Many frugal people will tell you, that it is against consumption and smart, to live frugally. While I agree that living below your means is absolute necessary to stay out of debt, I tend to disagree that saving money on every little thing is the answer to get rich. Here is why.
Lets say James earns 100$k per year after tax. He lives frugally and can save, say, 30% of that income. That gives him 30$k savings per year. He commutes to his job 1hr per day in each direction to save money on rent, which is approximately 500hrs per year or full 20 days. Now divide this by working 8hrs per day and it gives you full 62 days when you could be working on side income. James comes home and turns TV on.
Now compare this to Johnny, who also earns 100$k per year after tax. He pays for more expensive apartment so he doesn’t have to commute on large distances, but can save only 20% of his income or 20$k per year. But Johnny commutes only half an hour to his job, having 31 extra days 8hrs per day, to work on his side gig and earn extra income. Johnny spends more money, having a nicer apartment nearby office, whereas James spends less to save money. Johnny doesn’t watch TV, he values his time and work on extra income in that time.
At the end of the day, it seems that both save around the same amount of money, but Johnny have higher spending habits and higher quality of life. Both also spend around the same amount of time on working/commuting/watching TV.
Putting things together, it means that Johnny, who doesn’t commute to large distances and doesn’t watch TV, but work in that time, earns extra 41$k per year from side gigs. Frugal James saves 30$ per year, working Johnny saves 61$k per year. Fast forward 10 years, without taking inflation and other things into calculation, Johnny saves extra 310$k in that time.
This is just a rough example on why you should be focusing on earning more, instead of spending less. Busy people like Johnny also don’t have time to spend a lot anyway, as they are busy working and making more money.
Commuting is just one example how you waste your precious time. Same goes for watching TV. Studies show that average person spends 3hrs per day watching TV. That is full 137 working days 8hrs per day, when you should be making money. So ditch your TV.
Frugality is a nice lifestyle idea, but it doesn’t make you rich. Working hard and not wasting time on useless things does. From above examples, we can conclude that only by commuting to your job half an hour, instead of 1hr, combined with not having TV and work in that time, gives you 162 extra working days 8hrs per day, per year. That is 5 months per year of working 8hrs per day.
The key is in working more instead of spending less. You do what is necessary to maintain low costs and focus your effort in doing more work.