After you increase your income don’t only spend the difference
If you make more money than you used to you will also probably spend more.
I believe that most people would agree.
It’s easy to understand why this happens, we as human beings are extremely dependent on habits and routines.
You need to establish a strong enough purpose to motivate you to break out of your old habits.
You also need to realize that spending would not the problem if you were earning enough income.
To build wealth you need to change the way that you earn money and how you spend it.
Most people, myself included, currently collect money by trading their time or skills for money.
This is not how you build wealth though.
Wealth is created when you use your money to buy assets that generate income for you.
Who would you rather be? The hotel manager who is paid $1,000,000 a year for working for the hotel or the part owner of the hotel who also makes $1,000,000 each year.
They each make the same amount annually but clearly one is wealthier than the other.
So don’t spend the difference after you increase your income. Invest it to increase your income.
Become a landlord, or shareholder, or business owner. Passive income is the target.
Find the vehicle that works best for you based on what you are good at.
Once you develop a passive income flow you can reinvest or use those funds to establish another income flow.
In my own life
This is the step that I am currently working on. With my wife and I both working now, our income has increased and we are still focused on how we can earn more money.
Since we have increased our income we have been celebrating a little bit too much and probably spending most of the difference.
Now it’s time that we focus on saving a larger percent of our recently increased income.
We are going to try to cut back on our spending and focus on paying down our debt and saving so that we can start investing for income again.