FI Fundamental #2: Maximize Income

Financial independence is achieved by maximizing the difference between spending and income. The higher your savings rate, the faster you can get to FI.


A lot can be said about using frugality to streamline your spending (and as a result, your savings). There is a beauty to financial simplification and avoidance of overindulgence that anyone can benefit from.

However, especially with lower incomes, increasing your savings rate can be difficult by only focusing on reducing spending. Unless your spending is way out of control, you may benefit more from increasing your income than from decreasing your spending.

Increasing your income doesn’t have to be solely through your salary, either. It can even be fun! Choose something you enjoy doing in your spare time and find a way to make money from it. These “side hustles” especially appeal to me because it means I have complete control over how I run my small business. It gives me entrepreneurial freedom that I don’t get in my full time job.

Magnitude matters

The primary purpose of minimizing spending is to increase savings.

However, there is a practical limit to how much you can reduce your spending, unless you completely reject society and become a mountain (wo)man.

The actual lowest level of spending will vary based on your area, and many people have found very creative ways to cut expenses more than I ever could, so I’m not going to try to throw out an actual value. The most important metric for gauging your spending is your savings rate.

But as your reduce your spending more and more to increase your savings rate, the small adjustments have less of an effect.

At some point, it will probably be more worthwhile to spend your time trying to increase your income rather than reduce your spending.

Contrary to your spending, your income has no limits.


For example, someone with a salary of $30,000 and already low yearly spending of $12,000 may be able to reduce their spending by another $1,000, but it might be easier and a better use of time and energy to focus on increasing their income to $31,000.

Know your worth

The first thing to do to try to increase your income is to increase your salary. What if you don’t know what your salary could be? Enter the Internet, the Great Equalizer.

Like everything else involving money, there is a market for salaries, and the best way to find out your market salary is to compare other (similarly qualified) people’s salaries.

Most people won’t respond well if you walk up and blatantly ask them how much money they make, but if you add a level of anonymity they are much more forthcoming. You can use websites such as Glassdoor and to research how much other employees are making.

Glassdoor is helpful if you are looking for salaries for specific positions at specific companies, and is helpful to find out your general market salary based on your career path.

Just ask

Many people are overly afraid of rejection and balk at the idea of simply asking their boss for a raise.

My reasoning is that you work there for a reason: to get paid. The entire interview and networking process over dramatizes our career purpose and what “drives” us to the point that no one openly discusses finances. I like my job, but I wouldn’t do it for free.

If you find out you’re underpaid, how can you increase your salary? I really believe it is as simple as asking for a raise. Prepare justifications for why you think you’re worth more, and approach your boss at the appropriate time, like at a yearly review. If your company doesn’t have reviews, schedule a time to meet with your boss.

However, there might be harm if you continually ask for a raise. This isn’t something that I think you should be doing every six months.

Side hustles

Contrary to popular belief, your income is not limited to your salary. With a little creativity and extra work you can start a lucrative business (side hustle) outside of your 9-to-5.

Side hustles appeal to the entrepreneurial spirit, which I think many FI’ers have, and empowers you with complete control over what you do and how you do it.

So what should you do? Well, my friend, the world is your oyster, especially with the advent and moderate popularity of this thing called the Internet. Here are some Internet things that side-hustlers do:

  • Reselling on Craigslist, Amazon, or Ebay.
  • Creating and selling a product
  • Blogging! (wut)
Ever wondered what the Internet looked like? Now you know.

Wow! Those sound great! “But what if I don’t like this Internet thing?” Glad you asked!

  • Handyman work
  • Rental properties
  • Creative art
  • Consulting

There are some ideas to get you started. Brainstorm some more ideas on your own. The profitability of any business comes from creativity on the part of the creator, so find a niche that needs to be filled and fill it.

Finding the time to work on your side hustle might be the most difficult part.

There is still plenty of productive time outside of working hours, but it may require you to change some of your habits. Trade things like watching television for an hour each night for perusing house for sale listings.

I have found that in order to actually get things done, I have to schedule specific times during my day to work on my own projects (like, you know…this blog).


5 thoughts on “FI Fundamental #2: Maximize Income

  • September 5, 2017 at 6:16 am

    About to become a landlord in near future, and preparing to start an additional side hustle very soon. This post was written for me this morning 🙂 Greetings from Ireland!

    • September 6, 2017 at 7:00 pm

      Thanks, James! Those sound like major steps. Congratulations! I’m actually interested in starting both as well.

      p.s. I’ll be in Ireland next summer. Looking forward to it!

      • September 8, 2017 at 7:56 am

        Thank you. Oh great, where are you thinking of coming? – I live in the South East. Get in touch, I’d be happy to give you some insider travel recommendations and we could possibly even meet up!

        • September 8, 2017 at 11:52 am

          We don’t have it planned out yet, but we will be flying in to Dublin and then making our way to the West (Aran Islands area). Not quite sure what we are doing in between. It would awesome to get some help and meetup!

  • December 12, 2017 at 1:01 am

    YEEES! I hear to many arguments for the frugality life style in the personal finance world. Although very important and necessary I think that building your income puts it to shame. Increasing our income has helped us dump money into investments and still enjoy life. Maybe I do not have the grit that other personal finance bloggers do but I do not want to spend my time away from work skimping and looking for deals. I drive an old car keep housing costs under control and budget but then I live my life. Focusing on income is huge there is a lot of opportunity in America (my location) to many people limit themselves.
    Damn Millennial recently posted…Market Monday: Bitcoin Futures Start Trading On CBOEMy Profile


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