The title of this post is very timely. My beloved Seattle Seahawks will be fighting for the NFC West title tonight and I'm fortunate enough to have tickets to the game. I'm a huge sports fan and have always thought that many life lessons can be learned through sports. My brother told me this saying when we were kids that I've always remembered, "Offense sells tickets, Defense wins championships!". That phrase holds so true in all sports and I've applied it towards my fight against debt as well. This is a championship I'm confident I will win, now that we have a solid game plan.
As you could probably guess, offense refers to the money you are taking in while defense is associated with the cash you spend. The most common form of offense is your salary or salaries, if you are a duel income family. But think about all forms of income: dividends, stock appreciation, rental income, money from side businesses, etc... That's your total offense. If you're not excited about your current offensive position, there's many things you can do about it. Get a promotion with a raise, find a higher paying job, start up a side business, etc... But you already know this. If you're like me, you constantly think of ways to make more money. After all, this is the part of the game that "sells tickets."
This is the side that the outside world knows about. One of the first questions out of people's mouth when they are meeting someone for the first time or getting together with someone they haven't seen in forever, is "What do you do?" Now, I'm pretty sure the first thought that pops into your head for a response is your job or business. So, right away, the person who asks the question formulates their opinion about your offensive position. For example, if you say you're a teacher, they immediately think you're poor. Conversely, if you say anything about a techie position, they assume you're rich. You get the picture, doctors/lawyers/airline pilots = rich while janitors/waiters/hairdressers = poor. There's no wonder why our focus is on the offense.
But the real key to victory is defense; it's what championships are built on. Unfortunately, it's also the part of the game that truly takes the most work. Moreover, it's dirty work that no one gets credit for. How many times have you been at a party and someone asks you "How much were you under budget last month?" I can pretty confidently say that's happened zero times in my life. It's the part of the game that no one knows about in detail. All they know is what you show them and therein lies the biggest problem of this part of the game. No one ever shares their cash flow statement. In other words, people don't know how much you spend on the day-to-day things in your lives. What people do know is the "stuff" you have that is visible for the whole world to see. For example, people know the size of your house and the make/model of your cars. And guess what, they formulate opinions of your wealth based on those as well. However, and this is the crazy part, people don't think of those purchases as defensive let downs. They actually think of those as offensive accomplishments. In other words, people's natural reaction is to assume you're able to afford everything you have as opposed to question the amount of debt it took to procure the items. This further complicates your ability to excel at the defensive end. Not only do you have to minimize your spending habits to win the game but you have to deal with the perception others have of you while trying to win. This is the phenomenon called "keeping up with the Joneses".
Bottom line, creating a winning defense is vital to being debt free. I'll even put it this way, you can be debt free with an amazingly strong defense no matter what kind of offense you have. However, the same does not hold true the other way. Specifically, you can have the best offense around but continue to be in debt if you don't pay attention to your defensive needs.
In future posts, I'll start going into details on the "hows" of getting started on this journey. But I first wanted to lay down concepts and give everyone background as to my own situation. Again, I'm no expert, but I can tell you from my own experience what has worked and what hasn't. And because I'm living the journey, my perspective will be practical not theoretical.
By the way, GO SEAHAWKS!!!!
As you could probably guess, offense refers to the money you are taking in while defense is associated with the cash you spend. The most common form of offense is your salary or salaries, if you are a duel income family. But think about all forms of income: dividends, stock appreciation, rental income, money from side businesses, etc... That's your total offense. If you're not excited about your current offensive position, there's many things you can do about it. Get a promotion with a raise, find a higher paying job, start up a side business, etc... But you already know this. If you're like me, you constantly think of ways to make more money. After all, this is the part of the game that "sells tickets."
This is the side that the outside world knows about. One of the first questions out of people's mouth when they are meeting someone for the first time or getting together with someone they haven't seen in forever, is "What do you do?" Now, I'm pretty sure the first thought that pops into your head for a response is your job or business. So, right away, the person who asks the question formulates their opinion about your offensive position. For example, if you say you're a teacher, they immediately think you're poor. Conversely, if you say anything about a techie position, they assume you're rich. You get the picture, doctors/lawyers/airline pilots = rich while janitors/waiters/hairdressers = poor. There's no wonder why our focus is on the offense.
But the real key to victory is defense; it's what championships are built on. Unfortunately, it's also the part of the game that truly takes the most work. Moreover, it's dirty work that no one gets credit for. How many times have you been at a party and someone asks you "How much were you under budget last month?" I can pretty confidently say that's happened zero times in my life. It's the part of the game that no one knows about in detail. All they know is what you show them and therein lies the biggest problem of this part of the game. No one ever shares their cash flow statement. In other words, people don't know how much you spend on the day-to-day things in your lives. What people do know is the "stuff" you have that is visible for the whole world to see. For example, people know the size of your house and the make/model of your cars. And guess what, they formulate opinions of your wealth based on those as well. However, and this is the crazy part, people don't think of those purchases as defensive let downs. They actually think of those as offensive accomplishments. In other words, people's natural reaction is to assume you're able to afford everything you have as opposed to question the amount of debt it took to procure the items. This further complicates your ability to excel at the defensive end. Not only do you have to minimize your spending habits to win the game but you have to deal with the perception others have of you while trying to win. This is the phenomenon called "keeping up with the Joneses".
Bottom line, creating a winning defense is vital to being debt free. I'll even put it this way, you can be debt free with an amazingly strong defense no matter what kind of offense you have. However, the same does not hold true the other way. Specifically, you can have the best offense around but continue to be in debt if you don't pay attention to your defensive needs.
In future posts, I'll start going into details on the "hows" of getting started on this journey. But I first wanted to lay down concepts and give everyone background as to my own situation. Again, I'm no expert, but I can tell you from my own experience what has worked and what hasn't. And because I'm living the journey, my perspective will be practical not theoretical.
By the way, GO SEAHAWKS!!!!
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