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Matching Financial Tactics to Your Goals

Last Saturday I went to the drag strip with some friends of mine. It's an annual event for us. We're a bunch of car enthusiasts who get to spend a day with some truly amazing equipment. For those of you who are not familiar with drag races here's a brief explanation. Each race is a 2 car competition to see who can cover an 1/8 or 1/4 mile in the fastest time. They both start from a standstill. An electronic signal tells them when they can go.

And then they explode off the starting line to cover the agreed distance (which is set at different legnths for different classes of cars). Huge tires spin trying to get traction. Smoke fills the air. The sound of the engines is earsplitting. An extraordinary amount of power is unleashed in just a moment. You can't help but be impressed as these cars go from a standing start to over 200 miles per hour and cover 1/4 mile in just seconds!

Dragster

There were some exceptions. Not every car was designed just to go as fast it could. Some were built with a sense of humor. For instance someone had a car that looked like a small railway engine. As you can imagine it attracted a lot of attention from the kids! I'm sure it goes fast, but that's not it's sole purpose. It was also meant to create a few smiles!

Choo Choo Train Dragster

I had a great time. Always do. But, unlike my friend, who has been a drag racer since his teens, I tend more toward classic and custom cars. Which are an entirely different breed of car. They're often restored to like new condition. Or, in the case of customs, modified into a work of art in sheetmetal. They're driven with extreme care to minimize any chance of accidents or paint chips.

One frustrating thing about a day at the drag strip is the occasional car that has an equipment failure on the track. We saw one where the differential blew up and spewed grease for 1/16 mile. It took the clean-up crew the best part of an hour to make the track safe to use again. During those cleanup times you get to swap stories with your friends and other spectators (some of the stories are even true!) or go down to the concession stand to pay for an overpriced hotdog and drink.

Sometimes in those quieter moments I tend to think of how life illustrates our finances. This happened to be one of those cases.

It occurred to me that just as dragsters and classic cars are different and well-suited to their purpose, so should our financial tools and methods be chosen for the goal we want to achive. Let me try to draw an analogy that makes sense.

You'd be foolish to take a classic car that took years and many dollars to restore and run it on the drag strip. One trip could ruin paint you spent hours polishing or break parts that you can't replace. That classic car's purpose isn't to go fast. If your goal was to go fast you'd be much better off to use a dragster. It is designed to accomplish your purpose.

The same thing is true of our finances. We need to know what our goal is before we decide which method to use. Take, for instance, our desire to get out of debt. We'd like to use a dragster to solve the problem. A quick burst of effort and the whole deal is over quickly. But, conquering debt doesn't work that way. Chances are we built up the debt over years and years. We're not going to get rid of it overnight. It's going to take a longer, more dedicated effort to keep on repaying past debts for months and even years. More like our classic cruiser than the dragster.

We'll need tools that can help us select which debt to pay first. Ways to keep track of what progress we're making month by month. Even some rewards as we hit the quarter and half-way point to keep us motivated to continue pushing to our goal of being debt-free. 

Just like the cars, we need to be tuned differently too. We all know someone who starts a financial program with a lot of tire smoke. And they travel the first quarter mile quickly. But then they lose interest and don't make any real progress towards their goal.

It's not how much enthusiasm we bring to the starting line that counts. Rather it's the determination to continue to journey even when it's tough to go on. When events make it hard to stay the course.

On the other hand our goal may be to get the best deal possible on a new refrigerator. This time we need to select tools and techniques that will help us right now. Knowing where to find reviews, looking for discounts and brushing up on how to negotiate are all immediate activities. This time the amount of energy we bring to the task today is really important. Much like the dragster taking off. A cruiser will not get the job done. We need our tools to work together right now.

So as we set financial goals, both now and as part of New Year's resolutions, don't forget to make sure that you're driving the right financial tool or technique. Failure to get this right could leave you standing along the money highway waiting for a tow truck!

Keep on Stretching those Dollars!

Gary 

 

 

 

 

 

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December 7, 2011 9:01 AM
 

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About Gary

For more than 25 years, Gary Foreman has worked to manage money effectively. Prior to starting The Dollar Stretcher, he was a financial planner and purchasing manager. While helping clients manage their hard earned money as a financial planner, he applied commonsense, time-tested techniques during the turbulent 1980’s. The experience convinced him that you didn’t need to hit the lottery to accumulate significant wealth. Following that, Gary had an opportunity to learn more about how to get the best value for a dollar spent in the corporate world. As the Purchasing Manager for a computer manufacturer, he was responsible for supervising over $10 million in annual purchases. Gary began The Dollar Stretcher website <www.TheDollarStretcher.com> and newsletters in April 1996. Over 300,000 readers benefit from the time and money saving ideas presented in The Dollar Stretcher newsletters each week. His mission is to help people "Live Better for Less". He also provides private label newsletters for companies wishing to provide money saving information for their clients and/or prospects. Gary lives in Florida along with his wife of thirty years and their two children. Much of his time is spent working with the men's ministry of his church. One of their ongoing projects is the "Holy Smoke BBQ" which sells bbq on Friday nights with the profits going to support local foster kids and orphans. When he has a free moment you’ll find him restoring a Checker station wagon nicknamed “Two Ton” or cruising in a '65 Impala SS Convertible with doo-wops playing in the background.

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Gary is a former financial planner and purchasing manager who edits The Dollar Stretcher website <www.stretcher.com> and newsletters. You can follow Gary on Twitter.com/gary_foreman
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