According to Wikipedia, Game Theory is "the study of mathematical models of conflict and cooperation between intelligent rational decision-makers. Game theory is mainly used in economics, political science, and psychology, as well as in logic and computer science. Originally, it addressed zero-sum games, in which one person's gains result in losses for the other participants.Today, game theory applies to a wide range of behavioral relations, and is now an umbrella term for the science of logical decision making...”
Life can be viewed as if it were a game. But make no mistake, when it comes to personal finance, you’re dealing with other players who know how to play and win the game. While you’re the most important player, the other key players include government, financial institutions and big business. In your game, these characters are not your enemy, but they can oppose you when the only rules of the game that are being used are theirs. That’s because they are trying to get real money from you just like your opponents do when playing the board game Monopoly® and go after your play money.
While they are important players in your life, let’s just say you deserve a fair chance and an approach that will allow you to win!
✓ Adopting rules that favor you and offer optimal outcomes
✓ Using the right tools to use and knowing when to employ them
✓ Identifying the right people for you to call upon as teammates
✓ Having an opportunity to model and view hypothetical outcomes before you decide
✓ Employing strategy that minimizes the erosion of your wealth by using the best
How does your approach compare? When it comes to your personal financial situation, are you playing a somewhat unorganized game made up of ‘silo’ like decisions…looking at just one move at a time? Such a game with little or no coordination and integration can result in you experiencing results that are less efficient and effective than what you’d want.
A better approach is available using tools to evaluate options and better information that can help you win by applying game theory to your individual situation. It starts with a personal financial gameboard, rules that favor you, and someone who can act as a personal financial coach. Talk to your Leap Professional and discover a whole new world of possibilities.
Frank R. Tooton, CFP®, CLU, CH.F.C., is a Leap Professional and brand ambassador, resides in Nova Scotia, Canada
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