Manning basket, and not enough eggs in the other gifted players basket.  The Colts didn't diversify their resources as well as they should have. 

Similarly, as we buy and invest in financial products, we can easily lose our shirts if we're too invested in one company, and that company goes belly-up.  Diversification is as important in our portfolios as it is on a football field.

2)  The Importance of an Emergency Fund - Any personal finance blog worth its salt has made an impassioned post about the importance of an emergency fund.**  While the definition of what constitutes an emergency is a little vague, the basic idea behind an emergency fund is that sometimes inexplicable things happen in life, and if you have money to see you through them, you'll be a lot better off.

When Manning announced that he was having neck surgery, the Colts didn't really have an emergency fund (read: quality back-up quarterback).  Believing that they needed somebody with NFL experience, the team rushed out and signed Kerry Collins, a veteran, journeyman QB who is approximately 39,486 years old.  Collins probably suffered a concussion in last week's game***, and now the Colts are having to rely on an inexperienced QB in the form of Curtis Painter.  The Colts were unprepared for an emergency, and now they are paying the consequences.

3)  The Importance of Planning Ahead - I realize this may be something of a rehash of the above, but there's a little bit of a different spin on this one.  I mentioned above that the Colts had claimed that Manning would be back this season, but that they have since stated that Manning won't come back until next year.  There's no sense, they apparently reason, in rushing an amazing player back on the field if the team has a losing record and no playoff hopes.  Even though the Colts didn't plan ahead well-enough to salvage their season this year, they are hoping that their golden boy investment will pay dividends in coming years, even if it comes at the expense of this season.

What's the personal finance lesson here?  Saving and investing money now can feel like a burden, as if we're depriving ourselves of the cash that we've worked so hard to earn.  However, all of us acquiesce to the idea that compounding interest will enable us to retire someday.  Just like the Colts are putting off immediate returns by getting Peyton back on the field, we are putting off immediate gratification by putting money in our retirement accounts in the hopes that we won't have to work until the day we drop dead.

What do you think?  Am I off base here?  Are you offended by my likening of human beings to financial resources, and, by extension, think it's hilarious that I am therefore comparing rich football players to slaves?  Let me know in the comments.

*Unless you're Matt Cassel from the Patriots a few years back, who, after Tom Brady was injured in the first game of the season, went on to win 11 games and still not make the playoffs.
**It is worth noting that I, to this point, have no such post.  Draw from that what you will.
***I say probably because the team has not officially called it a concussion.  You see how teams are more concerned about player welfare nowadays?

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This post was featured in the Carnival of Personal Finance, #330.


cashflowmantra said...

I think this is an interesting comparison. I do think that the Colts have placed too much stock in Peyton. The defense didn't need to be all that good when you can score points. They should have developed more of a running game as well.

Echo said...

Hilarious post! I think it's absurd that Painter is not even close to being serviceable. As much as I despise Brett Favre, at least most of his back-ups went on to have good careers (Brunell, Detmer, Hasselbeck, and Rodgers).

Manning must never even talk to his back-up, let alone teach him anything. They've all been horrible, and that's why they're in this mess.

PKamp3 said...

I think the Colts have a backup plan - lose a bunch of games, draft Andrew Luck, and be set for when Peyton moves to coaching. OT: Think Peyton will be a good coach?

Also, don't forget that Brady took over from Drew Bledsoe when he suffered a punctured lung. He had a decent rest of season, haha.

Bryan said...

Cashflowmantra: I totally agree. Addai just doesn't get it done as an RB, and hasn't for a couple of years.

Echo: Painter is growing on me (I actually started him this last week on my fantasy team as my main QB was on a bye), but he can't finish games either. If you're up by double-digits in the first half to the CHIEFS(!) and can't win the game, something isn't right.

PKamp3: One has to think that getting lucky with Luck is part of this season's poor showing. You hate to see a team phone it in, but that's kind of how it looks.

Squirrelers said...

Good analogy, with the Colts! Most eggs in one basket, look where that's taken them.

I wonder how that team will be supported in Indianapolis once Manning is gone. It's not a football city. I think we've seen the peak of that franchise, and a big part of that is just relying on Manning and not effectively building a solid organization. This year shows that.