EP#27 - How You Actually Get Rich. Cutting Down Spending and Increase Earnings - All About Entrepreneurial Minimalism

In this episode we talk about the importance of cutting back your spending, and some techniques to help you manage your personal finances better. 

WARNING: We are no money saving experts, but Luke has to save money out of necessity and Alex has learnt a lot over lockdown.

The difference between your income and your outgoings determines how financially free you are. The closer your spending and earning are to each other, the more likely you are to be stressed about money. 

The goal in becoming wealthy is for your income to far surpass your outgoings, and then to reinvest that money so that it compounds.

We try and dissect the problems most people like us face (because we have faced them), and explain some things that we have done to try and cut back.

Items to drastically cut back spending on - Clothes, Alcohol, Luxury items, Electronics, Fad hobbies, Geek merch, restaurants, hotels, furniture, any self care -nails, hair, massage. Remember - Trying to look rich is your worst enemy. Also to note - You can only cut your spending a finite amount (earnings - basic living expenses); whereas earning potential is infinite. Try to break down your life into a few fundamental things that make you happy and try to focus on those. Stop spending money on dumb shit you don’t need - Gary VeeTry to think of a pound spent to a pound earnt. Think logically about what your purchasing. When you’ve spent a lot of time looking at products online you start to see them for what they are. Try to see spending as an addiction.Think about your purchases as whether they are an asset or depreciating assetDon’t buy new things, buy second hand things.Try to imagine putting off a short term reward for more meaningful, valuable future. Track your spending with a spreadsheet or a banking app, because the results might scare youLower your outgoings costs - move to a lower cost country and maintain earnings. Right now is a big opportunity for this.