There’s a lot of garbage financial advice out there.
I'm thinking of one personal finance guru in particular... he’s just some guy with a blog who lives in a tiny house and barely spends money on food.
This guy says your middle-class lifestyle is an “exploding volcano of wastefulness.” And he has a get-rich plan for you: slash your spending in half, or even two-thirds, and live a life of total deprivation.
I know a lot of people are desperate for a lifeline right now. The unemployment rate is 7.9%, and in certain parts of the country, things are even worse. But you absolutely should not listen to this garbage.
Yes, cutting expenses is good—don’t spend money on stupid stuff. For example, if you have subscriptions you don’t use, cancel them. If you’re going out to lunch every day, stop.
Those are easy ways to save.
But trimming around the edges is never going to make you rich. And if that is your goal, you have to focus on the revenue side… you have to find a way to bring in more money.
Most of you know that I used to work on Wall Street. One of the things you learn in that environment is no one worries about cutting expenses.
They don’t worry about finding a cheaper office to rent. They don’t worry about the high salaries they pay their employees. And they don’t worry about overspending on printer ink.
The only thing they focus on is bringing in more revenue. Because you cannot cut your way to higher profits.
This is true on Wall Street. It’s true on Main Street. And it’s true for you.
Personally, one of the reasons I’ve enjoyed so much financial success is that I’ve always focused on the top line.
Longtime readers know that I didn’t start out rich—not even close. I grew up in a working-class household, went to the Coast Guard Academy, and started a career in the military.
By age 27, I was making about $55,000 a year. I was never a big spender. So, financially, I was doing okay. But I wanted more.
At that point, if I’d said to myself, “I’m going to get rich by saving an extra ten thousand bucks a year,” what would that have accomplished? I would have had to live in deprivation, just to save a bit of extra money.
To a certain extent, I did do that. I bought all generic groceries at Safeway and lived far below my means.
But I also went to business school. Then I worked on the trading floor in San Francisco, got some experience, made my way to Wall Street, and made a lot more money. After that, I started my own business and made even more money.
That is how people get rich: by focusing on the top line.
That brings us to the hard part: making more money. You could work longer hours, take a second job, or work toward a promotion at your current job.
You could go back to school and get a degree in a higher-paying field. But school is expensive, so be honest with yourself about how much it’s going to boost your income.
Or you could start a business.
Now you’re thinking, “Get a clue, Dillian. I’m just happy to have the job I’ve got.”
Look, I’m not oblivious to the extraordinary challenges people are facing right now. But the pandemic isn’t going to last forever, and the economy will eventually open back up.
In the meantime, start mapping out how you’re going to boost your personal top line. Or grab some of the opportunities unique to the moment—if you’re a teacher, there’s a boatload of money to be made tutoring rich kids right now.
Jared Dillian