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Common Personal Finance Misunderstanding

Friday, January 8th, 2010
Posted in Advice by Joel Gross

Most people thinking about personal finance focus on budgets and expenses.  They try to reduce the money they spend on food, clothes, rent, entertainment, etc. and increase the amount they save and invest.

These people forget the other side of the coin though: INCOME.

You should put an enormous amount of effort into boosting your personal revenue streams.  For instance, if you make $50k a year and save 5% overall by budgeting you now have $2,500 additional capital.  However, if you spend that time hunting for a new job or starting a side business selling digital gauges, you can boost your income to $60k a year… a 20% overall boost.

I’m not saying that you shouldn’t focus hard on cutting your expenses, but you should put a lot of effort into increasing your income as well.