expanding your means
“Most people would rather live within their means rather than expand their means.” – Robert Kiyosaki, Retire Young, Retire Rich
Most of us would rather be rich than poor. Rich may not mean monetarily rich – it may mean experiences, family, friends – but generally wealth enables the accomplishment of many other goals. How can you do it? You can save. You can invest wisely. You can reduce debt or decrease expenditures. The hardest way to get rich, but the only way that really works, is to expand your means. You have to earn more than you spend, consistently and constantly. You have to expand your means.
I get frustrated reading about achieving wealth by cutting out lattes
But one thing that most people will never try is to increase their “means” past their primary income. It’s hard. I struggle to do it. If I asked you to generate, tomorrow, an extra $10 cash in hand, could you do it? Even if you make six figures a year, could you figure out a way to generate $10 above your normal daily haul? It would be difficult for most of us. Most of us would rather watch Lost than attempt it.
Expanding your means will make you wealthier than saving money. If you save $5, you’ve saved it once and you’re done. If you come up with a new business model that makes you an extra $5 today, and might – might! – make you an extra $5 tomorrow you’ve created a new income stream. Making a tiny bit more will change your life far more than saving a bit.
Kiyosaki’s phrase is telling. Most people would rather live within their means… and they’ll pay for it in the long run. Don’t kid yourself: it’s tough to live within your means. With the onslaught of advertising and “keeping up with the Joneses” it’s hard to resist the Wii’s and the Kindles and the latest fashions and the gourmet foods. If you can, kudos to you. I think I have so far, but it’s a constant struggle. But it’s akin to health: if you can avoid heroin, you’re in better shape than a junkie. It doesn’t mean you’ll live to 100. To do that you have to excel – you have to beat the norms, the average and the mean. Don’t think that skipping the morning latte is enough. You have to make that extra effort to create more wealth. Sitting back and “not buying” is not enough. You have to go out, and make more. You to create wealth, not just avoid spending.
photo by matze_ott
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I love this!
It's true, the majority of people are conditioned to cut expenses rather than brainstorm to create additional income source. The problem of this approach is 1) It makes life lean — like, miserably lean, just a few steps before (mental) starvation 2) It kills our innate creativity.
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Blessings,
Akemi
You could also say that most of us would rather make more money. The fact is though that our expenses have a way of increasing with our incomes. Very few incomes are ever enough. If you live your life on the expectation of an ever increasing income, chances are that you will end up in pretty heavy debt. – I know plenty of people who have modest incomes, who live very well, and who are very content with their lives. I don't know why they should change their lives around or why they would want to follow Kiyosaki's grand vision. What would these people gain?
The real constraint is that most people think of wealth in terms of money. However, what if you could get the same utility for $10 less. How much would that be worth? What if you could get twice the utility for $20 less? That would be worth four times as much. Go that way and focus less thinking in terms of monetary transactions.
This is flawed. I agree that increasing your means is helpful if not critical for financial success but you're wrong about saving.
Saving $5 isn't necessarily once and done. For expenses you continue to incur; utilties, food, etc.; saving $5 can be replicated over and over again.
Also, if one person saves $5 and another makes $5 every month, who is better off? The saver since the person who made $5 has to pay taxes on income.
This hit home for me, have linked you in my own blog as I quitting soda altogether is one of my New Years resolutions. You are an inspiration (and not just cause you beat the soda fiend
)
I'm kind of on board. No reason not to try and find alternative income sources. Also, no reason not to cut Starbucks lattes for home brewed.
I am still amazed that you like that snake oil salesman Kiyosaki. I amazed because I actually enjoy your blog. I don't think I have found another blogger who likes Kiyosaki I respect.
Good point. We need to see who we can 'increase' to really get ahead. Cutting expenses, while healthy in most cases, will only partially solve the problem LONG TERM.
Great point Steve, but I think the reason why this is so far beyond most people is that they can't even get to the “live within your means.” So expanding their means isn't even in their consciousness. And if they somehow managed to do it, you know what they'd do? They'd go out and buy Wiis (guilty), Kindles, and iPhones with the money instead of reinvesting.
Great point Steve, but I think the reason why this is so far beyond most people is that they can't even get to the “live within your means.” So expanding their means isn't even in their consciousness. And if they somehow managed to do it, you know what they'd do? They'd go out and buy Wiis (guilty), Kindles, and iPhones with the money instead of reinvesting.