Spain is Soccer World Cup 2010 Champion. Analysts say that is because of their mental strength, their wily forwards, a strong defence and the hardworking midfield.

Important: Do remember that what the analyst say is on the basis of hindsight of course. Spain was pilloried for losing their first match by the same analysts! This article is about what you can learn from the game of soccer and apply to your own personal finances!

 Apart from the mental strength, which is invisible, what's visible on the field are three important components.
1. Forwards, to score the goals.
2. Midfielders, to control the game.
3. Defenders, to save, not leak goals.

I know you have this idea that I would be comparing soccer with Personal Finance. Here it is.

Personal Finance has three important components too.
1. Investing, to get more bang on your money.
2. Maximizing your income, to control the game of money.
3. Frugality, to save and not leak money.

And yes, you also need to have that mental strength not to be dragged down by "fear and greed". And keep coming back even after failure.

In any case, personal finance is not just about investing. It's also about optimizing your expenses as well as maximizing your income.

I talk to a lot of people on managing money and I can classify them in three categories.

1. I know how to manage money. I save a lot. I have kept it safe and have put all my money with Bank FDs.

2. I know how to manage my money. It's all about making more and more money. If I have a good income, everything else will be okay.

3. I know how to manage my money. I focus on investing my money in equity which is the best asset class. I focus on maximizing my money.

All of them know that they are managing it well. Infact, they are. But doing one component of it very well does not complete the entire task of managing your money.

Coming back to soccer, a team may say that they have excellent forwards. Like Lionel Messi. But their defenders leak goals. Or the midfield isn't able to control the game. That's what happened to Argentina, I guess.

As an aside, when I tell my son (who plays as a forward) that I played as a defender in school, he frowns. He says, "What does the defender do? The real work is done by the forwards".

My son is less than 16 years old and can be excused. But what about us grown ups? Who think investing is personal finance. Or saving money is personal finance. Or, increasing our income (legally) is personal finance.

Defending, controlling the midfield and attacking relentlessly is what makes a Soccer Champion. So if you want to be a Personal Finance champion, you need to take care of your investing, savings as well as maximize your income.

What do you say? Do share your own perspectives. Thanks.