It's Not About What You Make Its About What You Keep

in #income4 months ago

Hey Jessavvy investors

Earlier this week I spoke about how we should celebrate and opely share ways to reduce ones tax burden, any capital we allowed to keep reduces government overreach, provides capital that can benefit you and your local economy and gives citizens back more power. Many people today put far too much pressure on their salaries to support all their habits, wants and needs they have now and the ones they plan to have in the future.

Have you ever looked at your monthly balance sheet? Look at the withdrawals versus the amount of deposits. Most people will probably have 1 large deposit their salary and the rest would be wtihdawls.

So how are you going to save, invest, create multiple sources of income if you have one central point of failure which is a single income.

I don't earn a big income by any stretch of the imagination, in fact I'm actively trying to earn less as it forces me to spend less. Sounds weird doesn't it? Well the less I earn, the less of a tax burden I can be, so I don't lose that opportunity costs, I shift it around, but that is a story for a other time.

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Making your single point of failure a systematic failure

I know a fair few people who earn 2,3, 6 even 10 times more than my monthly income, yet I am in a better financial position then they are because of bad habits and poor understanding. The rat race for many is about increasing their salary, but an increase in salary means an increase in your tax burden.

Yet a lot of people still feel this is the best way to get ahead. In simple math and nominal terms, more salary is better, of course, but it's not about what you earn, its about what you keep.

On top of having a bigger tax responsiblut, many of these peers I've noticed will try to live exponentially higher than their salaries.

So you earn an income, you can by a VW Polo which is fine, but now that you have a greater income, you require a BMW so in fact you're not earning more, you're actually in the same spot, and in many cases you're worse off, if you run the numbers.

Having a single income and using it to buy things that don't generate an income makes no sense to me, but this has been normalised to the point where my point of view is seen as psychotic.

Stack up your deducatables

In my case, I try to keep my income as low as possible. In some cases, I will even take money out of my credit card, place it in a tax free account and then use that investmetn as a deducatble and then pay back my credit card before the interest kicks in.

There are way to work the system, if you do the research ad can help you keep more of your income. Then what you can do is use that additional income to reinvest into things that provide you with a return and you keep repeating this over and over.

For example, the points I get on my credit card, instead of buying something dumb with it, I use it to invest in ETFs and generate a return from my credit card points.

Any returns are reinvested, so I never take the capital gains, I never realise a return, in fact I've always got losses lined up to offset any income I make.

Start small to dream big

Like I said I don't earn big bucks, far from it, I just feel you need to learn how to work with small amounts if you have the ambition to manage large amounts in the future.

Have your say

What do you good people of HIVE think?

So have at it my Jessies! If you don't have something to comment, comment "I am a Jessie."

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Live below our means.

The longer you do that the higher the ceiling becomes for you to take advantage of opportunities instead of having the roof crush you. That distance you create by living below your means can help buy you so many years of leisure or things you really value

Posted Using LeoFinance Beta

That's exactly what I am enjoying now, out traveling etc👍

Well I feel there's this need to spend more immediately you make more money. But then your way of taking, reinvesting and taking less profit for spending is actually recreating. Not many people can go this.

Posted Using LeoFinance

Indeed, there's a saying here, we have to spend the old money to make room for the new money which is the dumbest thing I've ever heard, but somehow becomes the justification for constant spending. Save your purchasing power, turn it into streams that make more purchasing power so you don't have to constantly go out and earn money and chase the carrot.

In a world where we all constantly chasing the next high, how about stopping the chase and let it come to you

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I always try to remind myself to be minimalistic in the way I spend even if the future promises things. But then your post here says one thing I know, wealthy people don't become wealthy by increasing their spending rate

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Lol, the world is one big marshmallow test, it's all about who can delay gratification most and once you jump that hurdle it how to deploy capital effectively. It may sound simple, just 2 steps but many fall at one or both

It is not a lot of money that makes you rich- It is low costs.

I like that thought too. Our family go that way.

I write a lot of creditcards and thoose can be very Good to make liquitiyty without paying rate.

Like todays post much !

What is the interest on a credit card in Sweden and what is the interest-free term? Here I have 55 days of credit card spending interest-free but thereafter you pay a 22.90% interest

Posted Using LeoFinance Beta

Similar the same.
But that tells me I can borrow 1000usd in 50 Days for Free..

and after the 50 days what is your interest rate like? Mine says I can borrow up o $6000 lol not that I would EVER do that

15-25%
So I Always pay back total amount. Never pay a fee or rent.
But still can take benefit like bonus

I have never done it But It is possible.
Use 3000USD credit to invest in usd-c and get 10%/year About 25USD in 30 Days. When theinvoice come I withdraw usd-c (pay 5usd in fee) and have 20usd Free.

So if you actively repeated that for a year it's only an %8 APR lol I'd much rather just go yield farm on TRON or Uniswap

Yes.
Cant you?

Just love this arbitrage ways.
That is mini mining.

Hmmm, why to have a Polo when you can get a BMW ?

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Well if you can afford one without having to broker 5 years of your life to get it, by all means. I'm not saying don't buy nice things and don't enjoy your life the way you want, I'm saying don't wreck your balance sheet to save others

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I think that keeping a close eye to the spending habits can make a person really save up a lot. It is all about money management rather than how much you earn

It's like water you cannot hold it in your hand you will lose it, you can only direct it in a certain direction and keep it flowing if you wish to benefit from it.

Exactly!

When you earn more, you naturally want to spend more. But those who can manage their spendings will definitely have an edge over those who can't. So, it's important to do more of investments with your funds than just spending. We shouldn't spend more on liabilities rather our spendings should be on things that can bring profits.

That's the gamification at play, we're never satisfied so they just keep moving the carrot so you keep chasing it. Instead of closing the gap by letting it come to you. Most people don't know what to do with their savings, trusting it to 3rd parties who aren't good investors and are just keen on making fees.

This is why most people won't break out of the cycle

Posted Using LeoFinance Beta

same here i also have 1 deposit per month and then withdraw them to spend
what can I do there not much income source