How To Maximize Your Income
HOW TO MAXIMIZE YOUR INCOME
The Preface
I’ve recently discovered this video which gave me a new perspective about saving money with an emphasis on why you should maximize your income. This video is less than a minute so I would highly advise watching it.
Andrew mentioned that there is a limit to how much you can save but there is no limit to how much you can earn. You can only save as much as you make but if you increase your income your ability to save can become unlimited. He emphasized focusing not on income minimization through saving but income maximization through earning more.
With income maximization comes great responsibility though. When a lot of people get raises for instance, they increase their cost of living by buying something bigger and better because they can afford it. But this is defeating the purpose of frugality. Just because you can afford something doesn’t mean you need the latest and greatest of everything. If this cycle repeats itself, it would be almost as if there were no raise to begin with. Basically you would be spending that raise on your lifestyle upgrade to compensate for the financial increase. This puts you back at square one. It is smart to keep the same standard of living or, if upgrading, not to go crazy in your spending habits. This way you will not only save money but maximize your income.
Everything Is Circumstantial
Another thing that is noteworthy to mention is moving to a lower cost of living area due to income restrictions. Everyone has different circumstances so this should be taken with a grain of salt.
I met someone who had the mentality of “I can get more for my money on the salary I am making by moving to [insert lower cost of living state here] because everything is cheaper there”. Although this may be true, this does not fix the root of the issue – income. As someone who works in IT, there is something called a root cause. Knowing the root cause of an issue is important. You can’t always run from a bad income and a lower cost of living state will only help you save more but it will not increase your base income. This person basically assumed they would be stuck at this income forever. A better mentality would be “I need to focus on how I can increase my income while at the same time reducing my spending (saving) to kill two birds with one stone”. It may be a smart move to live in a lower cost of living area even when increasing income because why spend more if you do not have to? Granted, moving to a lower cost of living area may not be feasible for everyone for various reasons whether it is because of needing to be close to family or job prospects but it is a thought for consideration.
Ways To Maximize Your Income
So, how can you maximize your income? A few ways are through having good work ethic (reputation), continuing education (certifications), and voicing your desire for a promotion. This makes you more valuable to your employer because you are not only marketing yourself but you are increasing your value. Changing companies and/or fields may also be an option. You could become an entrepreneur and start your own online business (since the internet is at our disposal) based on something you are good at and have a passion for since everyone has a gift. An online business can reduce your capital expenses because there is no brick and mortar or tangibility to worry about. Side hustles are also popular and the type would be dependent on your personal interests. I emphasize having a passion about these things because that is the only way that you will stick with it, produce quality content, and desire it. As I mentioned in a previous post, “the secret is to always stay below the point where it feels like work” – James Clear.