Earn More, But Don't Upgrade Your Lifestyle

The common pitfall most rising entrepreneurs and creatives fall into.

At the moment, my business generates a sizeable chunk of money every month. And when I open up my bank balance to see more money than any twenty-year-old really knows what to do with, I start dreaming of all sorts of possibilities.

So in January, I did what most people do when their earnings increase. I booked myself a meeting at a local Audi dealership, sat down with a sales representative and priced up the A1 I’d decided I was going to buy. Seconds away from signing the paperwork, that voice of reason we tend to ignore chimed in. On what planet is this a sensible decision to make?

In that instant, I changed my mind. I told the representative that, on second thought, I’d go home and think about the purchase some more before making a decision. And the more I think, the more I now realise how close I was to financial suicide.

See, upgrading our lifestyle as our earnings increase is the very trap most of us fall into. We get a raise at work, so what do we do? We mortgage a more expensive house. We sell more courses this quarter than we did last quarter, so we buy ourselves a fancy new watch and lease a car. In doing so, we think we’re becoming financially free when in reality, we’re preventing ourselves from ever attaining that freedom we so desperately seek.

You will earn more money as your career advances. That’s a given. But if you spend that money as soon as you earn it, you will forever remain poor. Only when you learn to reinvest that money wisely, save it appropriately and refrain from lucrative purchases will you truly become financially free.

I’m going to pass on the Audi for now. My beaten-up Peugeot 108 will do just fine. It gets me from A to B, and that’s precisely what a car was built to do. By abstaining from luxury now, I know that I’ll reap far greater rewards in the future.

The lesson? Don’t commit financial suicide by making ego-based monetary decisions. You don’t need an expensive car to look cool. You don’t need a Rolex. You don’t need nicer clothes.

What you need is to keep your head down, focus on the work, and that work will pay off tenfold for the rest of your lifetime. Trying to look cool is for losers. Don’t be a loser.