IIf you’re like Michael and follow the American football season, you might know a popular saying: move the chains.
Moving the chains means moving the ball forward. Essentially, you have three plays to gain ten yards. There are two posts on the sideline linked by a chain; ten yards in length. After three plays it all resets.
Let’s say you have the ball on your own fifteen-yard line. One of the markers is positioned on the sideline of this line, level with where you have the ball. The chain then stretches out ten yards to the 25-yard line where the second marker is. And you have three plays to get to the 25-yard line.
If you manage to get to the 26-yard line in three plays or less, the chain is moved. The first marker that was originally on the 15-yard line comes up to the 26-yard line. And the second marker now moves to the 36-yard line and your three plays are reset.
Let’s say you hit a big passing play and pass from the 26-yard line to the 58-yard line. The chain will come up to the 58-yard line (first marker) and the second marker will move to the 68-yard line.
This is how the game of American football works. Have we confused anyone yet? Basically, the idea is to get somewhere step by step, play by play.
Like American football, accumulating wealth for your retirement is a little like the concept of moving the chains. Making plays is the equivalent of making your regular fortnightly contributions of $1,000. Sometimes you might hit a big pass play of 30 or more yards, moving the chains a long way. This would be like being in a position to invest an extra $300,000 at -30% in the markets, or being promoted into the general manager position at one and a half times your usual salary.
But you need to keep the chains moving.
What’s an example of this? Let’s say you’re contributing $1,000 to your super each fortnight, but have left yourself short due to unforeseen expenses. You may need to cut down to $200 for five fortnights. But never zero. Keeping the chains moving means investing and adding to your wealth, even if it’s a smaller amount than usual.
Whatever you contribute, you want to keep these chains moving. Football teams and successful investors win by keeping the chains moving, whether by ‘tickle’ or ‘flood’.
And don’t go throwing an interception – or, in financial terms, panicking during market volatility, which results in moving to cash at the wrong time. You can't control the market just like you can't control a referee. You should only focus on the things you can control – like investing regularly.
People often think they need to make big plays when it comes to their retirement. But you can only make a big play when you have the ball. Likewise, you can only make a big play financially if you have a big amount of cash. And what if you never get the ball? Making a play doesn’t need to be big. It just needs to be consistent.
Keep playing. Keep investing. And keep those chains moving!
