Playing Defense

Some time ago I read Kiyosaki’s Rich Dad poor Dad. It made monumental changes in my life and in the lives of my family. I learned a new way to view finances, opportunities, “the rat race,” and it even caused me to reflect on values and what success and wealth are defined as for me. My revised definition of wealth is the topic for a future blog entry. Right now I want to talk about finances.

I was reminded this morning of a great mantra that I adopted during the period of time that I was studying personal finance: “Financial independence requires playing a mix of good offense and good defense.” Playing offense is creating money – going to work, or better yet (as Kitosaki suggests) investing in assets that create passive income for you without much blood, sweat, and tears. Equally important is palying good defense – which means spending wisely. A bad defense can negate a great offense in a hurry. (For more on this, read “the Millionaire next door).

The reminder came from my wife who called me to tell me about the incredible deals she had just found at the Salvation Army store. She said that she was finding “TOP NAME BRANDS AT CRAZY LOW PRICES!” Ok – she didn’t say it that way – but it’s more fun to tell it that way. Anyhow, seriously, she was finding things that appeared to be brand new, by the same makers that sell for huge money at the mall, for small fractions of the price. A $60 pair of “Tommy” jeans like new for $4.99. A $70 Liz Caliborne something or other for 3.99. A Limited whatever for 2.99! She was thrilled – said she never wanted to shop anywhere else.

What else can we do to play good defense? For each of us it’s different. Each of us spends money wastefully on different things. I’ve decided to give up my $75/mo parking pass at work to instead park at the 50 cent lot on the other side of the highway (at least until winter). Sure I’ll have to walk a bit each day, but I can use the exercise and the $65 I’ll save. Recently we switched over to an all in one cable, phone, and internet service that will save us $35/mo. We’re also starting to use online bill payments everywhere possible to save on stamps. We’re visiting the ATM less often. We’re TRYING to eat out less. This stuff all adds up in a hurry! Thank goodness we never started with the “happy meals” – I think those things should be outlawed – and please don’t ever set foot in an Aaron’s or rent a center. I think it’s criminal what they charge people for “furniture rental.” Instead get on freecycle.com and tell folks what you need – you’d be shocked at the generosity in your own back yard (by the way, freecycle is a great way to get rid of stuff you don’t want by giving it away to someone in need who is also willing to come pick it up).

So anyway, think about your defensive game – How are you doing?

We’ll talk offense another day…