How To Save More Than You Spend and Double the Speed of Financial Freedom

Sunday, November21, 2021 / 10:00AM / Grace Agada / Header Image Credit: The Simple Dollar

In a world where themajority choose instant gratification over delayed gratification, it is rare tosee working professionals that can live off their savings without financialstress. What is common to see are working professionals that are rich because oftheir regular salaries and become poor the moment this salary disappears. Yetthe most effective way to gain financial freedom and break away frommiddle-class poverty- a condition where the same person is rich during theiractive career years and poor in retirement, is to save more than you spend.

Today your life is stableand comfortable not because of your savings or investments but because of yourregular paycheck. All paycheck-based success will disappear at retirementand when it does the only way to maintain the same quality of life is to havesaved more than you spent. Thus, the level of comfort and stability that youwill experience in retirement will be based on the size and integrity of yoursavings and how much stable passive income it has produced before retirement.

Savings is thus thefoundation for retirement success and without the ability to save more than youspend you cannot achieve financial freedom. Yet Research shows that 80% ofworking professionals suffer a deplorable lifestyle in retirement due to poorsavings and overreliance on a paycheck-based success. Many do not save. Thosewho save only save leftovers of their income. And even others end up eatingtheir savings reserves and undoing their success. Thus, in retirement it is commonto see many people whose savings cannot save them and investors whoseinvestments produce more anxiety than income. To have a restful retirement lifeyou must save more than you spend and invest in ways that give you financialfreedom before retirement. The question is why do many people struggle tosave this way?

The answer is simple, but it has little to do with the economy, your employer,or the government and more to do with the financial decisions you are makingevery day. Let's see some of the reasons why you spend more than you save.

Why you Spend More than you Save

There are only tworeasons why you spend more than you save.

1. You value today's comfort over tomorrow's security.

2. You are working harder on growing a consumptive lifestyle than you are onmaximizing a productive lifestyle. Everyone has two kinds oflifestyle to maintain - a consumptive lifestyle and a productive lifestyle.

Your consumptivelifestyle comprises your expenses and everything that drains income away fromyou, and your productive lifestyle comprises your skills, relationships,sources of income and everything that produces more income for you. Thechallenge is that most people can sit in their living room and increase theirconsumptive budget by 50% or 100% in a year simply by buying the latest car,iPhone or adding a new member to their family. But only a few people canincrease their productive lifestyle (Income) by the same amount in the sameyear.

Research shows that mostpeople would still be earning their first salary but for the regular salaryincreases and promotions that have increased their income over time. This meansthat if left alone only a few people can significantly increase their incomeoutside their salary. Thus, at the end of a typical calendar year it is commonto see people who have created more financial load than their income canhandle. Many years of financial load surpassing income and savings iscompletely eroded. Thus, at the end of most people's career life they havesucceeded in making other people richer through their spending than makingthemselves richer through their savings. Saving more than you spend is the onlyway to escape this rabbit hole.

But why should you save more than you spend and is this truly necessary?

Why Save more than You Spend

As a working professionalthe odds are stacked up against you.

1. You earn a limited amount of income and have limited resources.

2. Your regular income earning period is fixed to 30years.

3. Your time is consumed by one source of income limiting your extra incomeopportunities.

4. Your relationships are more wealth draining than wealth creating.

5. Your future goals are bigger and more expensive than your living standardgoals.

6. Your body will be requiring more maintenance after 30years of a stressfulwork life.

All this means that youwill require more funds in the future than you do today, and you will requirethis fund in the absence of salary. Thus, the only way to survive in theabsence of salary is to save a bigger portion of your income today, get richslowly, and build solid passive income that can make you richer in the laterpart of your life than the former. This means that you must get to the pointwhere your savings becomes your solid base and where your livelihood isfunded from stable passive income than active income. But how do you achievethis goal?

How to Save More Than You Spend

There are only two waysto save more than you spend.

1. Earn income that is double or triple your current expenses.

2. Reduce your current expenses to half of your income and live a simpler andless consumptive lifestyle. Both options require growth, discipline, anddelayed gratification and is easier said than done. Yet doing hard anddifficult things like this that many people would not do is the only way toachieve your desired success.

To double or triple yourincome, the fastest way is to add a second source of income that can give youhalf, the same or more income than your current expenses. To do this you needto develop high income skills and look outside your salary income. Your salarycan only crawl to success and your job-based skills and certification can atbest give you another sluggish job-based income. To earn income quickly youmust earn like a business owner. You must find a source of income that can helpyou earn business-based income without the stress of owning a business. Thisincome must require little of your time and must produce income that is biggerthan the workload.

To earn this kind ofincome you need to develop three skills.

1. Problem solving and creativity skills - the ability to identify highincome problems and completely solve them using your own resources andcreativity.

2. Rich relationship building skills - the ability to identify, form andnurture wealth creating relationships that can expand your opportunities,possibilities, and options.

3. Sales and marketing skills - the ability to find a customer, convince themto purchase a viable product and make the sale with little or no external help.

Without these threeskills, all you will have are multiple painstaking extra income options thatrequire hard work and long hours like your current job, but are yet too weak togive you the financial freedom that you desire.

Another thing you must dois to live a simpler and less consumptive life. Living a simpler life meansanchoring your expenses at a point that is the same or lesser than yoursavings. Steps to achieving this is to:

1. See your bonuses, allowances, and annual salary increases as investingincome and not spending income. If you cannot live within your 12months salarybudget, you have a high maintenance lifestyle.

2. Make your savings fail proof. One of the biggest time-wasting activitiesis to save and end up eating your savings. Savings is for investing and not forspending and the only way to protect your savings from yourself is to make itfail-proof.

3. Invest without losing money. Losing money through investing is anotherbig-time waster. Thus, to invest without losing money you must focus yourinvesting on generating stable passive income and not risky, unreliable,and volatile returns.

It is better to be richerin the second half of your life when you can pursue your own goals, achieveself-actualization and build a lasting legacy than to spend your wholelife working for food and survival.

If you need help savingmore than you spend, making your savings fail proof, developing high incomeskills and earning income that can double your savings and cash reserves we canhelp you. Send an email to [email protected]