Financial Insights That Matter
A tsunami of money has gushed into professional sports in recent years.
The valuations of several NFL teams have soared into the billions, according to a Forbes report, while the league approved new rules that would allow private equity firms to buy stakes in teams for the first time. Even college athletes can now tap into their fame to create wealth.
But for NFL legend Tom Brady, the focus on money has gone too far. Last month, the seven-time Super Bowl champ took the stage at Fortune’s Global Forum to talk about how some younger players, and their parents, have lost perspective.
“Is money the only thing we value?” he mused. “I always felt like I took less money so that we could win.”
Brady also claims the influx of money into the world of sports may have pushed some to ditch sportsmanship and pursue the path of least resistance. “In today’s world, if we think about how we’re screwing these kids up, anytime they face a little difficulty, what do we do? We send them to an easier place to succeed,” he said.
Instead, the father of three recommends embracing failure and taking bold risks to develop a robust career. His philosophy offers three key lessons for anyone trying to build wealth and achieve success.
In the New York Times bestseller Grit: The Power of Passion & Perseverance, psychologist Angela Duckworth wrote that the hallmark of a successful person is their ability to deal with setbacks and treat them as learning opportunities.
Adversity and failure is often unavoidable, even for the most talented athletes, entrepreneurs, and investors. What counts is their ability to get back up and stay motivated to succeed.
This lesson is particularly useful for investors, because the market can be so volatile.
According to research by Blackrock, the S&P 500 has seen a correction of 10% or more in 20 of the last 35 years. The average drawdown during that period was 14%.
Giving up during any of these drawdowns would have prevented an investor from enjoying the full benefits of the market’s long-term rally over that period.
Just like Brady, it pays to stay in the game for as long as possible.
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