What Mahjong Taught Me About Investing

Mahjong is everywhere. It has become the new book club, the new girls’ night, maybe even the new pickleball.

Yelp found that searches for mahjong clubs jumped 4,467%, while searches for mahjong lessons rose 819% over the last year.

I love playing, even though I’ve lost far more games than I’ve won. Mahjong is part skill and part luck, so sometimes you can make a good decision and still lose the hand. Once I understood that, I became a much better loser.

The more I play, the more I notice how much the game has in common with the way we make financial decisions. You’re practicing more financial skills around a mahjong table than you might realize.

This week:

In Mahjong, a tile is only valuable if it helps the hand you are trying to complete.

Investments work the same way.

We often ask, “Is this a good investment?”

A better question is, “Does this fit what I’m building?”

Before looking at the return, ask what job you need the money to do: grow, produce income, stay accessible, or reduce concentration. Another rental may look attractive, but not if most of your net worth is already in real estate. Cash may earn less, but if you need flexibility in the next few years, it may be the better fit.

The investment may be perfectly good. It just may not fit your hand.

In Mahjong, you often keep more than one possible hand alive so you can change direction if the tiles do not come the way you expected.

That is a useful way to think about diversification.

Diversification is not about owning more things. It is about making sure your financial plan has more than one way to work.

If your income, investments and home value are all tied to the same industry or market, you may be less diversified than the number of accounts you own suggests.

Ask yourself: If this part of my plan disappoints me, what else is still working for me?

When I first started playing, I mostly stared at my own rack. “What do I have? What do I need?”.

Now I’m paying a lot more attention to the table. I’m tile counting. I’m watching what’s already been discarded and what other people have exposed.

My rack tells me what I have. The table tells me what is still possible.

And sometimes that means the hand I started with just isn’t the hand I should keep chasing.

Money decisions can work the same way. You may have bought an investment for a very specific reason. If that reason changes, it’s worth looking at it again.

I like two simple questions:

A bad outcome does not always mean you made a bad decision. Sometimes luck just went the other way.

I’m still losing more than I’m winning, but I’m reading the table faster and trusting my own judgment more. That’s a lot like financial confidence: not always a better outcome, but a better read.