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Let’s Talk Income

If your goal is early retirement or financial independence, then you should find ways to increase your income.

Increasing your savings rate is simple.  Only two things to do. You can either spend less or earn more.  Or better yet, do both.  Once you’ve started attacking wasteful spending, it’s time to make more money. If you don’t know how, then learn to earn more.

The way I view it, the ability to earn is like any other skill.  Some have natural talent at it, some don’t.  Some get better at it through effort, others don’t.  If someone runs faster than I can, they either have natural talent, or better training, or both.  Same with earning money…you can improve this skill with effort.

In my opinion, the openness of the discussion around income-generation would be potentially helpful to many, but has been stifled by two main issues:

  1. Discussing Income is perceived as impolite
  2. Real advice on making more money involves long-term effort, and that is less interesting to the masses

Culturally, making more money is seen as positive at first.  But only until someone moves from a low to middle/average income range. Above-average income earning starts getting a negative connotation.  At best there were fortunate circumstances that are not likely repeatable.  At worst, the person is part of that evil class of “rich” people.  The discussion & learning seems to stop.

I think there is much value in improving yourself in this skill well beyond average.  I’d like to see more open case studies and/or individualized lessons about increasing income to high levels in the blogosphere.   “Be the change,” right?  So I’m starting a section of the blog specifically geared for people who want to learn to earn more.

I’ll try to contribute my thoughts on this subject regularly, including stories of what worked and didn’t work for me.  I’ve been pretty successful at constantly increasing my income, so hopefully this will be interesting to some.

Overcoming Perceived Impoliteness

Culturally, income is something you just don’t discuss in the South**.  Especially if you make above-average income.    It’s rude and impolite in a social setting.  People feel bad because they are “less fortunate” than you – or vice versa.   Jealousy crops up…you know the drill.

I’ve felt uncomfortable with discussing my income probably due to this cultural norm, and being a realist about how people will react. I’ve struggled with whether it’s ok to share my stats on my personal finance blog.  Eventually I decided the internet is a close-to-perfect place for this discussion.

We can have a relatively faceless discussion about the hows, whats, and whys of making more money.  For me, the “faceless” part was key.  I even started a new blog because I’d told my family and friends about the last blog.  I was worried that discussing my income would be offensive/weird to them.

To anyone earning a low/average wage – I recommend that you keep reading.   Don’t become defensive and assume that my (or someone else’s) path was easier than yours.   Maybe it was, maybe it wasn’t.  That’s not the point.  The point is that I’m putting my bumps, bruises, successes, and failures out there for all to see.  Copy the successes; avoid the failures.

Delayed Gratification Takes Too Long

Another reason I believe income improvement is secondary in FI circles is that results are not immediate. It’s not the same as reducing your shopping bill, skipping meals out, or cutting cable. These cuts show in your cash flow within the first month of action.

Increasing income is a longer term goal, akin to losing weight.  Small constant positive effort gets the job done.  Positive reinforcement only comes months after constant effort.  This is much harder for today’s culture than instant gratification.

The most effective way I have found to meet a long term goal is with an attitude change. I can’t just guilt myself into remembering each time that a delicious dessert will make me 0.5% fatter.  I have to change my perspective…figure out what I care about.  For me, it’s getting focused on the positive benefits of a healthy life.  And then change my attitude towards food to enjoy the real, fresh side of healthy foods.  I don’t choose healthy every time.  Luckily, it’s not a win-lose game…it’s shifting my lifestyle and thus patterns along a spectrum.

Increasing income is similar to this in my mind. First, acknowledge that your working career will take up a significant portion of you life. Second, don’t get depressed.  There are positives and negatives in any situation.  Assuming you want to retire early, then there are negatives that outweigh the positives.  Latch onto the positives, and build your work life around that.

Positives could include:

  • Creating things is exciting
  • Working as part of a team builds personal bonds,
  • Success/achievement is a nice feeling
  • Status from a job/position sometime has perks
  • Providing for your family is a noble pursuit
  • Many jobs help others through the work

I promise there is something to hold onto. If you can’t find anything positive , then the problem is probably your attitude, not the job.

Rest assured that this isn’t just a new-age philosophy mindshi(f)t.  You are coming up with long-term solutions to address the negative side of working for your bread.  A big piece of the solution is gaining a positive attitude at work and using it to increase your income.

Your work is and will continue to be a big portion of your current life.  Now in the short & medium term you can get back to the business of enjoying your life.

Learn to Earn More

Let’s assume most middle class people who attempt it can get to at least 40% savings rate just with basic frugal living.   This equates to a 22 year working career, based on the FI-world commonly accepted chart below (details in MMM’s post).  Not bad.

Savings Rates vs Years to Retire
Savings Rates vs Years to Retire

If you double your take home pay with fixed spending, then this rate increases to 70%…or working career shortens to 8.5 years!  Well worth the effort.

Ignoring your ability to increase income is ignoring half of the equation.  So I will try to balance the cost cutting suggestions with cash producing strategies.  And I’ll use successes & failures of my own as context.  Hopefully someone can learn from it.



**But you certainly do show off your income. Without showing that you are trying to show it, of course.