Getting Back to Basics
November 08, 2013I grew up playing sports almost year-round. When I was 6, I started playing football. I played some sport competitively all the way through college and for many years afterward. (I’m currently debating whether or not to become a referee in a local youth rugby league so that I can still get out there and run around a field, but not wake up stiff and sore from being tackled.)
One of the traditions that has been a part of my sports life has been the post-game handshake. During a rugby game, my opposite number (the player on the other team playing the same position, we usually spend 80% of the game within 5 feet of each other) and I will do everything we can to break each other’s will to play, within the rules. But, as soon as the whistle blows to end the game, we shake hands, congratulate each other for a well-played game and will often have a beverage or two together afterward. Some of my friends today are guys that have spent Saturday afternoons inflicting pain on me and me on them.
So when I read this article about post-game handshakes being banned by some schools because of fights breaking out, I was very disappointed. It seems as though good sportsmanship isn’t a universal concept. I run the risk of sounding like my grandfather here, but I’m longing for the “good old days” after reading that. Those days included good sportsmanship, a government that wasn’t in constant crisis mode and people (and companies and governments) that lived on a cash basis more than a credit basis.
Maybe I’m just being nostalgic, but our culture has shifted into a far more consumerism-driven culture than I recall it being when I was much younger. (Oh, my kids will love that line….) That can be a good thing for the stock market. As companies sell more goods and services, presumably their profits rise as does their stock price. And, since most of us have 401k’s and invest in the stock market through them, it can be a good thing for our financial futures.
But it has led to an amazing amount of debt in the U.S. as well. Our national debt is at ~$17 trillion, with another $60 trillion in spending promises that are currently unfunded. Student loan debt has topped the $1 trillion mark. Credit card debt is over $850 billion. Total US consumer debt is over $3 trillion.
We are living in a time when living with lots of debt might be considered “The American Way.” After talking with countless people who start a conversation with how stressed they are about their finances, how it’s impacting their emotional health and having a spillover effect into their physical health, I have come to a not so startling conclusion: debt is ruinous! (at least at high levels)
I have had the opportunity to work with people who were given the chance to accept an early retirement package from their employer. The package was rather generous but they had to make a decision in a rather short window of time. In that window, I spent almost all day, every day, having conversations with people contemplating retirement. Or, if not retirement, leaving that company in hopes of finding another job in this not-so-awesome economy.
Looking back at those who were able to accept the package vs. those who couldn’t, there was one major deciding factor: their level of debt and the associated monthly cash flow needed to service that debt. I’m not saying that all debt is bad. I’ve had student loans and mortgages and have used credit cards in my life. But, for the best long term financial positioning, it would be a great idea to limit debt during your early and mid career stages and work toward eliminating it in the latter part of your career.
None of us is guaranteed a job for life (unless one of the Supreme Court Justices is reading this) and in this economy, maybe it’s time to go back to some of the “old school” financial basics. Limit your spending. Don’t accumulate more debt than you can pay off quickly. Have a plan to be debt-free prior to retirement.
In sports and in your financial life, getting back to the basics is usually a very good thing. After all, they’re called the basics for a reason! It may not be a revolutionary concept, but then again neither is smiling and shaking the hand of your opponent after a game.