What Wordle Has Taught Me about Financial Planning

By Kent W. Schmidgall

One can argue that the financial planning profession is not particularly nerdy, although plenty of nerds can be found here. Although it is a bit tougher to make the case that Wordle fans are not nerdy, it is possible to be a devoted Wordle player without being branded a nerd.

What cannot be disputed, however, is the ironclad nerd status of a financial planner who attempts to draw corollaries between Wordle and financial planning. In this article, I attempt to do just that.

The History of Wordle

Wordle is a web-based word puzzle created by a software engineer named Josh Wardle. He made it available to the public in the fall of 2021, and it swiftly gained a worldwide following.

The gameplay is very simple. Each day, players have six attempts to guess a five-letter word. After each guess, correct letters and positions are revealed in a wonderful and satisfying burst of yellow and green tiles (and dreary gray tiles for incorrect guesses). One unique feature of this game is that there is only one new puzzle per day, and the entire universe receives the same puzzle.

I’ll stop now. If you don’t already know the rules, Google it.

In January 2022, I read an article in The Wall Street Journal about this fledgling game. Without having a clue what I was doing, and without knowledge that it would eventually become one of my chief hobbies, I stumbled my way through the puzzle, solving the word DRINK in six attempts. Since then, in this chaotic and frenzied digital era, I have grown to love and cherish the simplicity of this game.

As of early July, I have an unbroken streak of 542. I have never failed to complete the puzzle, nor have I used any cheats or hints. Pride comes before the fall, as the saying goes, so undoubtedly my demise is forthcoming.

Look Ahead and Anticipate Problems

Many Wordle players’ streaks have ended by falling into what I call a “word trap.” A word trap is when a common word structure is identified, but there are more possible solutions than remaining guesses. For example, early on in my Wordle career, I was pleased to determine after a few guesses that the word ended in IGHT. Unfortunately, as you know, there are many five-letter words with this word structure (I count seven common words ending in IGHT). My sixth and last guess was a 50/50 crapshoot, and I guessed right.

That was the last word trap I fell into. Now I try to recognize well in advance when a word trap is brewing and plan accordingly. As an example, if I spot an OUND word trap, rather than leave my remaining guesses to chance, I will sacrifice a turn and use a word like WHUMP, eliminating WOUND, HOUND, MOUND, and POUND.

I recently had one of my closest calls yet with JOKER. On the surface, this isn’t a particularly hard or obscure word. But there are many words with the _O_ER structure, and many Wordlers fell on that day. However, yours truly soldiered on, recognizing the trap well in advance. I burned two guesses just trying to eliminate options and still squeaked by in six guesses.

Similarly, when preparing a financial plan, we must look ahead and anticipate potential problems. Rather than attempt to figure things out while we are in the midst of a thicket, we should watch for and avoid the thicket in the first place. A well-thought-out financial plan will include stress tests and contingency plans for life’s curve balls.

Stick to Principles and Processes

Many people play Wordle by the seat of their pants, choosing a starting word based on the direction the wind is blowing or their mood that day. Frankly, I envy these people, as they are probably playing the game as it was intended to be played. Then again, who’s to say how it should be played? I play as I see fit, and it brings me joy.

I also play to win and maintain my long-lasting streak. Thus, to increase the probability of success, I have developed some core principles and processes to which I adhere. Doing so reduces the role of luck and guesswork. That sounds like good financial planning. I have been burned many times by being on the wrong end of a bad Wordle bet. Although uncertainty cannot be completely eliminated (after all, my vocabulary isn’t infinite), having a plan and framework minimizes regretful decisions. Again, like financial planning.

For example, one of my core principles is to choose five new letters for my second guess (unless my first guess leaves only a handful of potential solutions). Statistically, this is a winning principle, even though it may seem counterintuitive at times.

As a planner, I adhere to evidence-driven principles and strategies rather than rely on feelings and make snap decisions based on the latest headlines. In an uncertain world, all we can do is position ourselves to provide the best odds of success based on the information that is available to us.

Don’t Swing for the Fences

I learned not to swing for the fences in hopes of solving the puzzle quickly. Instead, I stick to my principled and disciplined approach. After uncovering a few letters, it may be tempting to try to find the answer in two or three guesses. However, when there are numerous potential remaining solutions, on average, it is far better to make a narrowing guess to eliminate some options.

For example, I once uncovered R, A, and E on my first guess. Rather than stick to my tried-and-true process, I reached for the stars and next guessed EARTH. Do you know how many five-letter words contain an R, A, and E? Here’s a hint—a lot. A far better choice would have been to select five new letters to curb the possibilities. Instead, I had to wrangle my way to BAKER.

In like fashion, many investors swing for the fences by gambling with hot stocks to get rich quickly. It is far more exciting to chase hot stocks in anticipation of sky-high returns than to invest in a diversified portfolio. You are also far more likely to lose your shirt when betting on finding the next Apple or Amazon. A better approach to building wealth is to adhere to a well-thought-out plan rather than swing for the fences.

Whether you are an avid Wordler or curse the day you saw yellow and green tiles flying around on social media, we have much to learn from this sleek, simple stumper.

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Kent Schmidgall, CFP^®, is a wealth advisor with Buckingham Strategic Wealth. He resides in southeast Iowa with his wife, Megan, and three children. His perfect day includes a steaming cup of coffee, a warm fire, and a Dickens novel.