Do you have a Financial Offense and Defense?

Fans, from all over, swarm to watch their favorite teams play NFL football. It’s amazing to watch high level competitors take the field and battle for the win. For a professional football team to remain a top contender on the field, they require a strong offense and defense to win. Our financial security has two sides also and without both sides we will lose in the end.

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Financial Offense

What is your money earning potential? That’s your financial offense. Most people display a pretty good offense. That means constantly achieving a higher and higher income level. Any awesome football team creates a winning strategy for their offense. With our financial offense, we need strategies too.

Offensive Strategy

Increase your income – If you have a salaried or hourly job, one of the best offense strategies is to constantly increasing your salary. For business owners, your offensive strategy is to increase and maximize the value of your time. David Bach, one of my favorite finance authors, in his book, Start Late, Finish Rich outlines a Four Week Action Plan to Get a Raise. David takes you through the steps to get a 10% raise. It works because I used it to get a raise at my customer service job. I received a 13% raise in 6 weeks by receiving a promotion. David Bach also outlines steps to increase your business by 10%. I took his advice and raise my student tuition by over 10% with almost no negative repercussions.

Create Multiple Streams of Income – Living with one source of income is a dangerous game. I set up numerous streams of revenue within my business. At one time, I relied on only student tuition as my only source of income. If tuition was down that month, I sat on the verge of financial ruin. Now, I operate with many streams. Some examples of streams of revenue for my business are tuition, retail, special events, birthday parties, drink machine. In addition, I have other ventures online through affiliate marketing, article marketing, online store sales and Adsense.

Passive Income – Any activity that you do once and profit from for a long time is Passive Income. Passive income ranges from stock and mutual fund investments, to writing articles online, and online store sales. Anything you can do once and enjoy a constant drip of income is passive.

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Financial Defense

I find that defensive money strategies are often ignored or non-existent. Defensive money strategies entail not spending everything you have so you can fund more offensive strategies. What’s the use of earning a million dollars, if you spend a million and half? This mindset results in you becoming broke the same as if you make $30,000 and spend $35,000. Wealth is not how much you make, it how much you have leftover.

Defensive Strategy

Simple Living - Make simple living your strategy for life. The fact of the matter is that the less you spend the less stress you have. These days because of the excessive impact of marketing, I find it hard to separate between needs and necessity. For necessity, we only need food, water, and shelter and everything else is fluff.

24 hour Purchase Rule - Before you buy anything ask yourself “Do I really need this?” “Would I cease to exist without this item?” If you answer No, place the item back on the shelf and wait 24 hours to think it over. Most items, you will not return to buy.

I try hard to develop both an offensive and defensive strategy. I always had a great offense but the defense took me time to develop.