You’ve got to focus your energy on where the reward is greatest
The road to wealth creation begins with your investable income. That’s the money that’s left over after you’ve met all your daily expenses.
There’s two ways that you can start building your investable income. You can spend less and save more. Or you can earn more money.
You can save or you can earn.
Which one should you focus on?
Earning. That has to be your priority. Why?
Because earning power is unlimited. Saving power is hard-limited.
That is, the most you can ever save is 100% of what you earn. You can’t save 110% of what you earn. And so savings power is necessarily limited.
But earning power is potentially unlimited. There’s no upside limit to what you could earn. You could earn 2x your current wage next year. 3x the year after. 110x 10 years down the track.
Earning power is unlimited.
So if saving power is limited, and earning power is unlimited, which one does it make sense to give the most attention to?
I remember when I first started out I was trying to scrape together every cent I could to get my investments off the ground.
And so I made a choice to drink cheap beer. I won’t name names, but it was a local beer. Not one of those shmancy imported beers. Anyway, it wasn’t my beer of choice, but it was ok, and I was happy because I was saving like 10 bucks a carton.
But then that year I turned a deal that had a 70 grand profit. Profit. After expenses.
I went to the fridge and got myself a celebratory beer. As I looked at that crappy beer I thought about how much I had saved on beer that year… $300 bucks tops. Absolute upper limit.
$300 bucks. On a day where I made $70,000 it just seemed like a miserly insult to my taste buds. It seemed totally pointless.
Since that day, I haven’t stressed too much about saving. (I don’t mean accumulating savings – I’m all about that. I mean hunting out discounts.)
Because it seemed like there was only ever going to be so much reward to effort, and that reward wasn’t much.
However, my earning power was unlimited. If I could earn $70 grand in a day, what could I earn in a year?
If I had energy to invest, this is where it needed to be invested – in finding better ways to make more money.
… not pouring over shopper-dockets to save 30c on fish fingers.
Your earning power is unlimited. This is where the real upside potential is.
And so this is where you need to be focused.
JG.
Boio-Bess Daro says
I totally agree with you, that you are totally responsible for your own wealth creation & building and have to be loyal and dedicated to yourself in whatever towards it! Earning power is limitless and galore but saving towards it can be so hard!
Salam.babu says
Hi.im babu
Salam.babu says
Hi.im babu.yu