Pivoting Towards Income Growth

A couple of my past posts outlined a number of ways to reduce my food and automobile related expenses.  I now find myself struggling to think of other ways to cut my expenses.  I am having trouble finding additional ways to be frugal in part because I am already a very frugal person.

The truth is that I didn’t just start this warpath at the beginning of June with my very first blog entry.  I have been building up my bulging frugality muscles for a lot longer than this blog might suggest.  I have in fact been reading about personal finance and have putting its tenants into practice for a number years.

Here is a list of frugal activities that I am already doing:

  • I live in a small one bedroom apartment.
  • I minimally furnish said apartment.
  • I drive a nine year old economy car with no power windows or locks.
  • I live as close to work as possible to reduce commuting miles.
  • I don’t buy gadgets or other stuff.
  • I use a pay-as-you-go cell phone provider.
  • I borrow books from the library instead of buying them.
  • I don’t buy or accept gifts for Christmas, birthdays, etc.
  • I volunteer time rather than donate money.
  • I try to drink water in lieu of soda at restaurants.
  • I try to eat at home more than I eat out at restaurants.
  • I don’t pay for cable television.
  • I stopped going to the movies.
  • I drink black coffee instead of those $5 sugary liquid desserts.
  • I pursue no-cost hobbies (writing, hiking, swimming, and frisbee).
  • I exercise in my work’s gym or outside.

I think this list illustrates that I am already living a relatively efficient lifestyle. There really isn’t much more I could do to significantly add to my savings. Sure, there are some crazy things that are at the very least a possibility.  I could sell my car and bike everywhere.  I could move into an RV instead of a regular apartment.  I could cut my last few entertainment sources that cost money (internet and Netflix) in order to focus on writing full-time.  While these major cost cutting measures appeal to me on a number of levels, they just aren’t that practical for me to pursue at this time.

I am writing all of this because the practical side of me realizes that I cannot reach my $100k BHAG by cutting expenses alone.  Focusing on both sides of the equation is ideal, but the obvious fact that is staring me in the face is that I have to develop new income sources in order to reach my goal within the one year time frame that I have allotted.  I need to pivot the majority of my attention towards money making endeavors.

So what is my strategy for growing income? I’m glad you asked…

1. Get a raise at work.  I have been putting a lot of effort into making myself a competitive candidate to be promoted.  I have pushed my management for the most challenging assignments.  I have become a member of Toastmasters and am aggressively working towards my “Competent Communicator” designation.  I also joined a study group in order to pass a test for certification in my field.  I hope that all of these efforts will be “feathers in my cap” that will result in a promotion next year.  

2. Write eleven e-books.  I recently listened James Altucher’s podcast with a guy named Steve Scott.  The guy writes an e-book every single month and has over forty titles with his latest series being focused on habits.  He said he is on track to make $40k in one month.  Doing something similar is appealing to me because I have already invested a lot in my writing and communicating abilities.  I also think there is an opportunity to write e-books for my professional community since it is a pretty untapped niche market that I already know a lot about.  It also might be another feather in the cap to say on my resume “Hey, I’m a published author of e-books on XYZ topics”.  I rather focus on writing about things that are more personally interesting to me, but I think it is important to leverage off of existing knowledge and to focus on where my current effort is to make my life as synergistic as possible since these efforts will certainly fracture my attention and time.

3. Blogging income.  Blogging isn’t going to be the focus of my income generation, but I believe it is necessary for my marketing strategy to promote the e-books series that I intend to write and will maybe provide residual advertising income.  Perhaps the blog can display certain chapters or excerpts from chapters to provide a free taste of the content that will be available in the e-books while the actual e-book would be a deeper perspective providing a much better value proposition for readers.  If the blogging platform turns into a marketing machine, then maybe I can partner with other people in my industry to sell their e-books or training further down the road.

Save Money by Driving Less

bikeOne of the big three expenses in a personal budget is the automobile.  It can be quite expensive to own a car because of all the costs associated with it.  There are fixed costs that remain the same no matter how much you drive which includes things like the vehicle’s purchase price, financing, insurance, road side assistance services, and registration fees.  There are also variable costs that vary with how much the vehicle is used such as with gasoline, maintenance, and depreciation.

The distinction between fixed and variable is important because it helps a would-be saver identify those categories that might offer the most return on effort.  Since I own an older car that is already very efficient, there are few ways for me to save money on these fixed expenses which means that I would benefit the most by focusing my energy on reducing variable costs instead.

Here is the thing though.  The only way to cut those variable costs is by reducing how much the vehicle is driven.  One must dial back on their usage of the vehicle in order to save money. Therefore, I have come up with a few strategies for driving less:

1.  Create a driving budget.  The first step to create a budget for your driving is to figure out how many miles you are currently driving.  You need to know how much you are currently driving just like with any budget where you need to know how much you are currently spending.  I calculated a per year baseline by dividing the total number of miles driven by the age of the vehicle.  In my case, I have managed to put 112,650 miles on the pedometer within nine years.  That is 12,516 miles per year on average (which is an insane amount of time to spend sitting in a car).  It is also a major hit to my wallet.  Approximately $2,500 goes towards gasoline, maintenance, and depreciation expenses every year.  That is about $0.20 per mile.  Once you’ve figured out that per mile metric, I’ve calculated how much money potentially can be saved if I was to reduce my driving by a certain number of miles:

If I reduce my driving by...Then I will save...
3000 miles$600.00
6000 miles$1,200.00
9000 miles$1,800.00

2.  Bike to work.  I have to drive to work about 200 times per year.  Luckily, I chose to live close to work so that my daily commute is no more than 10 miles every workday.  That is about 2000 miles or a $400 cost to me annually.  I could easily save a decent chunk of money, and get a workout at the same time, just by riding my bike into work instead.  That is why my goal from this point forward is to ride my bike whenever it is practicable to do so.

3.  Trip Bundling.  I am not very conscious about my driving.  I have the bad habit of jumping into my car every time I have the slightest craving for something and I don’t give any consideration to how many miles I might be racking up.  I have driven over 20 miles just to buy a cup of coffee more times than I care to admit.  I have also gone on long road trips out of sheer boredom.  This should prove the point that there is some fat in my driving budget that could easily be removed just by choosing not to drive entirely or, at the very least, by trip bundling.  Trip bundling is the idea that one can reduce the number of miles being driven simply by combining separate trips into one optimal trip.  It might only result in cutting a small number of miles every week, but that small figure adds up to a much larger sum over the year.  And all it really requires is being smarter about your driving.

Seven Ways to Save Money on the Grocery Bill


My grocery bill is a disgrace.  Groceries are usually people’s third most expensive budget line item behind housing and automobiles, but groceries are so expensive for me that they are my second where driving my car is third.  My grocery budget is so bad, in fact, that I am certain it is a frugalist’s worse nightmare.  Groceries cost me a whopping $400 per month.  That is about $5k per year just to feed one mouth!

I have been reviewing my expenses for the past couple of months and it is clear that my grocery spending has some fat that must be cut.  So, I have come up with seven strategies for how I am going to reduce my groceries in the coming months.  Based on some highly sophisticated mathematical models (aka rough guesstimates 😉 ), I should be able to save close to $160 per month by following these seven strategies.  This could result in almost $2k in savings within a year’s time if I am successful in following the warpath.

1.  Make your own dollar value meals$30 Savings

Home cooked meals currently cost around $3 on average.  I could reduce my per meal cost to $1 by reducing the number of ingredients in each meal and using more cheap staple foods such as pasta, rice, and beans.  My strategy for saving $30 per month is to turn at least 15 meals into a $1 meal.

2.  Reduce meat consumption$30 Savings

Meat is a costly budget item for me because meat is expensive and, well, I eat a lot of meat.  Let’s face the inconvenient truth: I don’t need bacon with my eggs every morning and I don’t need a meat entree for dinner every night.  My strategy for saving $30 per month is to go vegetarian for 3-4 nights per week and to skip the bacon in the morning.

3.  Drink mostly water$20 Savings

Some canned and bottled beverages cost as much as an entire meal these days and, what is worse is that, the vast majority of these drinks only negatively contribute to our health.  Drinking sodas and other sugary liquids is just a bad habit that should be avoided like the plague.  My strategy for saving $20 per month is to drink mostly water and coffee and to avoid all drinks that come in cans.

4.  Avoid dessert$25 Savings

I have been eating a lot of ice cream and chocolate the past couple of months.  This does nothing for the waistline or wallet except make the wrong one get fatter.  My strategy for saving $25 per month is to turn the weekly ice cream and chocolate habit into a barely existent indulgence.

5.  Cut out unnecessary ingredients $15 Savings

I recently discovered that several of my staple meals include ingredients that do nothing for me nutritionally.  I always, for example, put a couple of slices of American cheese on top of my veggie omelet because I love the taste.  However, there is little nutritional benefit to me to do this and the cost of those slices of cheese add up.  My strategy for saving $15 per month is to remove cheese, tomato sauce, and other extraneous ingredients from all my meals.

6.  Skip a meal once in a while$10 Savings

Sometimes I eat  when I am not actually hungry.  It is a common occurrence to overeat for one meal only to eat a few hours later just because that meal is a part of the three meals per day routine that many of us follow.  My strategy for saving $10 per month is to skip a meal every once in a while especially in those scenarios where I may have eaten a very large meal earlier in the day.

7.  Avoid wastefulness$30 Savings

It is really difficult for me to walk into a grocery store and get exactly what I need for the week ahead.  I usually end up planning too many different meals in a given week which sometimes enables me to be wasteful.  And also there are always those impulse situations where I “should” buy something healthy and I may need that thing “someday” for my pantry.  My strategy for saving $30 per month is to avoid waste by creating a simple meal plan and buying only those things on that list.

Here is my meal plan for next week:

BreakfastEggs, Spinach, Mushrooms, Onion, Green PepperBagel w/ cream cheese
LunchCan of SalmonCan of Soup
DinnerPasta, Olive Oil, Spinach, Garlic, Onion, MushroomBacon, Lettuce, Tomato Sandwich
Snacks3 Apples2 Peaches

My Big Hairy Audacious Goal



In 2008, I graduated college with $10k of student debt and started working a “real job” at a large corporation. With an annual income of $40k, I managed to pay off the student loan debt and sock away a few thousand dollars towards retirement within that first year. Not bad for a personal finance newb.

In 2009, I moved out of my parent’s place and moved in with a roommate.  I made some lifestyle inflation mistakes early on like buying an expensive flat screen television and allowing my restaurant budget to go ungoverned for too many years. In despite of this, I managed to sock away $15k into a retirement account that year and most years thereafter.

In 2011, I borrowed some money from my retirement account to use as a down payment on a condo. To this day, I am still confused whether buying a condo was a smart personal decision. It fortunately turned out being a great financial decision because I bought at the absolute bottom of the real estate market and sold it last year when the valuation rose significantly.

The sale of my condo allowed me to liquidize approximately $100k in equity and appreciation resulting in my first savings outside of a retirement account. I have slowly been deploying this cash into investments ever since. I have invested about half of this amount into peer-to-peer lending and the other half has been sitting idly in a savings account because I am reluctant to put any of it into the stock market while its valuation is so high.

At the beginning of 2014, my financial situation improved even more when I took a job with a new company located in the Washington DC area. This decision was difficult because I had worked for the same company for six years and was leaving behind coworkers that I considered to be friends.  Not to mention that this new job was located several thousand miles away from where I consider home to be.  While it was a hard personal decision, I believe it was a great financial move since my income increased by $10k to $97k and set me up for further promotion opportunities and raises down the road.

As of today, my net worth stands at $242k. Most of this sum is within my retirement account, but about $110k is in my taxable accounts. I do not have any liabilities. My primary source of income is through my job, but I have begun receiving some yield from my taxable investments (non-retirement) as I deploy the windfall from my condo sale.  My expenses have been low due my frugal lifestyle and my lack of a social life.  I project that my current expenses are around $25k annually.  At current income and expense rates, I should add $33k to the war chest in the forthcoming year.

The Goal

I have decided to pursue a major goal in my life.  (Hint: the goal is personal finance related if you hadn’t guessed by the background information.)  I suspect that this goal will be very hard to achieve. It will be a sort of like an endurance athletic event except the challenge isn’t physical. The challenge is more a test of spirit, will and mental strength because it will require sustained discipline, day in and day out for a whole year.

Jim Collins coined the term “big hairy audacious goal” to describe stretch goals that can act as a sort of motivating force in one’s life.  I came up with the idea for this marathon goal because I wanted to dedicate myself to a large project.  I wanted to work towards something that, if achieved, will serve me for many years to come.  Such a goal would plant financial seeds into the land that would grow into trees that bare fruit. Those fruits could be used to buy my freedom to do what I really want with my time such as traveling, spending more time with friends and family, or pursuing a more creative life.

So without further ado…

My big hairy audacious goal is to save $100k in one year. Today is 1 June 2014, and I will do everything in my power short of robbing a bank to save this amount by 31 May 2015.

I’ll be honest. There isn’t much rationale behind how I picked the $100k amount over some other amount.  The primary reason is because it was large enough of a sum to be considered a big hairy audacious goal and yet it wasn’t so outlandish that it would be considered impossible to achieve. Of course, it could simply be the obsessive compulsiveness inside of me that just likes nice round six-figure numbers 😉

At a high level, there are only two ways to achieve this BHAG: increase income and decrease expenses.

My expenses are already very low. I live in a small one bedroom apartment, my commute is within bicycle distance, and I drive an old economy car that has great gas mileage. In other words, I am pretty damn frugal.  I think a lot of people who have made drastic cost reductions like I have mistakenly believe that their budgets might be impervious to further optimization. That is why I plan on doing a deep dive into my budget in the coming weeks to explore creative ways to reduce my expenses even more. I should be able to find at least a couple of ways to save a few thousand bucks in the forthcoming year.

That means that the majority of the savings will have to come from additional income sources since so little will be derived from cutting costs.  I plan on doing this by growing my current income and developing additional income sources.  I hope to focus my efforts on creating passive income streams that will be sustainable in the future and won’t require significant sustainment efforts.  I envision potentially creating some passive income streams through dividend investing and starting a nano business.  I am actually quite excited for this leg of the journey as it has been a dream of mine to start my own business for a while now.

I have no idea whether I am going to achieve this goal or not.  Whether success or failure is in store for me, this blog will document my progress in real time.  I will describe my strategies for decreasing my expenses and increasing my income, the struggles and successes along the way, and try to be as truthful about the sacrifices that I am making in the pursuit of this goal.

Thank you for following along with me on this Warpath to Freedom!