Best Defense Is A Good Offense

I saw an ad in the paper that headlined, “Your income is fixed, so your expenses should be fixed.” It was an ad for a seniors living community as it called itself. My first impression was that these people will be led to financial disaster if they depend upon this idea.

A fixed income is a bad idea at any age. I can tell you from experience, your expenses will never be fixed. People on a fixed income spend a lot of time trying to minimize their expenses to fit within their means. All it takes is an unexpected medical bill, furnace bill, auto repair, etc. to swamp their efforts.

Minimizing your expenses is a good defense, but as any sports fan can tell you, defense doesn’t put points on the board. (Some people will argue about scoring on interceptions, my reply is that the instant the ball is interecepted, they become the offense.) You can have the best defense in the world and keep the other team scoreless, but, unless you have an offense good enough to score, the best you can hope for is a zero to zero tie.

The best winning strategy is to reasonably reduce your expenses to the minimum and concentrate on increasing your income. Create multiple streams of income, preferably residual income. As your offense gets better and better, your defense becomes less important.

The current state of economic times are being looked at as terrible. That’s the view of some whose offense isn’t that good. For someone with a great offense, it’s a buyer’s market. Assets can be purchased cheaper and expenses can be reduced and or more value can be purchased for the same amount.

I am reminded of the late 70’s and early 80’s when interest was very high. Mortgages were going for over 12%. Most people looked at that and thought it was bad because they were paying it. Those that collected it looked upon it as a good thing. Half full or half empty often depends on which side of the bar you are on.

Remember, the best defence is a good offense.