Mastering the basics
- Mike Brown
- Feb 5
- 3 min read
The “Packers Sweep” is considered one of the most famous plays in football history.
Introduced more than half a century ago by legendary Green Bay Packers head coach Vince Lombardi, the Packers Sweep was simple to run and nearly impossible to defend. Legend even has it that Lombardi’s players were so confident in the play they would occasionally tip off their opponents: “Here comes the Sweep, boys!”
Two things made the Packers Sweep effective: simplicity of design and consistency of execution. Perfecting it, however, required the players to (1) master the essential basics of the play, (2) maintain an unquestionable faith that it would work, and then (3) have the discipline to keep running it even when occasionally it resulted in a loss of ground.
Despite all the complex theories, fancy formulas, and confusing jargon, successful investing can work the same way. The basics usually don’t change. By first understanding a handful of simple financial concepts that have historically worked for more than a century – and then executing them through each phase of your life – you may have the potential for your own version of the Packers Sweep:
Start creating wealth with your first paycheck by persistently living on less than you earn.
Build a cash reserve to help defend you against unforeseen financial emergencies.
Give every dollar you save a job to do. Invest each dollar based on when you will need access to it in the future.
Keep investing through good times and bad. Use dollar-cost averaging to turn market volatility into a competitive advantage. Keep running the play regardless of how the game seems to be going, whether you’re ahead or behind.*
Avoid the temptation of trying to outsmart the game. Understand that the only way to enjoy the impressive long-term return of equities has been to stay invested regardless of market conditions.
As you approach retirement, increase your reserve to cover what you plan to spend during the first five years of retirement. Keep this money out of equities, so that you won’t be forced to sell stocks – at possibly the worst possible times – to pay your bills. Remember, stocks are no place to keep the rent money.
Focus on investments that pay income that increases faster than the rate of inflation over time. That means owning shares of high-quality companies that pay rising dividends. Your expenses will increase for the rest of your life – shouldn’t your income?
Teach these simple lessons to your kids and grandkids. Regardless of how much wealth you decide to leave them, there’s no limit to the wisdom you can bestow on the people you care about. Let them prosper from the lessons you’ve learned.
The genius of Vince Lombardi’s system was its simplicity – learning the fundamental rules of the game, one at a time, and endlessly practicing the basics until they became instinctual. Using that system, the Packers dominated the National Football League in its early years.
They may never name a championship trophy after you, but financial independence is its own reward – and one worth seeking.
Any opinions are those of Mike Brown and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Past performance is not a guarantee of future results. Investing involves risk and you may incur a profit or loss regardless of strategy selected, including asset allocation and diversification.
*Dollar-cost averaging cannot guarantee a profit or protect against a loss, and you should consider your financial ability to continue purchases through periods of low price levels.
