Stepping Over Dollars to Pick Up Pennies

It’s a recurring theme here on the blog, to discuss the merits of increasing your income steadily.  There is a lot of sound financial advice out there; including “stay out of debt”, “pay yourself first” and “live below your means”.  But, one piece of financial advice that often gets neglected is to “invest yourself to increase your income”.

One reason this advice may not be so popular, is because it may appear self-serving to some people.  But, income is one of the key pillars of sound financial planning.  And, it is critical for meeting life’s necessities as well as meeting your financial goals.  So, here are some reasons you should be planning to increase your income steadily.

Oliver Twist

Never Limit Your Income

I bargained with life for a penny
And life would pay no more
However I begged at evening
When I counted my scanty store

For life is just an employer,
He gives you what you ask,
But once you have set the wages,
Why, you must bear the task.

I worked for a menial’s hire,
Only to learn, dismayed,
That any wage I had asked of Life,
Life would have willingly paid

– Author Unknown

What this Poem Meant to Me

I first read this poem almost 20 years ago.  Until then, I was content with my meager salary, even though I knew I was underpaid.  And I lived a happy life, even though I wasn’t able to achieve many of my financial dreams.  After reading this poem, I was no longer willing to settle for less than I was worth.  I realized that I worked very hard and I deserved a fair income.  Much to my amazement, life was willing to pay me a lot more.  I simply had to ask for it.

Is it Wrong to Want More?

I’ve noticed some people are very judgmental when it comes to income.  They act as if it’s noble or virtuous to live on less and selfish or greedy to want more.  I don’t subscribe to this kind of scarcity thinking.  Nor, do I think it is right to cast judgment down upon the incomes of others.  As long as someone is legally and morally creating value which supports their high income, they are rightfully entitled to it.

Except for some in the legal, political and financial professions, income isn’t a zero-sum game.  You don’t have to take money away from others to create income for yourself.  You can create jobs, create products and create opportunities for others, which also generate income.  You can choose to be a wealthy person of high integrity, much like Warren Buffet.  And, you can employ your wealth to help others who are less fortunate, much like Bill and Melinda Gates.

How Much is Enough?

For most of my adult life, $100,000 per year was my magic number.  I always felt this was an attractive amount that would allow me to lead a comfortable life and help others along the way.  Inflation has diminished the purchasing capacity of $100K over the past 20 years, but this remains a fond and familiar goal of mine.

Lately, I have begun to realize that it’s silly to worship this milestone of $100K in annual income.  If I am fortunate enough to reach this goal, it will happen because I am producing more value than I am right now.  It’s not that I want or need more income to live on.  But, I have come to realize I could do some wonderful things with the excess.

The Magical Powers of Income

As an Investment –What investments have you made in your income?  Chances are, the less you have invested in your career, the less income you receive.  You can easily get an entry-level job and make the minimum wage.  If you invest the time to learn a trade, you will be paid the wages of a skilled laborer.  If you invest in college and get a degree, you will receive a professional salary.  If you invest in a business, your income is not limited to wages.  The key is in understanding that you have some control over your income.  And, you must invest in yourself, if you wish to increase your income.

As a Resource – What is the number one cause of stress and divorce in America?  The answer is money problems.  Unfortunately, a high income won’t solve money problems.  In fact, it often creates problems.  Like most other valuable things in life, income is a resource that must be managed wisely.  If you save a good percentage of your income, you will have a nice cash reserve to cushion any problems.  If you increase your debt and payments to match your increasing income, you may be headed for disaster if your income is ever reduced.

As a Foundation – I have set a future goal to donate 10% of my net income to various causes.  And, if my income increases steadily in the next few years, I may be able to increase this to as high as 20%.  Many tithe to the church or help family members who are in need.  Others help their children through college.  Whatever your cause, raising your income can build a foundation for the benefit of others.

The Bottom Line

The bottom line is that income is simply a tool to meet your financial goals.  Just as a bigger hammer will pound nails faster, a bigger income will help get you out of debt or fund your retirement faster.  Excess income can always be used for a benevolent purpose.  So, don’t be afraid to pursue a larger income, as long as it doesn’t come at the expense of your family or your lifestyle.

“And I say unto you, Ask, and it shall be given you; seek, and ye shall find; knock, and it shall be opened unto you.”

New Testament – from the Sermon on the Mount

Recommended Reading

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7 comments to Stepping Over Dollars to Pick Up Pennies

  • I think we often focus on income too much but you bring up a good point: some people neglect the income side of the equation. Instead, they just focus on saving, investing, & eliminating debt as if you couldn’t do all of these things quicker if you had a larger income.

  • Great post, Bret! I love that poem and had never seen it before, thanks for sharing!

  • zud

    i haven’t made many serious financial mistakes in my young-ish life. i, too, felt my earning power was/is limited and thus i’ve focused on the saving/investing part of the equation primarily because i’ve found this easier to do and control. i can’t make law school or teachers college accept me but i can control where i invest my money, how much i spend and how much i save.

    i have made serious mistakes in my career choices and while there are a myriad of PF blogs and articles on how to fix the spending/saving/investing side of things there’s virtually no info on good career decisions and fixing a broken career. just wondering if you might do a blog post on anything you’d do differently with your career or advice for ppl stuck in low paying jobs. other than “ask for a raise” 😉

  • Nellie

    Thanks for sharing. I have always tried to live within my means yet in today’s taxation mania, I keep falling short. The banks, gov’t, billionaires have been head of the game; no doubt agreeing to disagree. I am determined to regain sanity as well as financial freedom. Not to be over the top – just above water will be satisfactory. Can wait to read more on this site.

    • Nellie,

      Yes, it’s sad the way real wages are stagnant for working folks, while the rich are making obscene money and the Government is bankrupting our nation. Government at all levels are grasping desperately for more revenue, while continuing to waste mountains of money and refusing to cut their exorbitant perks and pet projects. It almost makes me want to cash out and move to a tropical island, which is what my Dad did.

      However, try not to be discouraged by all of this. One financial setback with your taxes isn’t going to change your financial life. This is just an annoying little blip on a long journey towards prosperity. If you keep doing all of the right things, you will wind up in the right place. Keep the faith.


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