One of the most popular mantras for financial success is to simply live within your means. For most people, living within your means often means spending less than you earn and therefore watching your spending and finding ways to be frugal.
The flip side to spending less than you earn is to make more than you spend. This twist puts the emphasis on the income side of the strategy instead of the spending side. Although cutting expenses is a reasonable strategy, you can only cut expenses so far . . . theoretically down to $0. Increasing your income is potentially unlimited. In one of my interviews with Frugal Trader from Million Dollar Journey, he said “it’s all about the cashflow and the more you have, the easier it is to reach your financial goals.”
Does higher income equal more wealth?
According to the book, The Millionaire Next Door by William Danko and Thomas Stanley, there is a positive relationship between wealth and income, “Yes, higher-income households tend to have more wealth than lower- and middle-income households.”
So the solution is simple – just make more money. Unfortunately that’s easier said than done but at the same time, it’s far from impossible. Too many people take the path of least resistance, lack work ethic and some people are just plain lazy.
Making more money may be simple but it’s not necessarily easy. The opportunities are there. You just have to want it bad enough. If you are feeling like making more money may be an opportunity you want to explore, here’s a list of some examples of things you can brainstorm and try.
- Work part time
- Get more education
- Change jobs
- Get a promotion
- Work overtime
- Sell thing you don’t need or use
- Have a garage sale
- Sell some big items on ebay or Kijiji
- Turn a hobby into a business
- Create income from your investments
- Turn your bank into a profit center
- Rent out a room in your house
- Take in foreign exchange students
- Clear your house and look for money
- Roll your loose change
- Enter some contests
- Work harder
This list is far from complete. Can you think of other ways to generate cashflow?
Despite this strong correlation, the key to financial success is not just how much money you make but what you do with it that really counts. What really matters is how much of that income is saved.