Here are the Steps to Success in Chess and Investing

Here are the Steps to Success in Chess and Investing

When you play chess, you need to take small steps to success rather than making grandiose moves or waiting for your opponent’s blatant blunders. A good chess player builds his defensive and offensive fortress slowly, accumulating small advantages wherever possible. The same idea applies to finance. Since it’s unlikely that you will win enough money in the lottery to support you forever, you’ll need to accrue money in reasonable, steady amounts. Over time, a collection of seemingly trivial sums adds up. The book Rich As A King: How the Wisdom of Chess Can Make You a Grandmaster of Investing suggests the following small steps to help you build your nest egg. (To watch a 3-minute video about this, click here.): Regular savings. Squirrel away $5 per day, and put it into a stock mutual fund monthly or quarterly over twenty years. If you net 6% per year on that pool of money, you’ll end up with over $67,000. (If you can save even more, great!) Lower fees and expenses. Look for ways to reduce small, recurring cash outlays. You could transfer your banking relationship to a lower-priced firm (saving $400 per year), pay off your credit card every month (or better yet, switch to a debit card) and save $2,000 per year in interest payments, and renegotiate your cable and cell phone bills (save $30 per month). Examine your budget to find other possible savings routes. Implementing these alone would allow you to sock away $3,800 every year. Get a better salary or find a second income. Could you find a job with a better salary, or perhaps work... Click for more
How to Win in Chess… and in Personal Finance

How to Win in Chess… and in Personal Finance

What makes a player win in chess? Is there a special, secret formula that always guarantees victory? As chess is a multifaceted game, there’s no one uniform tactic or strategy that works for every single player all the time. Every player has his or her own unique style of play. What works for one player may not work as well for another. However, despite their differences, people who win in chess have one thing in common. What is it? The secret ingredient to make you win Grandmaster Aaron Nimzowitsch said, “Many men, many styles. What is chess style, but the intangible expression of the will to win?” In other words, it’s not enough to memorize dozens of possible chess moves. You need to have the will and determination to win the game. Chances are that in any single game you lose several valuable pieces along the way, and you’ll have to change strategies mid-game. But if you‘re determined and believe you can win, you won’t give up, and will play the game to its end. The will to win also helps you succeed in finance The financial world is similar to the chessboard. While it’s obviously harder to get on your feet after sustaining a financial loss than it is to restart a failed game of chess, you still need the will to win to become a successful investor. The market may have its ups and downs, but don’t give up. If you are determined to “win,” (read: prepare for a financially successful life) you need to keep reassessing your investing strategies and tactics as you go along. As... Click for more
Why Learning to Play Chess Can Make You a Better Investor

Why Learning to Play Chess Can Make You a Better Investor

Today, more and more schools around the world are teaching children how to play chess. But you don’t have to confine your child’s chess lessons to the classroom. If you want your child to learn to play chess, sign up for a free copy of a Chess Teaching Guide for Teachers and Parents by Grandmaster Susan Polgar. What are the benefits of playing chess? Playing chess can help you improve your analytical thinking skills, confidence, and overall health. Murray Thompson, of Flinders University in Australia, carried out a study on whether playing chess improves scholastic achievements, measured by an increase in IQ levels. He concluded that IQ increased as a result of playing chess due to the concentration and logical thinking that players use when planning and making their moves. Several studies conducted among schoolchildren found that children who learn chess in school develop strong verbal, intellectual, and numerical abilities. For this reason, countries such as Armenia, Norway, and Spain teach chess as a compulsory school subject. Chess in the Schools teaches inner city public school students how to play chess as a means to improve their academic performance and aspire to better lives.  (To watch a video of an interview with the chair emeritus of Chess in the Schools, Lewis Cullman, click here.) Another study, published in The New England Journal of Medicine, found that when people 75+ played chess and other intellectually stimulating games, they were less likely to develop dementia than their non-game-playing peers. Chess can also teach financial skills Apart from all of the intellectual benefits that chess provides, you can also apply chess logic... Click for more
What Happens If You Make a Mistake on Your Tax Return?

What Happens If You Make a Mistake on Your Tax Return?

What happens if you make a mistake when filing your tax return? Regardless of whether it was an innocent error or a purposeful act of omission, your signature on a completed form attests to its accuracy. While sometimes the tax code has broad interpretations, filings need to be accurate. (Disclosure: I am a Certified Financial Planner and not a tax advisor. See a qualified accountant/tax lawyer for your tax questions.) What should you do if the IRS finds a mistake? The penalties for owing tax to the IRS can be quite severe, ranging from fines to jail time, depending on the problem. If the IRS catches you in a deliberate lie, you are in a very sticky situation. What should you do if you’ve made a mistake on your tax return? Go for the stalemate with the IRS This scenario can be compared to being backed into a corner during a game of chess. Your king is threatened all around and you know that it is impossible to win. What do you do? The answer is to go for a stalemate, as a stalemate is always better than a loss. Rather than hiding a problem or ignoring it, deal with it as best you can. You may still have to pay tax or interest, but this is better going to jail. A stalemate is not always a negative thing. You may not win the game of chess – or chase away the IRS, but at least you didn’t lose. Watch Grandmaster Susan Polgar demonstrate how to use a stalemate in a game of chess in this two-minute video. Page... Click for more
Does a Budget Tracker Really Help Your Bottom Line?

Does a Budget Tracker Really Help Your Bottom Line?

The way you play chess can shed light on how you manage your money. If you are a careful chess player and keep track of your moves, you might find a budgeting tracker a useful tool. In chess, you have a set number of pieces. In order to win, you need to use each piece in the most efficient way that you can. Rather than randomly moving around the board, you need to plan your moves based on the pieces you have available and where they are in relation to your opponent’s pieces. Similarly, when it comes to your monthly budget, you need to look at each dollar you have and use it most efficiently. If you don’t use what you have wisely, you may be left short before you get your next paycheck. If you don’t follow a budget, you won’t know where your money goes. This is why a budget tracker is extremely helpful. It allows you to become organized and methodical with your spending. The best budget trackers help you monitor your expenses, categorize them, and break them down so that you can plan better where to spend your money. Don’t let budgeting intimidate you Sometimes people feel overwhelmed when they first start tracking their expenses. Watching the list of categories where you spend money grow as you go through the month can be quite intimidating. Don’t let this scare you. Once you know exactly where your money is going, you will have a better idea of what you could cut. Budgeting is one of the most efficient ways to make the best use of your... Click for more