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Win or Draw

April 21, 2012

Win or draw

http://businessmirror.com.ph/home/banking-a-finance/18643-win-or-draw

Monday, 31 October 2011 18:16 Edmund Lao / Personal Finance

THE game of chess is both science and art.

It is a science because there are principles and laws governing the game. Break it and more often than not, a player loses a game. Just like with science, if scientific laws are broken, disaster is sure to happen.

It is also an art because it takes a lot of imagination and photographic memory to calculate moves ahead in order to outwit and unnerve an opponent.

Here, our most famous local chess hero is my idol, Grandmaster Eugene Torre. Below is an anecdote on his road to his great checkered career.

Torre shot to prominence in 1976 as a possible future title challenger after winning a strong four-man tournament in Manila ahead of world champion Anatoly Karpov, thus becoming the first player to finish ahead of Karpov in a tournament since the latter became a world champion. The high-point of his career came in the early 1980s when he was ranked world No.17, successfully going on to qualify to be a candidate for the world championship after tying for first with Lajos Portisch during the 1982 Toluca Interzonal.

Torre has the distinction of being the first Asian player to earn the title of International Grandmaster. He also became the first Asian to qualify for the prestigious Candidates Matches for the 1984 World Championship.

The focus of this article will be his stint in the 1984 Toluca Interzonal. In the beginning, he got four draws and a heartbreaking loss in the fifth round game for a measly two-point output. Starting with round 6, five highly-rated opponents fell to the juggernaut of Torre.  He was now leading the field and the championship title was within his sight.

Coming off a five-game winning streak, all he needed was to draw the remaining three games. Everything seemed to be going well as planned until the penultimate round. He was up against the feared Hungarian GM Portisch who was out to play for a win. Torre faltered early on and had an inferior position going into adjournment. He was in danger of losing not only the game but also his chance to be a contender for the World Championship. The game was adjourned twice and looked like a lost bid for Torre who was two pawns down in a king and knight endgame. The general consensus was that there was only a 20-percent chance to draw the game.  And then the miracle—completely exhausted from a whole night of analyzing and unable to find the way to a draw, Eugene fell asleep and in the early morning, the way to the draw came to him in a dream. And indeed, after more than 100 moves, their game was drawn. Both GMs tied up for first place and qualified to the Candidates Matches. Hadn’t Torre been focused, resourceful and tough, he wouldn’t have finished strong and made our country proud.

What does this have to do with personal finance? Personal finance is like a chess game. In handling money, there are guiding principles that result to growth. If not followed, the result is financial disaster. Like chess, the goal is to checkmate the King in the end. With personal finance, it is always advisable to begin with the end in mind and checkmate the financial enemy: BEING BROKE.

In 1991 a frugal friend already had P100,000 in his savings account after working only for three years. That time, P100K was already a substantial amount. There was a problem. They bought a lot for P700K and the funding for building their new home was short. He was asked to share his life savings to help fund the new home. It seemed his entire savings would be wiped out. This is similar to the situation of GM Torre’s crucial game against GM Portisch. This situation did not discourage my friend. Instead, he decided that he will aim to accumulate P60K in a year by putting P5K in a time deposit per month from his salary. The interest was then pegged at 16 percent per annum which is very high compared to the standard nowadays.

Unknowingly, he made each P5K deposit work for him when it earned him P800 per year passively. Although he did not reach his goal, his habit helped him save P50K that year alone. He was off his goal by P10K, which can be compared to a game of chess as a draw, as he was more than halfway his goal. As of the present, his P50K, along with his regular placement in his investments, has already grown way beyond his targeted amount.

From the stories above, we can learn some pointers to achieving goals. These are:

  • Focus on discipline and habit and ignore negative environment;
  • Resourcefulness;
  • Strength of character;
  • Will to survive and go for the win; and
  • Draw and equalize now to win later.

Let us be inspired by this story and start our quest to have a strong financial future.

Edmund Lao is a candidate for registered financial planner (RFP) designation. He was recently awarded the first  Investment Savvy Award by Sunlife’s It’s Time! To know more about the RFP program, please visit http://www.rfp.ph or inquire at info@rfp.ph.

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