Somehow we have completely lost our way when it comes to our finances. We are so fixated on what comes in, that we have no attention left to spend on what goes out. Yes, I’m talking about income. I’m taking about the endless conversations around “How much do you make?” Or “How much did you make last year?” All the while, the real question that we should be asking ourselves and one another is, “How much do you keep?”
Wrong: How much do you make?
I’m not going to waste time trying to explain that the amount of income you produce has nothing to do with how much you save. You can, and many do, make the US median income of $68,000 and save way more than someone making $250,000. I know, you don’t believe me. You have a long list of excuses. I get it. I have mine too. But at the end of the day, fixating only on how much we make will never lead us to wealth.
Income is only half the battle. It sure as heck isn’t everything. And even if you nail the income piece of the puzzle, you are no closer to saving money if you stop there.
Right: How much do you keep?
I’m not going to pretend like I go around asking my close friends and family how much they keep. But, I probably should be. I will say, my friend Jordan and I do talk percentages which prevents any kind of awkwardness or insecurity about differences in income or expenses.
Fact: Life isn’t fair. People have situations that limit their ability to produce income as well as procure income.
But, my challenge is this: Care as much about how much you’re keeping as you do about how much you’re making. It (literally, actually) makes no cents to care about how much you make with no regard to how much you keep.
I could go on and on about this but I’ll shut up because the point here is simple. The name of the game is buying assets. It’s not income. It’s not ridiculous frugality living life in a closet eating ramen. It’s the Jedi level balance of enjoying life while keeping for yourself a portion of what you earn.
If what we keep is all that matters for attaining wealth, why not start the conversation with our spouses, friends, and family about how much we are keeping? I dare you to have this conversation with someone. Remember to use percents if the actual number is awkward.
A conversation around the percentage of your income that you keep drastically levels the playing field. And that’s because delaying gratification is SO hard whether you make $120,000 or $60,000 a year. And remember, since the median savings account balance is a whopping $5,300, even if you’re only keeping $6,000 a year, you’re kicking most of the country’s ass.
So, how much do you keep?