The television quiz show Jeopardy! currently has a champion as dominant as Secretariat at the Belmont or Tiger Woods at Pebble Beach. James Holzhauer has won 22 straight games, earning over $1.6 Million. I’ve been enthralled watching his quick wit and ultra-aggressive betting style, and would like to share some financial and life takeaways I’ve picked up from him in the last month. You can see his next episode on May 20 after a two-week break for the Jeopardy Teachers Tournament.
Top 5 Lessons from Jeopardy Champ James Holzhauer
- Power of Compound Interest: James must have come to our talk we gave to some MBA students this spring, because he seems to understand that the best way to reap the rewards of compound interest is to invest early. He does this by going straight for the $1,000 clues at the bottom of the board from the outset, hoping to build up a substantial pot that he can multiply when he hits a Daily Double clue that lets players name their own wager.
- Make Your Risky Bets Early: Now I’m sure James was at that MBA lecture because we told those young students, the majority of whom are unmarried, have no children, and do not own homes, that now is the time to take a risk. Life only becomes more complicated and the stakes only become higher as we grow older and accrue responsibilities. It is far easier to take a big risk, like starting a company, when you have less to lose. This is also a great argument for paying down debt, because flexibility equals freedom. James follows this advice by going all-in on his Daily Double wagers in the first round to build a lead, but bets more conservatively in the second round to maintain his lead. He knows that if he slips up early, he will have time to recover.
- You Can’t Replace Old-Fashioned Hard Work: Ken Jennings famously won 74 Jeopardy games, answering the final clue correctly 51 times for a rate of 68%. Today’s champion James has answered 21 of 22 correctly, or 95%. His winning ways are ultimately a consequence of his deep body of knowledge that comes from consistent study. In one interview he said he memorizes children’s book titles when he takes his daughter to the library! In sports and in business, there’s almost always an edge to be had for those willing to outwork the competition.
- Competition Brings Out the Best In Us: Of Holzhauer’s wins, 20 of 22 have been out of reach in Final Jeopardy! But in the closest game, Adam Levin earned $53,999, losing by only $18. This is the largest score for a Jeopardy loser in history, and only happened because Levin knew he had to play aggressive and bet big to keep up with Holzhauer. If we want to be successful, we can do much worse than to surround ourselves with high achievers who push us past our comfort zones.
- People Make Life Worth Living: I have been most impressed with Holzhauer at times late in his games when his score has put his competitors out of striking distance. He’s had the opportunity to make bets as high as $30,000 without risk of losing. Instead he may bid $9,812, his wedding anniversary, or a close friend’s birthday. This is a fantastic reminder that while we strive for achievement in the various spheres of our lives, the people we hold dear around us are what make life special.