Fantasy Sports: Waste of Money or Side-Hustle?

That title is meant to produce a smile.  I don’t actually think that fantasy sports can be a legitimate side-hustle for most people, but I was led to this topic based on my past few monthly budget reviews.  In each of the past two months, I had entries for fantasy sports winnings.  These were payouts collected from my two fantasy football leagues.  The payouts also included pre-payment for each of my two fantasy baseball leagues that I am in.  This observation made me recall a conversation I had with a good friend and constant reader Mark (shout out, M-).  

When I first began the financial independence journey, I took it very seriously.  I started to eliminate expenses that were unnecessary, and the momentum became very obvious and this process of questioning everything I spent money on because quite addictive.  During this process we came upon the time of year when one of my fantasy seasons was about to kick off.  Since the initial outlay for my leagues is somewhat sizable, it led me to question whether or not I should continue to play fantasy sports.  When I broached the subject with Mark, the response was something along the lines of “… why would you quit, you keep winning…?”  While this was an oversimplification and a generalization, it did lead to further discussion about the fact that over the past few years, I have managed to come out ahead on my overall fantasy sports leagues.  For each sport that I play, at least one of the leagues has multiple avenues to earn money.  It isn’t simply the person with the best record who takes home the loot.  For example, in one league I am in, the top point scorer for each week wins a small prize.  String together a few weekly winners and you can earn enough to pay your entry fee.  There are additional prizes for overall leaders in points, playoff seed, best individual players and a few others.  By keeping each of these prizes in mind, I have been able to manipulate my team to the point where I have managed to maximize my investment.  

One example of this is in one of my fantasy baseball leagues.  It is an auction style league with keepers.  In this type of league, you bid on players and the winning bid becomes their “salary.”  Then you can keep a certain number of players from year to year, but their salary has escalation clauses.  About three years ago, my team was muddling along.  I had a roster filled with veterans and they were not performing well.  I came to this realization early enough in the season to understand that I was not going to vie for the playoffs.  I decided at that point to start building for the future.  I scoured the rosters of likely contenders and identified several young, cheap players that they would likely not be using much in the current year but who had tremendous upside. I then crafted a few trades that sent my few marketable players that would help them in their run to the playoffs and in exchange received a few players that I considered “scratch-off tickets.”  

Since this is a personal finance blog, I won’t go too inside baseball here but in a nutshell I would up with a few very impressive young players that were very desirable to all players in the league.  Once the season ends, there is generally a scramble to maximize the value of the number of keepers that are allowed.   At the time of this anecdote, we were able to keep up to 7 players.  I used some of these young studs as the anchors in trades that landed me several superstar players while keeping my overall team salary at a reasonable level.  This approach has allowed me to put together a team that has scored several weekly points prizes, made the playoffs each year since those deals and be among the league leaders in total points each year.  

So, just to bring things back to personal finance and perhaps answer the question asked in the title, below are the details of the most recent season in one of my fantasy football leagues (I chose football since the data is the freshest).

Entry Fee: ($175)

Weekly Top Points (2 weekly wins): $40

#1 Seed in Playoffs: $150

#2 in Overall Points: $130

League Champ: $280

Total Net Winnings: $425

Monthly Update – March 2019

As I mentioned last week, I am once again a little behind schedule on this post but here is my analysis of my monthly income and expenses for March 2019.  As per usual, below I have listed a running three month look for comparative purposes.  Since I missed this update for February, the three-month look reflects that.

First, here are the numbers:

Category: Dec 2018 Jan 2019 March 2019
Total Monthly Gross Pay: 100% 100% 100%
Taxes Withheld: 15.96% 23.02% 23.02%
Other Withholdings: 3.82% 4.85% 4.85%
401K Withholdings: 0% 12% 12%
Diverted to Investments Account: 27.14% 36.2% 7.4%
Diverted to Savings Account: 24.34% 0% 22.52%

The numbers that jump off the page at me start with percentage diverted to Investments.   This figure has dropped dramatically since January and I think that this may just be a timing thing.  The final pay period of the month of March fell at the very end of the month so the automatic diversion of funds to my investment account occurred after the turn of the calendar.  This should be picked up in next month’s review.  Additionally, I was able to divert a sizable percentage to Savings account.  At this time of year, I pilfered my savings account to invest in our ROTH IRA accounts.  This money was paid out of savings accounts / emergency fund money and I was able to divert $3500 later in the month back into my savings account to begin to replenish the emergency fund.  

I am beginning to investigate whether I can increase my 401K contribution percentage as well as increasing the amount that I divert automatically to my taxable investment account.  Those decisions will be put on hold until I can fully replenish my emergency savings.  Working in consulting can cause period of risk between projects where my income may not be very secure so the impetus to have a strong emergency fund is always there.  My goal is to have this account cover at least 5 months of spending.  Once I have this account fully replenished, I will strongly consider upping my bi-weekly contributions to Vanguard from $550 to $600.  Additionally, I will consider upping my 401K Contribution percentage from 12% to 13%.  Once those changes happen, I will report that in a future post.

2019 Goals- Three Month Check-Up

I noticed that I have fallen behind on some of the monthly items that I have committed to writing.  In particular, I need to add an entry for a check-up on my 2019 goals as well as a monthly budget review.  The budget review is more pressing as I believe I even missed a month for that series, but I have decided to do the goal check-up first as it requires less work on my part.  I will work on the budget review for the month of March soon and get that posted.  In the meantime, below is a look at the goals that I had setup for myself for 2019 and a snapshot of where I stand on progress for those goals.  

  1. Keep Weight under 235:

I am glad that this is the first goal on the list, and I am forced to dive right into this one.  In short, I have thus far FAILED miserably on this goal.  I started the year strong and was able to close in on 240 towards the end of January but since then I have allowed my weight to fluctuate dramatically.  I continue to exercise daily, waking at 5am each morning to get a 3-mile walk in.  I also use the stairs as often as possible throughout the workday.  I also continue to drink plenty of water.  Where I have fallen off is diet.  I have had way too many “cheat days.”  I guess you can’t really call them cheat days when they outnumber the good days.  I need to re-dedicate myself and buckle down.  I hope to have better news to report in my next update.  As of this morning I tipped the scales at 241.5.  

2. Max my 401K contributions:

Based on my current withdrawal percentage, I am on track to max out my 401K again this year.  The allowable amount was increased in 2019 to $19,000 from last year’s $18,500.  Even with this increase, my percentage will max this out at some point in the 4th quarter of 2019.

3. Fully Fund Wife’s ROTH IRA (Stretch Goal:  Fully Fund my ROTH IRA as well):

After a meeting with my financial planner, I executed the transaction to fully fund my wife’s ROTH IRA.  Since she does not have a traditional IRA, I was able to move the necessary money into an unused Traditional IRA and then perform a backdoor ROTH conversion.  As I have mentioned previously, I was unsure if the income rules for contributing to a ROTH would be met so we decided to execute the investment in this manner.  As for my own account, we decided to wait until consulting with our accountant on our yearly tax returns.  Since that was completed recently, we got the green light from the accountant to contribute to my ROTH IRA as well.  This too was executed recently.  This is the first time in several years that I have contributed to my ROTH IRA and it feels pretty good.  To be clear, my lack of investment has not had anything to do with concern over the income rules, it was merely laziness and lack of prioritizing this type of investment.  Now that I am back to contributing to this account, I hope to continue to do so going forward.

4. Read at least 24 Books & Listen to at least 24 audio books:

This goal is very much ahead of schedule.  In the first quarter of the year I have read 13 books and listened to 12 audio books.  I continue to read/listen to a mixture of Fiction and Non-Fiction and have found this balance to help keep my interest in reading very high.  Generally, when I am reading a Fiction book, I will offset this by listening to a Non-Fiction book on audio.  Currently I am reading Gods of Mars by Edgar Rice Burroughs and listening to Grit by Angela Duckworth.  So, depending on the mood I am in, I can gravitate to either the fun Fiction storytelling or opt for the self-improvement of the Non-Fiction book.  I would love to hear from the readers what they are reading currently as this helps give me ideas for future reads.   

5. Re-read “The Millionaire Fastlane” by MJ DeMarco & “Set for Life” by Scott Trench:

I have still not begun a re-read of either of these titles.  However, I have decided to pick up one of them as soon as I finish the book that I am currently reading.  

6. Get Vanguard Taxable Investment Account over $55k

As of this writing, my Vanguard account sits at $51,451.89 so I am very much ahead of schedule on this goal.  I continue my regular bi-weekly automated transfers to this account.  I have supplemented this by moving over additional monies as I have earned them.  This has come from sources such as Fantasy Sports winnings, selling household items, Swagbucks and other sources.  Each time I have a few of these items, I move the money and execute a transfer to Vanguard.  It has amazed me how quickly these little transfers can add up.

7. Pay Credit Cards in full each month:

Thus far, I have paid all credit cards in full each month of 2019.

8. Get HELOC Balance under $30K:

The current balance on my HELOC is: $30,317.76.  This balance is up slightly since my last update even though I have continued to make monthly payments.  I guess this is a signal that my monthly payments are not big enough.  I have fallen off on my goal of paying as much as I can each month to this debt.  This is due to the fact that I have had higher than normal credit card spending, and other expenses arise.  I have continued to be committed to paying the credit cards in full each month so even though spending has been higher than I would like, I have still been able to pay them off each month and not incur any interest charges.  In addition to the credit cards, we have had some one-time expenses in the past month.  In particular, my son had his tonsils removed and this led to some medical bills.  

9. Continue to Blog weekly:

So far, I have maintained a weekly publishing schedule.  I have not been as organized as I would like and each week the publish date seems to sneak up on me.  My workload has picked up lately and that has taken some of my attention, but I would like to return to being much more organized and having a few articles drafted to choose from each week.  I am working on a productivity hack to help me with this goal.  I am working to block off some time each a few days per week to focus on the blog—whether it is writing, researching, coming up with topic ideas, etc.   

10. Earn additional $100 per month in income through various side hustles:

For March I was able to exceed this goal once again.  For March, we were able to generate an additional $380.00.  The details of that extra money are below.

  • ¬ Swagbucks.com:  $75
  • ¬ MyPoints.com:  $50
  • ¬ Sell Used Items:  $30
  • ¬ Fantasy Football winnings:  $225

The largest entry in each of the past two months have come from Fantasy Sports winnings.  I currently play in 2 Fantasy Football leagues and 2 Fantasy Baseball leagues.  Obviously, I cannot count on winning money in those leagues each season, but those little boosts have certainly helped me achieve this particular goal the past few months.