We always heard that a penny saved is a penny earned but the secret to riches and financial success is much more than just saving a penny here and there. The best ever article I wrote on the subject is still among my top 10 most read posts every day, how to be rich? By creating value. That’s the easiest formula toward riches. We need to create value and thereby we increase our income. If we want to maintain a good lifestyle without hurting the savings and at the same time having piece of mind.
Let us imagine that you skip your beloved latte in the morning. How much do you really save in a month? Depending on how much you drink and the brand you purchase, you may save between 30$ and 60$ every month. That is a nice amount of money but not really enough to improve your lifestyle or make your retirement more comfortable. Actually skipping the latte can make you sad and decrease your morale, if that is your way in to morning energy, which may eventually hurt your job or business and thereby your income.
I touched up on the topic of saving more vs. earning more, where to put priority. My priority is clearly on spending my time more on earning. Apart from my day job I have this blog as a means to earn money in my spare time. Which over last couple of years has earned me a sizable income.
On the other hand, had I been clipping coupons in my spare time, It would have saved only a tiny fraction of money I earned through my blog.
More over,collecting and clipping coupons for anything and everything is actually more likely to lose you money than saving because since you have the coupon in your hands, which usually has a deadline, you actually end up buying a product that you really do not need, wasting precious money.
The secret to becoming rich is not saving pennies but to work harder and earning big money. There are three mains ways to achieve it. The first is to study. You may already have a university degree, but is that enough? Today more and more people pursue the master degree in their field because they know that people with such degree earn more, have more job security, are less time unemployed, and usually work the same number of hours for greater payment.
Enrolling in a degree is very hard; you need to pass the hardest exams in the world just to get in. If you succeed you need to pay staggering tuition amounts every month plus you will need to study harder like never before. However, you should always look at such objective like a mission statement, like a financial investment, which is almost guaranteed to make you a profit in a few years.
If you do the math and calculate how much the degree costs plus how much you will be earning in just 5 years, you will see that you can pay the entire degree and start to make a profit usually in less than 5 years and after those 5 years, everything will be a profit.
The second is to get a second job and double your income. If you have been working 7 hours per day and earning around, let us say 3000$ per month, you could be earning 6000$ per month with a second job. Now that is real money, many times more than saving a penny by skipping latte. Very hard working people are never satisfied with just one job and even for their financial security; they prefer to have the second job in case something goes wrong with any of their jobs.
Searching for a job is very hard these days because they require more and more degrees and companies are now much more likely to fire people if they do not perform as if they expect them to perform. The financial crisis is making things harder than ever before but it is worth the effort to see two checks coming to your mail every month. To search for a new job the best place to go is the internet. Forget about just reading the newspaper or to go to an employment center.
The really good jobs are available online only because potential employers want to connect with candidates, which are able to use the latest technologies. You should be using websites like Monster Job and similar ones to see what the job market has to offer and if you have what it takes to apply to the job.
The third way to boost your income is to start your own business in the real world or on the internet. What is the world in need now? Can you satisfy their needs? What can you do the best? Answer these questions yourself honestly and see if you have the potential to start such a business.
If you are passionate about building websites, you can start an online company that builds websites for people and business and you can charge a monthly bill to keep the site up, running and always updated with the latest information. With the internet, there are no limits.
The entire world is a potential customers and the only way obstacle to your success is your very self. If you are hardworking, if you always do your best, and if you excel at using computers and internet, you can make a profit online.
Readers, where is your priority? Where do you spend most of your time? Trying to earn extra income or trying to save money. If balance is important to you between the two, what your way of balancing?
Tim Huntley says
Your post was greatly appreciated this morning, and it helped me to clarify my thinking about my life as an entrepreneur – So Thanks!
I ended up writing a long post myself and linking to yours (hope that is OK).
Jon @ MoneySmartGuides says
I spend most of my time increasing my earnings. I can only cut so many expenses until I get to a point where I can’t cut anymore. I like to put a value on my time. I need to earn at least $20 per hour to make the savings worth it. So when a savings opportunity arrives, I compute it to see if it is worth it.
Along the same lines, in the Sunday paper in my area is a featured tip to save money. Most times it computes to saving $200 over 20 years. I question why you would even go to the trouble of saving that. They easily earn $200 in much less than 20 years.
Great post. I’m never giving up the lattes!! I’m all about just earning more money.
Money Beagle says
While skipping lattes and clipping coupons won’t make you rich, not doing those things can certainly help make you poor.
[email protected] With a Few says
Nice post, but my view on eating and money are the same. Everything is ok in MODERATION. So maybe a latte a few times a week would be better:)
kathryn d says
You will never get rich by saving.However,I do believe “a penny saved is a penny earned” and “if you look after your pennies, the dollars will look after themselves” sayings.
Most people who make more money, justify it in their head, they deserve to spend more money.That’s fine if you want to work until retirement, and then draw the pension.
Personally, we retired at age 46 & 50 and have no plan to ever need the pension when I get to that age.
My husband and I used OPM (other people’s money) and leveraged. We purchased several rental properties in a very short time, and used the equity in our home to finance the downpayments.
Even now we are frugal, because that is just our nature. We travel 8 months in Australia, and then return 4 months to Canada.
We have very few wants. Before retirement we worked out butts off, brown bagged it to work,thermos,cheap take out food occassionally and bought only sale/reduced groceries.
I disagree that one can’t get “rich” from saving. My mother was severely disabled after working only seven years of Civil Service. Thank God she then received a small pension, which she does to this day. I can only imagine that the medical bills my parents paid over the years ate up more than that pension. My dad, also a Civil Servant was always in a low paying job. He also joined the National Guard at 18 and was a “weekend warrior”. Certainly Middle Class by all definitions. The National Guard did not receive any of the military benefits, except my mom was able to go to the commissary one time during his two-week summer deployment. She stocked up as much as she could, however feeding a family of five on a very tight budget didn’t allow for a lot of stocking up. I word hand-me downs until I was in Middle School, and new clothes throughout my 21 years at home came from Wal-Mart type stores or less. She made her own, mine and my sister’s clothes for any special occasion, church and many school clothes. My parents SAVED as much as they could. Being depression era children made a huge impact on their need for live very frugally. Are they rich? Not by mansion and Mercedes standards. However, they can afford to live way more than comfortably on their incomes without touching their savings. My dad draws the minimum $2600 and year out of his IRA only because he has to. I do their taxes, and their total income is around $50k. They still save, save, save. They can afford a house cleaner but use one only once a month. They have paid cash for any new cars for as long as I remember. I think they may have financed something a few times just to “build credit”, which is unnecessary because theirs is perfect. They have conservative investments, and the last time I saw a bank-statement they had over $65,000 in their checking count alone. They purchased both of my kids cars, and also bought my dad a new truck one time, mainly so they could give my son their older one. I know people their age who made twice the income and didn’t save, and they have nothing to their name, no security, and struggle to make ends meet. To me, my parents are rich, and that came from savings. I can only hope to be anything like them at their age.
KK @ Student Debt Survivor says
I’d rather make more money and be able to enjoy simple pleasures (within reason). But if I can save money doing something simple (making tea at home instead of buying it), I’d do that as well. Some things I’m not willing to give up and will just work harder to have (dog walker so the dog doesn’t have to hold it all day, prepared meals for my grandparents who are elderly etc.). These aren’t necessities, but they make people and pet’s lives better and that’s important to me.
I think your luxury loving friends are getting to you!
No I still believe in frugality but not up to an extent where this eats in to my time otherwise could have spent in money earning work
[email protected] says
A little bit of this and a little bit of that. Cut the lattes and earn more. Make the great coffee at home! All said and done, that’s the recipe for success…thanks for the post!
I agree. I rather have a better quality of life and not pinch pennies. You just have make up for it by working harder and smarter.
I am focused on maximizing my spare time, with a balance of extra income and frugality. I just did my taxes in 30 minutes and saved $250 from the accountant. But I wouldn’t clip coupons unless I find the right coupon for a product I use just before hitting the stores.
Yasmin E. Parsloe says
This post makes a lot of fair and valid points regarding doing what you love versus saving a buck here and there. For many professionals, work is being spread too thin, meaning that you are expected to do much more than your initial responsibilities. We see this with the hiring of young staff as opposed to veterans in the field, less money and a stronger drive to set foot on the right path. With this – young people have less free time and more stress in their work place.
In a perfect world, furthering education or seeking a second job are excellent proposals to supplement income – but unfortunately, are sometimes not plausible. In this sense, making cut backs and using saving resources are beneficial. A fiend for Starbucks myself, my drink of choice costs $3.65 exactly. If I were to purchase a tall skinny vanilla latte every day on my way to work, I would eventually rack up a monthly tab close to $75. That’s $900 per year! My daily latte costs me one month’s rent. When you reasonably put a daily treat into those figures, you start to re-evaluate the extra calories and sugar rush.
I suggest everything in moderation. Treating myself to a latte every Monday gives me something to look forward to, while also saving money. I also turn to coupons and other saving resources as a method to live within my budget. I know that by clipping coupons, I will never become a millionaire, but we can all agree that any saving helps in a budget-centric economy.
Connor Harley says
Love this post. It made me realize that small favors like this should not be given up when you know you’ve worked too hard. All I need to do is to keep on motivating my best to achieve more and more everyday.
Alice @AvantCredit says
Thank you so much for writing this post! I was getting very guilty of my new found love for skim cappuccinos.. This cup of coffee makes me work harder which is my top priority right now, so it all works out!
Matt from Saverocity says
Its a constant cycle- you have to refine spending and saving habits and bring in sufficient income to grow the nut. Earning with saving and saving without earning both are destined for failure, though the former is a lot more fun!
It is a balance, and important to realize if you are going too much in either direction.