The Oakland A’s were rich. Well, at first base, at least.

Technically, they were the second-poorest team in baseball, with a payroll of $34 million. By contrast, the New York Yankees’ payroll exceeded $112 million.

But at first base, the A’s had Jason Giambi.

During the 2000 season, Giambi was named the American League’s (AL) Most Valuable Player. The following year, his on-base percentage reached .477, the highest in the league and well-above average.

“He was a machine for creating runs,” Michael Lewis writes in Moneyball, “one of the most efficient offensive players in the game.”

And after the 2001 playoffs, the Oakland A’s let Jason Giambi leave.

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Baseball fans in Oakland wondered, “Why the hell did they let Jason Giambi leave?” 

Yet, the phrase “let Jason Giambi leave” doesn’t fully convey what actually happened. In reality, the A’s never had that much control over the situation.

As Lewis writes, “The A’s front office realized right away, of course, that they couldn’t replace Jason Giambi with another first baseman just like him. There wasn’t another first baseman just like him and if there were, they couldn’t have afforded him ….”

Oakland fans, instead, should have focused on how the A’s responded to these circumstances. But even the team’s own scouts misunderstood the dynamics at play.

In the film version of Moneyball, A’s general manager Billy Beane asks one of the scouts, “What’s the problem [here]?” The scout then replies, “We’ve got 38 home runs to replace, 120 RBIs, 47 doubles…” The scouts assumed that the team’s future success hinged on finding a nearly-exact replacement for Jason Giambi.

In response, Beane demands, “Is there another first baseman like Giambi?” The scouts gathered in the room all mumble, “No.” So, Beane says, “Then stop looking for one.”

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Billy Beane, along with his deputy, Paul DePodesta, asked a different question than the fans. They wondered, “Why does it matter that we let Jason Giambi leave?”

They didn’t seek to fix their Jason Giambi deficiency with a Jason Giambi-like solution. “The important thing is not to recreate the individual,” Billy Beane would later remark in Moneyball. “The important thing is to recreate the aggregate.”

“He couldn’t and wouldn’t find another Jason Giambi,” Lewis writes, “But he could find the pieces of Giambi he could least afford to be without ….”

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Khe Hy’s podcast, The Examined Life, recently explained how a similar situation plays out with our money. His guest, Adam Katz, offered an example:

“If you’re going on a vacation where the resort and all the food cost $15,000 and your flights cost $1,000, then it’s a $16,000 vacation. But if instead, you found the resort and the food for $12,000 and you wanted to fly first-class for $4,000, it’s still a $16,000 vacation.

For some reason, though, you struggle with the 300% change, [the flight] going from $1,000 to $4,000. It’s still the same dollars… but you’ve decided to give them more or less value because you’ve put them over a different denominator.”

Katz then shares a personal anecdote with a similar thought process:

“So this really cool ice cream shop opened up in our town… and I started hearing people being like, ‘I’m not going there. The ice cream cones are like 50% more than at other places.’

I’m like, ‘Oh, how much are the ice cream cones?’ And they say $6. So I said, ‘OK, how many of those do you think you’re going to have this summer?’ People say about 10. I said, ‘OK, so for like $20-$25 each summer, you don’t want to have the right to have a better ice cream cone.’“

Katz wonders, “Would you notice the $25 in a vacation budget, in a car budget, in a house budget?” No. In fact, he points out, your home-buying process very likely would include negotiating in increments of $25,000-$50,000.

A drop of water, as Katz likes to say, is always water. No matter whether it’s added to water in a thimble, in a glass, or in a bathtub.

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Like Oakland baseball fans, many of us have a Jason Giambi obsession in our financial lives.

The most common example may involve our 401(k) at work. It’s powerful. It plays a central role in our long-term financial outlook. And we treat it as an irreplaceable part of our finances.

But at times, we may struggle to contribute much to our 401(k). Or, alternatively, we may hit the max contribution limit and wonder what comes next. In either case, we react like Jason Giambi just abandoned our team. What are we going to do now?

But we’re misunderstanding the dynamics at play.

We only have so much control over the situation. And we fail to appreciate that we still can succeed financially in the aggregate. Our retirement doesn’t depend solely on our 401(k) balance. We also can win through brokerage account investments, social security income, reduced spending, and/or part-time work.

We still can find the pieces we need to retire comfortably, with long-term financial stability.

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Scott Hatteberg was one of three players the Oakland A’s signed to collectively replace Jason Giambi.

No one in Major League Baseball had thought much about Scott Hatteberg recently. After surgery to repair a ruptured nerve in his elbow, Hatteberg couldn’t throw a baseball. He couldn’t even hold one.

“Hatty had some power,” Michael Lewis writes, “But what he really had was an approach to hitting that helped an offense create runs. When he was with the Red Sox, he had gotten on base at a rate about 25 points higher than the league average…”

And during that next 2002 season, Hatteberg would finish:

• 4th in the AL in walk-to-strikeout ratio
• 3rd in the AL in pitches seen per plate appearance; and
• 13th in the AL in on-base percentage.

The Oakland A’s won 103 games that year, one more than they won the previous season with Jason Giambi.

The A’s lineup may have looked different, less conventional. But in the aggregate, they were exactly where they need to be.

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About the author: Kevin Mahoney, CFP®

Hi, I’m Kevin. I’m a financial advisor in Washington, DC. I’m also the founder of Illumint, an independent financial planning company in the District that specializes in financial planning for Millennials like you. I empower our generation with the confidence to invest an inheritance, financial gift, or extra savings. If you’re new to Financially Well, welcome – you now have access to the leading finance podcast for Millennials. I encourage you to read, watch, or listen to the ideas I’ve shared about making your money work for you. And then when you’re ready, please send me your thoughts & questions!