Certainly, everyone enjoys seeing a full bank account. Some people feel that the road to this is through frugal living. However, other individuals believe that earning passive income is better. Although both of these paths can help to accumulate savings, increasing your income can be a great way to live better. The ultimate goal is to gain financial freedom.
Passive Income Seekers
The passive income concept rests on the idea that a person grows his or her salary so that it is possible to pay bills and save for a comfortable retirement. The person who follows this line of thinking feels that taking an abundance approach over scarcity tactics will create a better life. Also, he or she does not believe in constantly feeling denied.
What works for such people
- Unlimited Returns: To be sure, there is always a limit to the amount that one person can save. However, there is an unlimited amount of money that can be earned. In many ways, the ultimate roadblock to bettering your lifestyle is your drive.
- Focus on the Abundance and Potential of Life: When you constantly keep yourself from enjoying a treat from time to time, life gets boring. There’s already too much negativity in the world. Therefore, denying yourself a special cup of coffee once a week will only drain your spirits even more. When you allow yourself to spend a bit of hard-earned money, you can feel life’s full potential.
- Feeling of Continuous Growth: It is believed that one of life’s biggest secrets to happiness is having the sense that you are constantly growing. When you create extra passive income, new challenges arise. This keeps you on your toes and feeling worthwhile.
What does not work for such people
- Being Bold and Moving Away from Comfort: When you’re actively seeking to earn more money, you must push yourself out of your comfort zone so that you learn things that are outside of your normal day-to-day life. Failure is possible. However, not trying guarantees failure.
- Losing Time: The goal of earning more passive income is to gain financial freedom. However, this may come at a cost. In many cases, this may make you lose invaluable time with your friends and family. You must prioritize money and precious time.
- Savings May Not Actually Increase: When you earn more income, you are likely to increase the quality of your lifestyle as well. This means that you will spend the extra income. In other words, you may have a larger home and a fancier vehicle, but you gain no real savings. Since this does not promote financial freedom, it may defeat the purpose of working harder.
Ways to Earn More Income
You may see the benefits of this perspective, but you may be unsure how to add more income to your life. It is helpful to follow tips that increase your earnings.
- Take Extra Hours at Work. Overtime or extra shifts definitely heighten your income. It could be a temporary or a more permanent arrangement.
- Ask for a Raise. As a long-term solution, you may wish to ask for a promotion. Your office manager may be able to shed light on how to qualify for a raise.
- Begin a Side Business. Besides your regular job, you may consider a side hustle. For example, if you are crafty, you may sell wreaths or other home accessories. If you enjoy working on cars, you can fix problems in your home garage. You may be surprised at the ways a side job positively influences your finances.
- Train for a Better Job. Although this requires time and funding, receiving training for a better career may be worth the investment. In the end, you can earn a higher salary in the future. However, it is not wise to go deep into debt for a small wage increase.
Frugal Living/Saving Every Penny Believers
Having the ability to save money gives you a powerful feeling. It is always beneficial to spend less than you earn. A person who follows this mentality does not mind giving up certain luxuries or even some necessities to be content with the fact that he or she has money in the bank for an emergency or retirement.
What works for such people
- Changes Bring Immediate Effects: As you save money, it accumulates in your bank account. When you have this money, it is possible to make larger payments on your loans and credit cards. As the balances drop fast, you save on expensive interest.
- Living Simply to Appreciate Life: Minimalism, gaining popularity these days, advocates that a person who spends less gets to appreciate life in a better way. In other words, when you do not depend on tangible items for happiness, it is possible to enjoy the basic beauty of life.
- Discipline: It is not always easy to live frugally. It requires willpower and determination. For example, giving up on something that you crave keeps you disciplined. This habit carries over onto other parts of your life. In the end, it may keep you content with the things that are already in your life.
What does not work for such people
- Limited Cuts: In reality, there’s only so much that can be saved. Base expenses are never eliminated. Eventually, you will reach the limit of your savings.
- Deprivation: When you keep denying yourself treats, you will begin to feel bad. Life is meant to be enjoyed. Eventually, you will put your focus on the things that you can’t buy, which will make life a struggle.
In Reality, Passive Income is Better Than Frugality
Of course, you don’t want to have financial worries. You may choose to increase your passive income or to live a frugal life. Being frugal can keep extra money in the bank. However, becoming a miser can detach you from the good things in life. The classic movie “A Christmas Carol” streaming on fuboTV is an excellent example of how pinching pennies can cause life to become miserable.
Instead, it seems better to find ways to earn extra money. As discussed, it’s not very challenging to broaden your income potential. At the end of the day, you want to obtain financial freedom without sacrificing time with your friends and family. Thanks to passive income, you don’t have to worry about going broke, and you can live life to the fullest.
Dumb Passive Income
