Winning Financial Strategy Combines Strong Offense and Defense

Rick KahlerAdvisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.

Thirty years ago, jogging with a friend, I told him about the difficult time I was having financially. Even though my business’s earnings were very good, the profitability wasn’t where it needed to be. After listening to me for several miles, he said something I’ve never forgotten. “Rick, you have a great financial offense, but your defense is lousy.”

It was true. My strong financial offense came from being in a business where I was able to make money. If times were difficult, I could increase my marketing efforts and bring in more. Yet my weak defense was failing to control leakage in my revenue from attending workshops, high labor costs, and poor tax planning. This meant I lacked capital for other important expenses like funding retirement plans, maintenance, and having adequate savings for large expenses like taxes, vacations, and purchasing vehicles.

In football terms, my offense was comparable to that of the 2023 Kansas City Chiefs, whose ranking of 9th in the NFL offensively was good enough to get them to the Super Bowl and a championship. My defense, however, was on par with the near bottom 29th place ranking of the 2023 Denver Broncos.