As important as frugality is, we can’t save what we don’t have. And if you don’t have much coming in, then there isn’t much to work with. Also there is always going to be a limit on how much you can save. You’ll always have to buy food, water, heat etc. and because of that there will always be a limit on how much you can improve your net income through saving. A balanced approach takes into consideration all the other parts of The Money Machine. The two that have the potential to create revenue are the revenue part of the income statement (paychecks, etc) and the asset portion of the balance sheet (rentals, dividends, etc).
Maybe you are one of the lucky ones that feel like you make enough revenue but the rest of us we should have a plan for how to increase our revenue. On the income statement / monthly side this includes our paychecks. For most of us our job and paycheck is the greatest source of revenue. For myself I am working to achieve a bonus this year. I’m also thinking about ways to network and find future better job opportunities. I’m also thinking of ways I can earn extra money on the side. Maybe this blog will create a source of income in the future. Sometimes I get on elance.com and look for freelance opportunities. I’ve made several hundred dollars on jobs there. What is laying around the house that I can sell? Could I buy vending machines or any other source of passive income? Credit card rewards? Freelance writing jobs?
What about your job? Are you in a role that pays enough? If you got an MBA or other education could you make more or find a better career or job? I have friends who I KNOW could easily be making $30-50k more than they are right now. But they don’t see the opportunities or how to get there. Or sometimes they do, but they don’t want to engage in a temporary hardship or take the risk to make them a reality. As James Allen says in his wonderful short book “As a Man Thinketh”, “Men are anxious to improve their circumstances but are unwilling to improve themselves; therefore they remain bound.”
BUT don’t be lulled into thinking that revenue is your best way to improve financially. If you don’t control your spending then it will only increase when you get more money and soon you’ll be back to wondering how you can earn your way out of your spending problems.
Interestingly, most people I know of who have started focusing on their finances in a disciplined, attentive, long term way tend to increase their earnings. I don’t claim to understand all the reasons for it but I suspect they realize where every dollar is going and know that increased pay will be used wisely for long term goals. When I talked to a friend of mine that this happened to, he said that earning more was more fun because they had more to work with in the budget. More to plan with, dream with and use to get to those goals. If he didn’t have a financial plan, it would be as fun.
Also I think that people who tend to start managing their finances with more intentionality start to manage the rest of their life with that same focus and discipline. Soon that shows up in the work they do so they start earning more.
Feedback Zone: If revenue is something you want to work on, how are you going to work on it? Have you made progress in this area that you can share?