5 personal-finance lessons from NASCAR

This post comes from partner blog Blueprint for Financial Prosperity.

Having grown up on Long Island, I didn't have many opportunities to watch NASCAR on television, so I never truly understood the intricacies of the sport. Since college, I've come to appreciate the difficulty of NASCAR and the skill it requires. 

Last weekend I was watching a few laps of the Goody's Cool Orange 500 at Martinsville Speedway, and I finally understood why NASCAR fans love the sport.

By the way, for all the junk people say about NASCAR not being a sport, I dare you to tell a trucker to get a real job. Driving 500 laps requires an unreal amount of time. Can you imagine the concentration and endurance it takes to go 500 laps at nearly 200 mph, constantly maintaining vigilance, and your life constantly at stake? If you accept golf as a sport, NASCAR certainly is a sport.

That being said, you can learn a lot about personal finance, and life in general, by watching NASCAR, because the race (and hence the season) is like a marathon. The story told in the first 100 laps can be, and usually is, totally different from the final 100 laps. The reason people watch is because the story is so compelling.

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Here are five lessons you can learn about personal finance from NASCAR:

A lot can happen. You can be in the last starting position, but you get a shot at taking home first place every single time you fire up the engine. One of the great things about America is that your starting lot in life by no means completely dictates where you will go. That's the appeal of America. There is no caste system, no House of Lords. It's based primarily on merit and what you're able to bring to the table.

Starting last does make it difficult to finish first, but it's not impossible. How many people start off in poverty but through their own ability bring prosperity to themselves and their families? Just because you're $30,000 in debt right now doesn't mean you can't pull yourself out of the hole and retire comfortably if you're willing to make some sacrifices.

The reverse is also true. You could start off first, but one little error could cost you the entire race. One bad bump into the wall and your day could be over. Finances are no different. You could be born into the wealthiest family and one mistake (like not filing taxes) could wipe you out.

Take a few smart gambles. Very few personal-finance writers will talk about taking some gambles because slow and steady can often win the race. If you contribute to your 401(k) and get that company match, you have a great chance of having a tidy sum when you retire. However, to truly take advantage of the opportunities available in America, you have to be willing to take a few chances on things you believe in.

I don't mean you need to put your life savings on a spin of the roulette wheel. That's just stupid. But try to test your boundaries little by little to see what happens. If all of your money is in nice safe Treasury bonds and CDs, consider moving into the stock market. If you have a few index funds, consider shifting some money into international indices or equity stakes. Don't go to Vegas, and don't invest your life savings in your cousin's crazy idea. That's for entertainment. (I mean no disrespect to Vegas or your cousin.)

Little things matter. In NASCAR, a little front-side damage to your fiberglass fender will cost significant fuel efficiency because of drag. A small problem in the quality of a tire, and it can cost you the race. In NASCAR, everyone pretty much has the same type of vehicle (especially with the Car of Tomorrow), so it's the little things, and driving skill, that separate the winners from the losers.

In personal finances, we talk ad nauseam about little things like latte factors and snowflaking. As small as these things may be individually, they can have a tremendous impact on your finances. Most of us pretty much work, save for retirement, pay for expenses, get married, have kids, repeat. It's the little things along the way that separate the prosperous and the indebted.

Patience, patience, patience. Five hundred laps -- that's a long time, even longer if you're the one sitting behind the wheel jockeying for position at nearly 200 mph. NASCAR drivers have to be very patient because they know that the race is long, there will be plenty of stories between 0 and 500, and they have to bide their time. Sometimes opportunities present themselves, sometimes you have to go out there and make them, but either way you have to have the patience to wait for the right conditions to make your move.

In personal finance, you have to be patient to wait for your opportunities. The most obvious example is with the stock market. It's far more prudent to wait for the right opportunity than it is to force action. Many stock investors track hundreds of stocks at any one time. They aren't looking to making hundreds of investments; they're looking for the right opportunity to present itself and then they'll invest in the one.

Tactics are crucial but strategy is paramount. Tactics govern how a race is run that day, but strategy is what will get you the championship at the end of the year. While each driver wants to win every single race, when it gets to the end of the year the priorities start to shift and strategy takes over. The Sprint Cup is a points-based championship, so ultimately whoever is in first place going into the last race will not have to win the race to be season champion. Since being season champ is the goal, that driver will drive more conservatively to ensure total victory versus single-race victory.

Your personal-finance world is very much like this in that your strategy should drive your tactics. If your strategy is to save the maximum for your Roth IRA and 401(k), then your tactics may be frugality to get more on-hand cash to contribute to those funds.

Frugality is important by its own right, but it's more important because you're working toward the goal of contributing to a Roth IRA. If you just save money and put it in a savings account, ignoring the Roth IRA, you may be spinning your wheels and not getting your full potential. So, review your strategy and how your tactics are working toward your goals.

Other articles of interest at Blueprint for Financial Prosperity:

• 8 personal-finance lessons I learned from Monopoly
• Scrabble and personal finance: 8 lessons from tiles
• What football teaches us about personal finance