Money — It’s Not How Much You Make, It’s What You Do With It
How are you utilizing your hard-earned dollar?
You can be earning $250,000 and be poor.
You can be earning $50,000 a year and be a year from early retirement.
It’s not how much money you make (or earn), it’s what you do with it that matters.
Our $250,000 earner is living a poor life.
She’s choosing to spend all of her money on trivial things, which don’t bring her closer to her long-term goals.
- She spends all her money on toys, drinks, expensive clothes and jewelry, an annual fancy new car, and a gigantic house (for a family of one).
- She’s dependent on her large paycheck to fund her swelling lifestyle.
- She won’t have an early retirement, options to work for a smaller paycheck (with less stress), or the freedom to spend her time how she wants.
- She’s handcuffed to the paycheck and the dollars for time.
This is a formula for paycheck rich and life poor, which is a spiral that’s difficult to escape.
Our $50,000 earner took a different path.
She chose to be modest in lifestyle creep, instead focusing her money on her highest priorities (and those that bring her the most joy).
- She spends a lot on travel but saves by driving her 9-year-old Toyota Corolla.
- She maximizes her 401k (planning on an early retirement) while purchasing a very modest first home. She prefers to be cash-rich instead of house-poor.
- She has a budget that prioritizes goals, paying herself first before spending any remaining money on every streaming movie service possible.
- She has less stress from her lower-income job, so she has more energy and time to focus on her passion for writing and gardening. Which also brings in a small side income and fresh vegetables!
She chose to use her smaller income for a larger life!
Your salary does not dictate your lifestyle or your wealth.
Your actions do.
As a reminder, if you’re living paycheck to paycheck at any earning level, you choose where you spend your hard-earned dollars.
Do you want to use it to perpetuate the life you currently have?
Or do you want to leverage it to create the life you want to have?
And no matter your starting point (deep in debt, low wages, house poor, or searching for financial guidance), you can make progress today toward creating a new life!
About the Author
Hi! I’m Q, and this is The FI Adventure. I’m chasing Coast FI and freedom from my 9–5 — and I have two years left until I reach it.
