Coach PK: "If we hold them to negative points we can win this championship!"
"Offense Wins Games... Defense Wins Championships" - Horrible Quote.
I don't know who said it originally... but I always hated that quote. In my mind, if you win every game with a strong offense, what difference does defense make? If your defense is good enough for your offense to prevail, well, then you'll prevail.
On that note, I have more than half a million dollars in debt and I only pay the minimum payments.
Sports, Life, and Finances
As you probably know from reading the 'About' page on this site, all of the writers on this site are huge Patriots fans. The Patriots just happened to play in the 2012 Super Bowl. If you asked me, "PK, who won the Super Bowl?" and I answered "The Patriots gave up 21 points," you'd probably say, "you're not giving me the full picture". Absurd, right? Yet every day we read stories from Debt Bloggers which only tell half the story. (For the record - the Patriots only scored 17 points.)
That's right - as the second most prolific writer on this site recently reminded you, Personal Finance is a holistic look at all types of financial matters as they relate to your life. We may argue light-heartedly about the meaning of 'savings', but we agree that Personal Finance boils down to four things:
- Inflows
- Outflows
- Assets
- Debt
All four topics are also closely linked. If offense outweighs defense? You'll quickly gain assets. If the reverse is true? Debt is soon to come. However, note the unique position of defense on the board - even if you have perfect defense (outflows are zero) you won't necessarily gain assets. Only inflows can lead to assets... defense can only cover up for poor offense, yet it can never replace it.
There are altogether too many blogs which concentrate on one of the four categories - Debt. You see, I categorized the four topics as I did to group them by function. Inflows and outflows are a measure of how well your offense and defense are currently performing - roughly, "are you bringing in more money than you are spending?". Assets and Debts are 'total scores', sort of like a scoreboard at the game (if teams could lose points).
The Perils of Listening to Yes-Men
Hopefully you understand the point I'm trying to make. These debt blogs which have become so popular... are dedicated to the singular obsession of paying down debt, even when record low rates (on student, real estate, and car loans - I'm not talking about your 20% APR credit card) suggest you should invest your money elsewhere. Worse, people who try to talk about inflows and outflows - such as suggesting to heavily indebted people new ways to earn money, or telling those same people to think twice about exotic vacations - are shouted down, proving that collective obsessional behavior is still with us. Any mention of increasing assets? Sacrilegious!
If you want to hold yourself accountable for your past mistakes, you need to encourage dissent on your site and actively welcome dissenting viewpoints. Grooming a bunch of like minding sycophants achieves one thing - attracting people to your site who think like you. The problem with that? Thinking like you got you into the mess. If you just want to write to inspire yourself to think without the hassle of smart dissenters, there is already a medium that supports that. It's called a 'diary'.
I'll Take a Strong Offense
In the Bay Area we have an ironic saying about a million dollars - it's "not a lot of money". Extending the snark, people at my favorite Bay Area real estate blog like to call $500,000 "half of not a lot of money". Sarcasm aside, telling you that I've got a lot of debt only tells half the story.
Here's the rest of the story: If the game ended today, I'd win.
Are you only worried about one of the four pillars of Personal Finance? Have you observed group-think dominating the discussion on what should be easily solvable issues? Do you focus too much on paying down your debt to the detriment of other aspects of your finances?
