What is more important to earn or spend

Which is better: earn more or save more?

Best of all, of course, both.

Sure, but the basic problem remains:

Do you tend to step on the gas pedal (earn more money) or rather the brakes (save more) when building up your wealth?

This is not least a question of driving and lifestyle.

And leads us to very fundamental questions:

How do i want to live How much do i want to work? What am I willing to do for money? How easy is it for me to give up?

And then it’s getting philosophical ...

In this article I will approach the above questions from several angles and try to give some concrete answers ...

Contents overview:

No big leaps with 3,500 euros net?

The trigger for this article was a reader email I recently received. In it, Kai, 29 years old, writes the following to me:

“The income side is little illuminated (you are self-employed and a doctor - an income situation that not everyone has).

I am a (employed) mechanical engineer, I also earn quite well, but also very different from you and also different from many others. For some people, including me, it would certainly help to improve their income rather than savings as a first step.

But maybe I have a mistake in my thinking here. In concrete terms: with around € 3,500 net you can't make huge jumps, but you already have more money available than most (my situation).

You write that financial freedom as a concept is actually difficult to argue - actually more a symptom of dissatisfaction elsewhere. Most people just have an income problem, not just an expense problem.

I feel pretty old at 29, I think I should have started 10 years ago, etc. (I started a year ago). But when I see that I still have 30 years to go, a lot is still possible.

[...] How do you decide what is an expense that you want to make and what not? If I have two children and want to go skiing to Austria twice a year and go on vacation in the summer, it will eat up 10-15 thousand euros.

If you don't do it for investment reasons, you're back in the frugalist corner. So how do you balance that properly?

Because you don't want to do things by halves and be the eternally stingy family man. At least I don't want my children to describe me as stingy at some point. "

I am very grateful to Kai for this email as she four - admittedly luxurious - Problems makes clear to western civilization:

Problem 1: Others have more

"I'm a (employed) mechanical engineer, I also earn quite well, but also very different from you and different from many others."

Kai is addressing a fundamental dilemma for which I unfortunately have no solution:

There is always someone who has more than you.

I'm afraid that - apart from Jeff Bezos - everyone on this planet will have to deal with that.

I know of course what the message behind this lawsuit is:

If I earned (significantly) more, I could also save (much) more!

Could be, but does not have to be.

At least not when lifestyle and material desires grow into the sky in parallel with income.

Basically, of course, you can only save and invest money when the things of daily life (rent, electricity, food, etc.) have been paid for.

But even here a lot of ground can be made up or lost:

Because basic needs such as living and eating can be satisfied both inexpensively (2-room apartment, Aldi) and cost-intensive (4-room penthouse, Edeka).

Don't forget the age

What Kai deliberately overlooks in his comparison: I'm in my mid-40s and therefore around 15 years older than him.

And if it calms him down:

When I was 29, I had (adjusted for inflation!) A few hundred euros less than he did today - despite night shifts and weekend shifts in the hospital.

The next good news: the older you get, the more experienced you are in your job.

And if you do it right, this experience can usually be turned into money very well.

Be it through the career leap as an employee or through entrepreneurial growth in self-employment.

There is a high probability that Kai's salary will rise over the years. And saving with it (theoretically) easier ...

Problem 2: too late

"At 29 I already feel quite old, I mean that I should have started 10 years ago"

Well, 29 is not the age to be annoyed about lost opportunities when building up wealth.

I was at that age - after community service, medical studies and AiP ("doctor in internship" was the euphemistic name for the low-wage phase at the time, in which young interns were fobbed off with around 1,000 euros gross for the first 18 months after starting their careers) - with my late 20s Being able to put money aside for the first time ever.

In other words: 15 years ago my fortune was pretty much exactly zero euros.

(Fortunately, that looks different today)

Of course, the earlier you pursue the goal of asset accumulation, the better - keyword: compound interest effect.

Academics logically enter the race later than non-academics, but with a higher salary they can make up lost ground.

Provided you save ...

Problem 3: How Much Should You Spend?

"[...] How do you decide what an expense is that you want to make and what not? If I have two children and want to go skiing to Austria twice a year and go on vacation in the summer, it will eat up 10-15 thousand euros.

If you don't do it for investment reasons, you're back in the frugalist corner. So how do you balance that properly? "

It is getting interesting now …

First of all: Kai's rough calculation “10-15k for 3 vacations of 4 people per year (including 2x skiing)” could be quite right.

Depending on the demands on the ski area, hotel and food, it would be better to calculate with the upper end of the price range mentioned.

The question, of course, is: really have to two Ski vacations and be a summer vacation a year?

I don't want to evaluate that at this point, but even if you did without one of the two ski holidays ...

... doesn’t even begin to smell for my taste Frugalism - a concept of life that I admit to be rather critical.

Art of living and the savings rate

What Kai describes or what he is ultimately looking for is the art of (happy) life.

Nobody can make the decision for him as to whether he prefers to use his money in the here and now as a bonus or to do something for his prosperity in old age.

Without knowing whether he will even be 60, 70, 80 or even older!

I am sticking to the golden mean path here.

That means: I avoid both the one and the other extreme.

To live only in the future ("I can still have fun as soon as I retire ...") Is just as out of the question for me as thoughtless indulging in the here and now ("Why save ...?“)

In concrete terms, this means: based on my net income, my savings rate is around 25-30 percent.

Not at 60 percent (frugalism at its best) and not even at 5 percent (“consumption trap”).

What is meant here is the savings rate for the long-term Wealth accumulation. In addition, I also save money for short to medium-term expenses (such as vacation).

It doesn't hurt to set aside 30 percent of my income “for later”. Neither does it hurt me to hit the other 70 percent on the head with relish.

Problem 4: Who wants to be a curmudgeon?

“You don't want to do things by halves and be the eternally stingy family man. At least I don't want my children to describe me as stingy at some point. "

That wouldn't be nice, no.

The only question is whether children perceive a life without ski holidays as so full of deprivation that they condemn their father as being tight-fisted for it.

It is much more important that children of well-paid parents understand how privileged they actually are.

That it is no It goes without saying that you should go on a skiing holiday at all. Or travel long-distance as a family by plane.

(The fact that neither one nor the other is so easily possible at the moment is a completely different matter ...)

In any case, my worry that the children take our lifestyle for granted is greater than the worry that they will find them too stingy.

Back to the original question:

Earn more money or save more?

If I had to choose between the two positions, I would use "earn more" every time.


So if I decide to invest EUR 500 more each month in building up my wealth, I would rather think about how I can earn EUR 500 more.

Before I think about how and where I can save an additional 500 euros.

As mentioned at the beginning, this is a question of personal inclination. When it comes to money, I prefer to step on the accelerator than on the brakes.

You may see it completely differently, given.

Attention: gross vs. net

If I want to save 500 euros more, I have to pinch this amount off my net income.

If, on the other hand, I am 500 euros net If I want to earn more, I have to earn around 800 to 900 euros more gross, depending on the tax burden and the social security contributions.

How can you earn more?

Concrete tips make little sense at this point, as the starting point is different for everyone.

But what I can say very clearly:

You will only earn a lot or more if you really do it want.

Sounds like "chakka chakka" from some third-rate motivational speaker, I know.

Unfortunately it is true.

There is no getting around sitting down and racking your brains about how to make more money.

In other words, think and get rich.

Only then will you find suitable solutions.

If you want it then.

In any case, it won't happen by itself.

And when it did, it was pure coincidence. I wouldn't wait for that.

Better is ...

Use your chances

The most obvious way to get more money is your (current) job.

By consistently using the opportunities that will open up here and there in your professional life.

Those who, on the other hand, tend to drift aimlessly, shy away from responsibility or let their "social skills" drag, will either not recognize career opportunities or not even get them.

You just have to be careful that earning more does not go hand in hand with (proportionally) more work ...

The motto should be:

Earn more, but don't work anymore

The goal is to increase your income per hour worked and thus literally become more and more valuable for your employer or your customers.

And no longer knocking hours at the same tariff.

"What is he talking about ?! As if it were so easy ... "

Right, it's not easy. Otherwise everyone would do it.

But that's exactly the point: it just does Not everyone.

Because only very, very few people sit down and talk about themselves, their life, their work, their goals and everything that is connected with them, really think.

Because unfortunately thinking is exhausting. And that's why most of them prefer to leave it.

That has always been the case, but in times of the pandemic it is especially reminded of it.

You know what I mean …

There is a simple method with which you can make provisions for old age and build up a lot of wealth thanks to a return of 6-7% p.a.

  • without to spend significant time on it
  • without to take too big risks
  • without Getting addicted to the bank or a financial advisor
  • without To have to go into debt up to your ears for a property

Click here to read more.

Hello, I'm Holger Grethe, ETF investor and founder of Zendepot! Since 2013 I have been helping private investors to build up their wealth on their own in a time-saving way. You can find out more about me and this website here.