the least popular money advice

The most common advice that all money management gurus give to people is to cut back on your expenses and save and invest as much money as you can. There’s nothing wrong with this approach but very few people consider taking a different approach. Instead of taking into account all the cents and dollars they’re saving, they can simply direct their efforts into earning more on top of spending consciously.

In a recent interview, Ramit Sethi, personal finance expert and author of the bestselling book I Will Teach You to be Rich, says that the first step to financial independence starts with a simple and straightforward question, “Are you driven by a scarcity mindset, or a growth mindset?”

He shares that if we want to become wealthy, we need to change the way we think about money. Instead of considering money as a scarce resource that we must protect and save, we have to think of it as a tool, and make earning more a priority for us. 

Sethi further explains, “A scarcity mindset is all about ‘I’ve got this much money, I’m not going to let anybody touch it. On the other hand, you have growth oriented people, who say, ‘You know what, I’m happy with what I earn, but I think I can do more. I can grow more, I can challenge myself.’”

He reports that financially successful people prefer earning more as compared to scrimping and saving. They devote their efforts to income generating pursuits, whether it’s through negotiating [their] salary, whether it’s through a side business, whether it’s through investing right from the get go and taking advantage of compound interest over time.

The bottom line is that if we want to become rich and attain financial freedom, we must always focus on ways to earn more.

Not having enough time to start a side hustle or do something “extra” is an excuse. Instead of spending time binge-watching shows and movies on Netflix and other streaming platforms, we need to work towards building our bank balance. We need to prioritize making more income over slashing our expenses alone, because that’ more powerful in the long run.

We can always cut back on our spending and let go of the non-essentials, but as Sethi points out, there’s a limit to how much we can cut, but there is no limit to how much we can earn.

We need to take ownership of our finances and it all starts with letting go of our mindset of lack and dissolving the ‘glass ceiling’ mentality. As Sethi shares, “If you want to be scarcity driven, then you’re going to spend the rest of your life saying ‘Don’t take away what I have because there’s no way I can change it.’ Instead, tell yourself, “I can always grow, I can always learn, and I can always make myself more valuable to the market and create more value for myself.”