5 Reasons Why Extra Income Is FAR More Powerful Than Frugality

Extra Income

It’s virtually impossible to “frugal” your way to becoming rich.

Sure, if you scrimp and save and avoid enjoying all the pleasures in life, you can save a few extra percent of your income every month, maybe as much as 20% if you take it to the extreme, but is that really how you want to live your life?

Most of the so called “experts” on personal finance focus on cutting costs, but that’s only one half of the equation, and it is the one that has sever limitations as well.

Even if you start pinching every single penny, you are going to be hard pressed to cut your expenses by more than a few percent from where they are today, unless you undertake a drastic lifestyle change, which if you’re honest with yourself isn’t realistic. It is virtually impossible to take a step backward in lifestyle. Once you have achieved a certain level, you want to maintain that level as a bare minimum, even if it puts you into financial jeopardy.

It takes a lot of $5 latte’s and $15 lunches out to add up to even 1% of your income. To make the math easy, say you are making $52,000 a year or $1,000 per week in income.

If you were to cut out 2 of your $5 latte’s every single week, that only adds up to 1% of your income, and you loose out on the pleasure you experience from the latte’s.

Me personally, I’m not a coffee drinker, so I’m already spending $0 on that line item, but my wife on the other hand would probably die without her trips to Startbuck’s and Einstein’s etc.

In an extreme case, you might be able to temporarily cut your spending further than the level it is at today, but lets face reality, there is pretty much no way that you are going to be able to make a significant change in your finances just by cutting a few percent off of your expenses, even if you can make those cuts stick on a semi-permanent basis.

The other side of the equation is extra income, and earning extra money is a far more powerful strategy than cutting expense.

There are various ways to put away more money for saving and investing and reaching your financial goals.

The 5 Reasons Why Earning More Is FAR More Powerful Than Frugality:

    1. Cutting Expenses is Limited – You can only cut so far and then you are out of options to reduce your expenses.
    2. Growing Your Income is Unlimited – There is always higher up you can climb, or more side income you can generate.
    3. Diversify Your Risk – When 100% of your income is coming from a single source, you are putting all your eggs in one basket and are taking a huge risk. What happens if your company goes belly up or you get laid off or you get fed up and quit? – If you are earning something on the side, at least you won’t be down to $0 income.
    4. Start with $500 or $1,000 Then Scale – It is significantly easier to start earning an extra $500 or $1,000 at a time, or per month, and learning how to make that work. Then you can easily grow that once you get further down the road. You shouldn’t try to go straight to earning an extra $10,000 or $20,000 per month, because psychologically it is almost impossible for your mind to get there starting from $0.
    5. A Combination of 1-4 Above – You can review your spending to see if there is anything you want to cut out, but you definitely need to add a side income. Start small, something that will bring in a little extra cash, maybe $500 a month and then grow it from there. That way you are diversifying and not putting all your eggs in one basket.

Earning More puts you in the drivers seat. You gain control over you financial life and ar no longer totally at the mercy of your current employer.

If you are interested in learning more about how to earn extra money, a side income, then Please check out a Free webinar that I have scheduled where you will learn the best way to start earning a some extra cash.

This webinar will change your financial life, and the lifestyle you are able to live not only now, but in your retirement as well.

Click here to register, and don’t forget to tell all your friends about it via the social share icons below. You know that some of them could use this information even more than you can.

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