Average Joe’s

The movie Dodgeball: A True Underdog Story came out in 2004.  It’s a story about gym owner Peter Lafleur (Vince Vaughn) trying to save his gym.  The gym is very behind on its bank loan and Peter is concerned it will be closed.  One of his gym members suggests they enter a dodgeball tournament in Las Vegas to pay the bank.

Here are three financial planning lessons learned from Dodgeball…

Pay Attention to the Underdogs


Peter and his rag-tag team from Average Joe’s Gym were clearly the underdog of the tournament.  Average Joe’s got crushed by a Girl Scout Troup in a local qualifying match.  However, they ended up winning by default as the scouts were caught cheating (go figure).  Somehow they won enough games to get to the finals.  This was a classic David vs. Goliath story when they went up against powerhouse Globo-Gym for the championship.  David (Average Joe’s) looked like the biggest underdog ever.

Investing in the underdog is the sector of the market that no one currently likes.   These are the castaways—the items found in the back of the store on the discount rack.  Think “Blue Light Special.”  Right now in the financial markets this would include commodities and U.S. Treasuries.  One reason commodities are down is due to the collapse of the price of oil.  This is partially the result of a significant increase in the supply of oil. The increase in supply is primarily due to the process of hydraulic fracturing (“fracking”) here in the U.S.  Additionally, the demand for commodities from China and other countries has finally begun to slow after all of these years.  The other issue with China is you can’t really trust the economic numbers the government publishes monthly.  China is the only country that makes the United States government look like they are telling the truth with the economic numbers they publish.  But that’s another story.

U.S. Treasuries have rallied since the Federal Reserve Board (“Fed”) has cut and kept short-term interest rates near zero for an extended period of time.  This has caused bond prices to rally.  There is an inverse relationship between interest rates and bond prices.  When interest rates decrease, the price of a bond increases.  When interest rates increase, the price of a bond will decrease. The Fed has been communicating for some time now that it will raise interest rates.  However, they have not said exactly when.  Many commentators believe it will be sometime in 2015 or 2016.  The last time the Fed raised interest rates was in 2006.  Said differently, something will always be on sale in the bargain basement.  That doesn’t mean you should give up on an investment just because it isn’t currently “working.”  Most investors are better served to have a diversified investment portfolio.  This means, by definition, that some investments won’t be “working.”  Investors bailed out of the technology sector in 2000 when the tech sector crashed.  Leading up to this, they just couldn’t get enough.  Maintaining a diversified portfolio will allow you to avoid making these bets.

Do the Work


Average Joe’s Gym team was coached by dodgeball legend “Patches” O’Houlihan (Rip Torn) who explained to the team the five D’s of dodgeball…Dodge, Dip, Duck, Dive and Dodge.  Never mind that two of them were “Dodge.”  One of his training techniques included throwing wrenches at the team.  This, of course, was to get them in shape for the big game.  Investors also need to do the work.  And you may need a (financial) coach along the way.  Just get one that (hopefully) won’t be throwing wrenches at you.  Doing the work means, well, doing the work.  Have     a plan—work the plan—adjust as needed.

To paraphrase Patches, the five D’s for your financial planning are Desire, Design, Dedicate, Defer and Deliver.  To have a successful plan, you will need to have the desire.  This is all about personal responsibility.  No one else can want this for you.  You need to want it.  This can’t be outsourced.  Design is the planning stage.  How will you get from point A to point B?  This will be fluid and will change over time. Dedicate—no slackers allowed here.  Defer gratification.  Ah yes.   Instant gratification and keeping up with the Joneses.  These are two powerful emotions.  You will need to minimize both of these if you want to be successful in the long term.  If you are successful with the first four D’s, you should be able to deliver.  I didn’t mention anything twice, did I?

Invest in Yourself


Unbeknownst to his teammates, Peter sold the gym to Globo-Gym the night before the championship game for $100,000.  He then took the $100,000 and bet on Joe’s winning the game.  The odds were 50-1.  In this particular case, it really wasn’t an investment.  It was a gamble…a big-time gamble.  He put all of his chips in one pot.  Not what we would recommend.  The day of the championship, Peter runs into Lance Armstrong (remember him?) at the bar.  As Peter is crying about quitting, Lance reminded him how many times he could have quit.

Naturally, Average Joe’s Gym won.  After winning the championship game, Peter took his $5 million in winnings and bought back the majority of the stock in Globo-Gym, which owned Average Joe’s Gym.  Although it was taken to the extreme, Peter knew enough to invest in himself.

You will also need to invest in yourself, which can take many forms.  Getting a college degree doesn’t hurt; even though it may not be the meal ticket it was ten to twenty years ago.  With that said, going to college certainly isn’t for everyone.  To be competitive, however, some level of education after high school will be required.  Perhaps it’s an associate’s degree from the local community college and then continuing on for a bachelor’s degree.  Maybe it’s a certificate program for a specific industry.  Other students might consider going to trade school.  The good news is that these jobs (electrical, plumbing, HVAC, etc.) typically pay decent wages and won’t get outsourced to India.

Financing a college education today can be a big challenge.  According to the College Board, the average tuition, room, and board at a private, nonprofit, four year school for 2014-2015 was $42,419.  The cost of a public, four year out-of-state school was $32,762.¹   Either way, these are very big numbers.  And that is for one child!  Keep in mind these are also national averages.  It’s very easy to see prices far in excess of these at private schools in New England.  Additionally, many recent college graduates have had difficulty finding suitable employment that would reflect having a college degree. We’ve all heard stories of college graduates living in their parents’ basement and working part-time as a barista at Starbucks.  No need to have a four year college degree to do that.  One reason for this is the continued impact of the Great Recession of 2008-2009.  This has caused businesses to be very slow to hire.  When they do hire, they are generally looking for some work experience.  The sharing economy (Uber, Task Rabbit, etc.) has also changed the demand for full-time labor.  It looks like a number of folks are free agents now.  Getting part-time gigs may be the norm for many.  This means high school students need to pick their college major wisely.  It is estimated that 80% of college students change their major at least once.² That’s fine.  You will just need to be careful about the classes you’re taking.  If you end up changing majors, you want to get as much credit as possible for the classes you took.  You don’t want to end up like Bluto in the movie Animal House and be saying, “Seven years of college down the drain!”

Investing in a college education used to be a very good investment.  Invest upfront when you are young and achieve a lifetime of higher earnings.  Today students and parents need to be much more cautious about how they invest in higher education.


The three financial planning lessons learned from Average Joe’s are Pay Attention to the Underdogs, Do the Work, and Invest in Yourself.  If you need help being an “Average Joe”, please give me a call at (860) 645-1515 or email



Thomas F. Scanlon, CPA, CFP®

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The information contained in this report does not purport to be a complete description of the securities, markets or developments referred to in this material.  The information has been obtained from sources considered to be reliable, but we do not guarantee that the forgoing material is accurate or complete.  Any opinions are those of Thomas F. Scanlon, CPA, CFP® and not necessarily those of RJFS or Raymond James. Expressions of opinion are as of this date and are subject to change without notice.  Tax preparation and accounting services are provided by Borgida & Company, P.C., not as a service of Raymond James. You should discuss your tax or legal matters with the appropriate professional. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation.  Diversification does not ensure a profit or guarantee against a loss.  Investing in commodities is generally considered speculative because of the significant potential for investment loss.  Their markets are likely to be volatile and there may be sharp price fluctuations even during periods when overall prices are rising.








¹ The College Board

² National Center for Education Statistics