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Reddit’s personal finance subreddit with over 14 million members promotes the flowchart as the recommended way to handle money. It includes budgeting and asset allocation tips for “proper” personal financial planning.

But for more and more Americans the American Dream is slipping away entirely. According to the BLS, the monthly take-home salary is about $2500 for almost 70% of working Americans.

A table showing the average monthly salary by sector, from highest to lowest, for 147 million working Americans, many of whom are struggling with personal finance concerns.
70% of Americans Earn less than the Median Wage of $53,400, and the average take-home pay is just $2500 a month

That’s not much to squeak by on, let alone save for retirement. Yet millions of police, farmers, salespeople, healthcare technicians, office workers, and countless others, do! Look at the sectors we’re talking about above; transportation, security, foot service, office, sales – most of the country!

Costs are increasing

Managing personal finances is getting expensive. The average rent for a 2-bedroom in the US is about $1300 a month. Adding in utilities, groceries, a car with insurance, a cheap phone plan, and internet – not to mention kids! Before you know it a 3-person family with 1 working adult is barely able to put any money away.

If you have any debt, just paying the minimum is enough to make it impossible to get ahead. It’s no wonder that almost 80% of people are living paycheck to paycheck!

And with inflation, costs only go up! Most things get 3%-5% more expensive every year – or more!

Personal Finance is mostly not about Saving

Can we budget and penny pinch our way out of this personal finance nightmare? I highly doubt it.

Don’t get me wrong – saving is great. Cut your cable bill, move to a cheaper phone plan. Buy generic groceries.

But saving $15 on your phone bill, or $100 a month couponing, quickly approaches diminishing returns and can require constant participation to maintain. Technically, you can scrimp your way to half a million dollars by saving $100 a month for 55 years, but I don’t want to hate my life like that.

Because your expenses have a floor, you will only ever be able to save so much. Even if you take home $2500 a month, and you somehow miraculously are able to spend only $1500 a month on all your expenses, you’ll still only ever be able to save $1000 a month on your best months.

Increasing your income to $3500 a month has the same net effect as saving $1000 but it allows you to do more – you are spending $2500 a month on living and saving $1000 vs spending $1500 a month on living and saving $1000. Increasing your income to $4500 a month would allow you to save $2,000 a month while maintaining spending at $2500. As you see, there is no ceiling to how much you can earn – only a floor on how much you can spend.

Income is King

Unless you plan on re-training to become a doctor, lawyer, scientist, engineer, programmer, or CEO… if you want to get rich your best bet is to focus on increasing your income through whatever means you are able.

For some, that will mean continuing their career and developing “professionally”. Others will choose to develop other valuable skills and knowledge and leverage that as entrepreneurs. Some may be great at playing the stock or currency markets. In fact, the ways to increase your income are just about infinite and limited only by you. I hope to make that apparent over time.

Join me on this quest to unlock income-generating methods and opportunities. I want to show that anyone can increase their income and get rich eventually, with the right personal finance plan.

Check out my resources page for the best tools to help you increase your income and take control of your finances.