Football fans rejoiced this past week when the NFL lockout ended and we were once again treated to news about our favorite teams and players. The last four months we were put on a forced diet of football labor dispute news and it certainly wasn't much fun. There was, however, a silver lining to seeing the labor negotiations on the news every day—there are lessons we can all learn from this battle between billionaires and millionaires.
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Short Term Pain, Long Term Gain
The NFL lockout lasted about four a half months but the final agreement will be in force for ten years. The last four and a half months were probably not fantastic for the players, as they weren't permitted to practice at or use team facilities, they lost valuable training camp time (crucial for players new to teams like rookies), and weren't able to conduct typical football business.
However, it was a small price to pay to reach an agreement that will preclude this type of thing from happening for another ten years. A crucial lesson from this is that sometimes it makes sense to take a little pain now, to gain more in the future. Why do you go to college? It's four years of extra schooling but it improves your earning capability for the rest of your life. Is it fun comparing the fee structures of brokerage accounts? What about reading a mutual fund prospectus?
For most, the answer is no. But a little time spent reading about the management, the fees, and the approach may help you decide on an investment you might not touch (much) for years. [In Pictures: 10 Things You Should Always Buy in Bulk.]
Ignore the Headlines
All throughout the lockout, there was talk about how we might lose the 2011-2012 season. Both sides had an incentive to work hard to reach an agreement and the negotiations were billed as billionaires (owners) versus millionaires (players). Losing a single season would cost both a significant amount of money so it was clear they wanted to avoid it—but not at the cost of reaching a long term sustainable agreement that both sides would be happy with.
When it comes to finances, it's important to ignore the headlines, ignore the hype, and focus on the details. The best example of this has to do with investing and the economy. The real reason why buy and hold and regularly scheduled investments, like a monthly infusion into your 401(k) from your paycheck, work is because it takes you and your emotions out of the equation. We are advised not to time the market not because people are inherently bad at it, it's that we're bad at making decisions with our emotions (which are significantly affected by the news).
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There's Never A Rush
When the owners voted in favor of the agreement and sent it to the players for their ratification, many expected the process to be swift. It took the players several days to review the document, get the votes, and finally ratify the agreement. This makes sense since there are only 32 owners and 1,900 players. I'm sure the public, and the pundits, expected the agreement, which was agreed to in principle, to be ratified almost immediately but the players took their time to read and review the document—which is smart in any case. There is never a rush to do anything. In the case of the lockout, it lasted over four and a half months. A few more days wasn't going to cost anything even though there was pressure to agree immediately.
When it comes to anything in your finances, there's never a rush either. If it's a sizzling hot deal, it'll be there after you deliberate or it'll come back later. Seasoned salespeople may try to pressure you into a decision by giving you that sense of urgency, learn to ignore it and go at your own pace. There are just three of the lessons we can learn from four and a half months of labor strife in the NFL but there are plenty more!