How the Rules of Blackjack Apply to Your Finances

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positive habits

As part of my job I’ve been playing a role in sales enablement, which involves supporting and equipping salespeople with tools to help them succeed. One of my favorite concepts that’s been taught is about the “rules of blackjack.”

In blackjack, there are a few “rules” that experienced players tend to follow including:

  • If you have a hard 17 or higher, Stand.
  • If you have a soft 17 or lower, Hit.
  • Split Aces and 8’s
  • Double down on 11

Do following these rules mean you’ll win every time? Not at all. So, what’s the point of following them? It’s all about increasing your odds of winning.

Statistically it’s been found that when adhering to these widely-accepted rules, your chances of winning a particular hand go up. The more you stick to the basic strategy, generally the more you’ll win.

I love this analogy because it’s applicable to so many areas in life. Too often we’re focused on trying to be “ready” or get ourselves to a state of “perfection” before we take action. This analogy hammers home the importance of repeated positive habits over time. The more consistent your positive habits are, the higher your odds of achieving positive results.

When it comes to personal finance, some of these “rules” look like:

  • Spend less than you earn
  • Pay off consumer debt as quickly as possible
  • Be aware of your monthly cash flow and overall net worth
  • Start investing at a young age
  • Invest in low cost index funds
  • Learn about money and manage it yourself
  • Automate as much as possible (bills, savings, investments)

Not everyone will follow these, and some of those people can still become successful. There will always be exceptions. There will sometimes be lucky stock picks that skyrocket and make a few people a fortune, but that’s not the norm. Most people aren’t going to become wealthy with that type of investment strategy.

The basics of personal finance aren’t complicated. A big factor in our success is in getting a handle on our own behavior. Simplicity is key.

For most people to become successful with their money, it goes back to the rules of blackjack. Focus on getting the basics established in your life. Repeated positive habits over a long enough period will increase your odds of success.

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1 Response

  1. True dat! I love the point about managing your money yourself. I know some people live and die by the rule of having a financial planner or counselor, but the vast majority of people don’t need these services.