What Nick Saban Can Teach Us about Investing

University of Alabama Head Coach Nick Saban is a seven-time college football National Champion and a nine-time SEC Champion. He is considered by many to be the greatest coach in college football history. Forty-four of his players have been selected during the NFL’s 1st Round Draft. In addition, many of the players he has coached have collectively earned hundreds of millions of dollars in NFL salaries and signing bonuses.

When asked what his secret is for this success, Saban does not hesitate. His answer: “The Process.”

This “Process” of Saban’s has become a thing of legend within sports and is now extending itself into the business world and beyond. Instead of focusing on winning the game or even the score, Saban coaches his players to break the game down into small competitions like winning an individual play or taking care of a single assignment on the field. According to Saban, by taking care of the little things, the score and ultimately winning will take care of itself. It is hard to argue with his results. He is essentially creating compound interest in the field.

The majority of us will never see the playing field in an SEC football game, but that doesn’t mean we can’t use Saban’s process in our own lives. In fact, for many of us, one such process is already in place in the form of our 401(k) or other employer retirement plans. Savings are contributed from every paycheck in good times and bad, with no guesswork required for what to invest in this time. That decision has already been made, and over time those seemingly small acts can add up tremendously. There is no emotion, thinking, or effort involved. You simply live your life and let the power of automated savings do the work from there. This is the Process at work.

Some astounding investment results and wealth creation have resulted from this approach. According to Dave Ramsey’s research company, Ramsey Solutions, continued savings into 401(k)’s have created more American millionaires than any other method by far. They estimate that 75% of today’s millionaires attribute their wealth to this long consistent savings pattern. More than inheritances, lottery winnings, or even business ownership, these “401(k) millionaires” have taken the slow and steady approach and invested their way to financial independence.

As with Nick Saban’s coaching career, building wealth may not always be a smooth ride. Saban famously failed as an NFL head coach with the Miami Dolphins and has lost his fair share of games, including multiple championships.

Markets will go up and down, and at times, investors may question if they should reduce or stop savings altogether due to the volatility. For those that have a strong process in place and remain focused firmly on the future, that volatility will one day be just as forgotten as the many setbacks and losses that Saban has faced along the course of his career.

The Process that Saban has built has led to fantastic results on the field to the point of the university already erecting a nine-foot statue of the coach on the Tuscaloosa campus. Regular 401(k) contributions are just one of the many examples of similar types of systems that we can create in our lives to build wealth. If you have another one that has worked well for you, I would love to hear about it.

If you need help creating your process or simply confirming that yours will get you where you want to go, we can also help. There may never be a bronze statue built in your honor due to your saving or investing process, but you could end up with something arguably more desirable: complete financial freedom.

Chase Kerby, CFP® AIF® is an Advisor with Rather & Kittrell.  Chase is available at [email protected].