Power up your portfolio like an expert gamer

August 29, 2023 Matthew Wright
What we can learn about the investing mindset from video games.

Video games are a massive part of the U.S. economy, with consumer spending reaching a staggering $56.6 billion in 2022.1 But it’s not just fun and games. A player’s strategy can affect their financial well-being in the virtual realm—and beyond.

In the quest for success, gamers must navigate a delicate balance: Playing it too safe can lead to failure, while taking too many chances can spell disaster. And the risk extends beyond the loss of in-game currency—it also involves real-world money spent on virtual assets that can be lost during battles and encounters.

As experts in real world finance and economics, we wanted to use our investing expertise to help gamers conquer in-game economies. To do so, we partnered with two World of Warcraft (WoW) Twitch Streamers and introduced them to our own avid gamer, Jeff Kleintop—who is officially Schwab’s Chief Global Investment Strategist—and unofficially, our Chief Executive Gamer.

Jeff explained IRL (in real-life) financial principles through the lens of World of Warcraft, sharing tactics such as, “Think of a portfolio as a raiding team, you don’t want all tanks or all healers, you want a tank and a healer and a damage dealer, or your odds of getting what you want over time are lower.”

So many great conversations happened during the streaming event that it made us realize not only can we relate financial expertise to video games, but there’s a lot investors can learn from gamers too.

Jeff Kleintop—who is officially Schwab’s Chief Global Investment Strategist—and unofficially, the Chief Executive Gamer.

Jeff Kleintop in his gamer room wearing a VR headset and holding multiple gaming controllers.

Investing power-ups

For investors, there are some clear lessons to learn from gamers: Know your goals, adopt a clear strategy, adapt to changing conditions, manage your resources, and continually gauge opportunities and risks.

Whether you’re an experienced investor or a noob, here are six investing lessons gamers can teach you.

1. There’s no easy win.

Experienced gamers recognize that leveling up doesn’t happen overnight. “You progress slowly but steadily—level by level—until one day you realize you are at level 99 in a game or have accumulated a desired level of wealth,” says Samuel Franklin, CEO of game recommendation site Games Finder and a dedicated investor.

To be sure, patience pays off as incremental gains lead to big wins. For instance, a 25-year-old who invests $100 per month into a Roth IRA account that earns 10% annually* will likely amass about $584,000 by age 65, versus $217,000 for someone starting at age 35.2

2. Diversify.

In gaming, it’s usually wise to deploy a variety of tools, techniques, and tactics. This approach increases the odds a player will find a winning strategy. For example, if you run a farm in Stardew Valley, you probably want to hedge your bets by experimenting with a variety of crops in different locales and gauging what works and what doesn’t.

“You’re rarely rewarded in gaming or investing by putting all your resources into a single thing,” Samuel says. A diversified approach to investing helps protect against market volatility, interest rate fluctuations, and geopolitical factors. If one sector drops, another may rise.

3. Stay cool when things get heated.

Fortnite. Apex Legends. World of Warcraft. It doesn’t matter what game you play—when things get ugly, you’ve got to keep calm and carry on. More often than not, this means quelling nerves and managing anxiety. “You won’t think and act clearly if you’re in panic mode,” Samuel points out.

Investing mirrors gaming in this aspect as well. It’s easy to remain calm when a bull market charges forward, and a portfolio is racking up gains. But you need to keep your cool even when a bear market rumbles or sentiment turns negative.

We understand the gamer community because we are gamers.

Schwab has a very passionate gaming community organized by it’s employees where people discuss their favorite games, send pics of their rigs and more.

Learn more about life at Schwab

Image provided by Dustin Gordon, associate of Software Development & Engineering and member of the Gaming employee interest group at Charles Schwab.

Custom built computer by Schwab employee.

4. Know that experience rules.

Whether you’re playing Mario Bros. or League of Legends, you’re going to encounter unfamiliar situations and make some mistakes along the way. But tune in and take mental notes, and you will eventually get the feel of the game and adopt a more intuitive approach. Over time, you discover hacks, shortcuts, and winning tactics.

Learning from both mistakes and successes also provides a compass in investing. For example, you may need to rebalance your portfolio and adjust investments—or move to cash—as conditions warrant. The most successful gamers and investors never stop learning.

They also tap reputable outside expertise. To keep your investing skills sharp, Samuel suggests educating yourself. “Go to YouTube or read an article with ideas and tips,” he says.

5. Make adjustments as conditions change.

Gaming is highly situational—you have to adapt to events in real time. In NBA 2K, for instance, winning involves more than merely executing plays. There are budgets to oversee and players to manage and develop. At any given moment, a player may be fatigued or even injured.

The same logic applies to investing. Your age, goals, and market conditions matter. “You’re going to feel stuck and frustrated at times,” Samuel says. “You have to accept that this is part of the process.” A more aggressive investing strategy may score at one moment but lead to financial airballs later.

6. Focus on the big picture.

Top gamers understand that the goal isn’t to win every battle; it’s to level up and emerge victorious. This often means eschewing shiny objects and quick hits in lieu of slow and steady progress—and avoiding the temptation to double down when things go badly. “Sometimes you have to step back, reassess, and regroup,” Samuel says.

Investing isn’t any different. At times it’s necessary to adjust a strategy and recalibrate a portfolio. But chasing fads, trends, and molten-hot stocks usually torpedoes long-term goals: According to a 2021 Gallup poll, 89% of investors ranked “time in the market” as more important than “timing the market” in pursuit of higher returns.

Image provided by Adriana Sianez, brokerage services representative and member of the Gaming employee interest group at Charles Schwab.

Custom built computer by Schwab employee.

Master the investing arena with the confidence of a seasoned gamer

Legendary gamers and successful investors possess a similar mindset. And while there are no cheat codes in investing, you can level up and ultimately achieve your goals if you focus on the fundamentals and keep a long-term view. Being patient and persistent can pay off. W00T!