America saves… should it?

We’re about halfway through America Saves Week and I started thinking about saving, naturally.  I’ve written about saving money before, probably most infamously when I said that spending less than you earn was the wrong way to think.  My thoughts haven’t changed much since I wrote that article a few years ago (yes, brip blap is approaching five years old).  If you expect to save and reduce and spend less on your way to wealth, you’ll likely be disappointed.

Let me clarify.  I’ve been a frequent proponent of many of the philosophies espoused by Jacob at Early Retirement Extreme and Syd at Retirement: A Full Time Job, and some of the newer “early-retirement” (for lack of a better term) blogs like Brave New Life and Mr. Money Mustache. They make a valid point:  you are not your khakis.  You are not your designer coffee tables.  You can stop spending and reap remarkable benefits.  I completely agree – consumerism affects far too many of us.  Possibly all of us, with the exception of a few… you don’t find many people in my experience who are living far below their means.  Most people are amazed to find someone living slightly below their means.  So the idea that you should spend less than you earn is, in fact, not the wrong way to think.  I need to do more of this, because although I’m not deeply enmeshed in the consumerist lifestyle, I’ve seen a bit too much of “lifestyle creep” to feel innocent.

But I’ve always thought that far too many people sit on their hands when it comes to income, and that’s what I’m focused on now.  A great first step for anyone is to say “hey, I make $40,000 a year – I probably shouldn’t spend more than $40,000.”  But that’s a first step.  The next step should be to think “hey, how can I make $50,000 while continuing to live on $40,000”?  At first, cutting spending is easier:  using less electricity, driving less, spending less on restaurants, etc. – these are easy steps.  But at a certain point, your efforts may be better focused on earning than on spending.

Those may sound like lofty goals, but they aren’t.  I’ve written about the 8 steps to achieve a six-figure career, but I left out one small extra:   for most people, that six-figure career won’t come from a single source.  I don’t think going forward into the future that anyone with ambitions to retire comfortably will be able to do so relying on a single employer, or a single business.  The most successful people will have multiple sources of income, in different fields, which will enable those people to weather downturns in one field by relying on income from another.

I blog.  I don’t need to, honestly.  I make a good living consulting, but it’s easy to appreciate why I continue to operate  a side business like blogging:  when consulting dries up, blogging will still be there.  I enjoy it, of course, but it provides a side income.  I have several other blogs besides brip blap, as well – all of them provide a slow trickle of income.  Soon I’ll be talking more about how I’ve built that business up.  Several days a month now my blogging income exceeds my consulting income, and my goal is to make it exceed my consulting income every day.

Back to America Saves:  it’s the first message and the best message for most people.  If you’re reading brip blap, I imagine you’re already familiar with the basics of saving and being frugal.  Focus on your income.  Do you rely solely on your employer’s beneficence for income?  Stop it.  Get something going on the side.  I’ll guarantee that side income will be the sweetest money you’ll ever make, and you’ll get that much closer to your goals that much more quickly.  Save first – that’s critical.  But earn more:  it’s not as hard as you might think, and it will motivate you more than you can imagine.

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