I’ve always loved chess; I started playing the game at the tender age of seven and quickly fell in love with its intoxicating combination of tactics and strategy. Although I don’t play chess as much as I’d like today, whenever I have the opportunity I break out my oversized hand-carved wooden chess set that I bought in Tijuana many years ago as a ten-year-old for $10.
Back in 2014, I had shared my love of chess with veteran financial planner Doug Goldstein while he was interviewing me for his Goldstein on Gelt podcast. So you can probably imagine my unbridled enthusiasm after Doug asked me to review Rich as a King, a book he co-authored with World Champion Grandmaster Susan Polgar that uses some of the most-seductive — yet very basic — strategies and tactics of chess as an eye-opening, easy-to-read guide for effective personal finance management.
The book’s concept is brilliant.
Rich as a King is based on the premise that people should design their financial goals with the same objectives that grandmasters do when preparing to play a game of chess. Then, once the overall strategy is in place, it comes down to developing and implementing a plan to carry it out.
The authors make a convincing case, covering everything from the importance of understanding risk tolerance and diversification, to the benefits — and limitations — of budgeting, as well as a thorough investment primer on stocks, bonds and mutual funds.
My favorite part of the book is the fast-moving final chapter, which describes 64 chess strategies to help you become “rich as a king.” Here is one example that compares poor chess-piece development to the danger of leaving all of your money in the bank:
If you keep each of your chess pieces neatly protected in your back row, you’ll lose rather quickly. Instead, activate your team by positioning each member where it can have a hold over the most turf. Likewise, if you only keep your money in low-yielding checking accounts … you will miss the opportunities for it to become more powerful. Doing nothing, eventually to become the target of attack, (is) like believing money in the bank will always maintain its value. Eventually, inflation will clobber it.
The book then builds on that example by concisely explaining in simple terms three ways to keep your cash working for you.
I know what you’re probably thinking right now, but there’s no need to worry: Understanding how to play chess is not a prerequisite for Rich as a King. While there are plenty of chess diagrams and game descriptions for rabid chess fans like myself, the investment ideas in the book can be easily grasped without them. With that in mind, folks who aren’t enamored with the game can skip over the chess-related discussions because they’re conveniently placed in separate text boxes to help those readers focus solely on the book’s finance-related material.
By the way, as an added bonus, the book is also interspersed with several humorous illustrations featuring the two authors, with Doug as Susan’s comedic foil. In one instance, used to highlight smart versus not-so-smart goal setting, the authors are shown creating a list of personal ambitions. In the first frame, Susan records a “reasonable” objective: saving $1000 per month. In frame two, we see Doug jotting down an “unreasonable” goal: beating Susan at chess. Heh.
Yes, aspiring to beat a chess grandmaster at their own game is probably an unreasonable goal for most folks; but as Rich as a King shows us, we all have the opportunity to achieve financial freedom simply by learning to think like one.
Photo Credit: Morgan James Publishing
Interesting approach here. I’ve never been good at chess, but I think it’s because I’m either overly conservative or overly aggressive. I haven’t found that proper balance in play. Balance in finances is also a proper analogy here.
You just reminded me that I need to roll my wife’s teacher retirement over to an IRA. It’s earned zip over the last year…
Thank you for sharing the article. Mixing chess and personal finance is a very interesting concept. Hope to hear more in the future.
What?
Interesting concept in normal times, but how do you compare a game with definite rules to the world’s CURRENT financial situation? Seems like in the real world today, the rules and even definitions of those rules keep being changed to enable the economic machines to keep going!
What always amazes me is how little help is available to the person who is struggling to get that first firm foothold in the slippery muck of managing a budget in the real world. By that I mean the person who has income of less than $2200 gross monthly. Someone who works two jobs to reach that point and has to be very aware of how little time s/he has available both to plan and to work their plan.
One of the best tools I found to help me get traction in those early days was very old fashioned but it worked amazingly well. I got one month ahead on all monthly bills. This freed me from any worries about bad credit marks, late fees etc. When you pay your bills a month early the date it is paid is meaningless. Once you are ahead, if you have a money crisis you have a month’s leeway before it will be visible to your creditors. You will have TIME to figure out how to handle everything and keep from making decisions in the heat of the moment.
I was a month or two ahead on every bill when a near fatal health crisis hit. In five days I was almost dead, stuck in ICU for a week then another four weeks in hospital and too weak to attend to my finances until days before released. Then five more weeks recup at home with no pay…my employer fired me and canceled all insurance after a week. No income at all for almost ten weeks. Thank goodness I was ahead on everything! Now I am working my way back to that point. I am no financial guru, but wanted to mention what saved my bacon. And my home and awesome credit score
Wow, Deb! That is a terrific strategy. For most people, getting a month ahead on all of the monthly bills is probably a tremendous challenge — but the security is well worth it, as your story proves!
I’m glad you are fully recovered and your credit and home were unaffected while you were incapacitated.
A 50/50 approach is probably best with investing…half interest earning and half in the market…IMO.
It is great that you urge people to plan, and implement the plan. You even offer them ways to do it. So many people are paralyzed by fear, and not knowing what to do with their money. Others, are just clueless and living for today.