Earn $1000 or Save $1000?

Let’s imagine for a second that I came into your house and sat across from you at your kitchen table. I tell you that I can teach you how to get a $1000 raise, OR…you could learn how to live on $1000 less…WITHOUT giving up any amount of happiness or overall life satisfaction. Which would you choose?

Most would choose the $1000 increase in income. This is because they are still trapped in the consumer mindset that more spending power = more happiness. Most would believe that they could increase their quality of life by having the extra money to spend. For someone who has found their way out of the consumer trap, these options may appear more or less equal. Could either of these options leave you better off?

With a bit of comparative analysis, we can see that the saving $1000 option is the way to go. Savings always kicks the ass of earnings.

With earning $1000 extra, you will receive:

  • $1000 more to spend, save, invest, or whatever it is you wish to do with it

 
With saving $1000 extra, you will receive:

  • $1000 more to spend, save, invest, or whatever it is you wish to do with it….AND
  • You will have effectively reduced what you need saved for retirement by $25,000

Remember the 4% rule? We already know that with 25 times your annual spending, you are ready to retire. When you decrease the amount you need to spend in a year, you are reducing the amount you will need saved to live off for the rest of your life! By how much? A factor of 25. In other words, every dollar less a person spends per year is 25 dollars less they will need stashed away.

So obviously, it is important to note that there is a double effect of saving. Cutting out the waste from your life is the absolute best way to fast track yourself to financial freedom. If you took just one thing from this blog, never to read another post again, PLEASE, let it be perspective of the power of saving. Like I mentioned before, leading a less wasteful lifestyle will get you 90% of the way there. The rest is just a few nuts and bolts.

I may have always been a saver at heart, however only within the last year have I really unshackled myself from a materialistic lifestyle. Let me tell you I will never look back. Nothing compares to the feeling of no longer being stuck on the treadmill. Because I know my life will not fit the 9 to 5 until 65 structure, I find myself significantly more optimistic about the future than those around me. I know that I am in control of how I spend my time, and that no personal project or goal will be left unattended.

The only downfall in transitioning to a simpler lifestyle is the feeling of watching those you love around you actively digging themselves into the consumer trap. It can be depressing to witness intelligent and creative individuals unknowingly waste their limited time here on earth pursuing false contentment through bigger toys and symbols of status.

It is from this I receive my motivation for this blog. You readers, the 99% I hear and read about everyday, you all have the chance to buy something truly worthwhile with your money, your freedom.

And all it takes is a little simplicity.

Thanks for reading