Every one of us has a little tiger in our woods. I’m referring to the golfing moments where for a brief second, we feel like we might actually have it in us to be decent at the insane game of golf. Playing golf has taught me some interesting lessons about investing.

Most people only dream of playing par golf–it’s one of my dreams anyway, but I’m a long way from getting there. I have a membership at a local course; the second hole is a short par four, with a sharp dog-leg right. The fairway is narrow and protected by brush, trees, and water, especially on the right side of the fairway. You can play it safe by hitting an iron off the tee followed by a wedge into the green. Or, you can try to accomplish the unthinkable by whipping out the driver, cutting the corner, clearing the brush and the water, then landing your ball just in front of the green with a chance to roll on for an eagle putt. Here’s the best part. At least half of the golfers who I’ve played with this year will pull out their 450cc sasquatch mallet and attempt the unthinkable, trying to drive the green (forget the fact that they haven’t hit a straight drive with that club all year long). You can probably think of many reasons for why they do it (one of them being the triple bogey they took on hole number one). And you’ve undoubtedly seen similar situations. Maybe you’ve even played that hole with me this year. Of course, rather than hitting that perfect drive, their surprising, habitual slice sends the ball into the lake (“surprising” because of the quintessential cursing that follows the slice). They lose at least one ball, maybe two. And then, after all that anguish, they take the customary “drop” somewhere up in the middle of the fairway and lose any chance of getting to the green in two strokes. The overarching thought here is simple; as amateurs, instead of playing prudent golf and trying to consistently keep our score low, we’re always trying to shave off a few strokes from prior mistakes by trying to execute the near-impossible golf shot.

Investors have a tendency to make decisions in a similar fashion.

We try to cut corners. We take a little bit too much risk for where we’re at. We are rarely content with good (par) rates of return. We want better (birdie/eagle) rates of return. I understand the intrigue and the desire to maximize the usefulness of our hard-earned savings. But, at the end of the day, when we try and get to the green in one long drive, we run the risk of shanking it into the trees. At certain points in our life, it’s prudent to take calculated risks. It’s part of the American dream. I think a lot of dental practitioners do this every day when they decide to spend a decade in school, only to leave with a pile of debt and no assets to speak of. That’s risk. That’s entrepreneurial spirit. But there are some key differences here; you now have the intellectual capital to back up your risk-taking, it becomes calculated. It becomes prudent. I guess I’m saying that you better know what you’re doing if you try to take your driver over the trees and reach the green in one stroke.

The discipline and consistency required to play par golf will definitely impress your friends; and even though we all might have an occasional Tiger in our Woods, we would probably fare well trying to use our irons a bit more often, and our driver a little less.