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Which is better: earning more money or saving more?

Which is better: earning more money or saving more?

Preferably both, of course.

Sure, but the basic problem remains:

When it comes to building wealth, do you rather step on the gas (earn more money) or on the brakes (save more)?

This is not least a question of driving or lifestyle.

And it leads us to some 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 do without?

And it’s already getting philosophical .


In this article, I approach the aforementioned questions from several angles and try to give some solid answers .


No big jumps with 3,500 euros net?

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

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


I am a (salaried) mechanical engineer, earn quite well, but also quite differently than you and also differently than many others. For some people, myself included, it would certainly help to improve the income side instead of the savings side in the first step.

But maybe I have a mistake in thinking here. So concretely: with about 3,500€ net you can’t make huge leaps, but you already have more money available than most (my situation).

You write that financial freedom as a concept is actually difficult to argue with – in fact, it’s more a symptom of dissatisfaction elsewhere. Most people just also have an income problem, not just an expense problem.

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

[ …] How do you decide what is an expense you want to make and what is not? If I have two children and want to go skiing in Austria twice a year and go on vacation in the summer, that certainly eats up €10-15T.

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

Because you don’t want to do things by halves and be the eternally stingy family man. So at least I don’t want my kids to describe me as stingy at some point.”

I am very grateful to Kai for this mail, as it illustrates four – admittedly luxurious – problems of Western civilization:

Problem 1: Others have more

“I am a (salaried) mechanical engineer, earn quite well, but also quite differently than you and also differently than many others.”

Kai addresses here a fundamental dilemma for which, unfortunately, I have no solution either:

There is always someone who has more than you.

I’m afraid that – apart from Jeff Bezos – all people on this planet have to deal with this.

Of course, I know what the message behind this complaint is:

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

Could be, but doesn’t have to be.

At least not if lifestyle and material desires grow sky-high in parallel with income.

<p>In principle, of course, you can only save and invest money once 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-intensively (4-room penthouse, Edeka).

Don’t forget age

What Kai deliberately overlooks in his comparison: I’m in my mid-40s and thus about 15 years older than he is.

And if it calms him down:

At 29, I had (adjusted for inflation!) a few hundred euros less net out than he does today – and that despite night shifts and weekend shifts at the hospital.

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

And if you do it right, you can usually turn this experience into money.

Be it through a career jump as an employee or through entrepreneurial growth in self-employment.

It’s highly likely that Kai’s salary will increase over the years. And saving money will (theoretically) be easier …

Problem 2: Too late

“I feel pretty old at 29, I think I should have started 10 years ago.”

Well, 29 is not an age to get angry about missed opportunities in wealth accumulation.

At that age – after civilian service, medical studies and AiP (“Arzt im Praktikum” was the euphemistic term for the low-wage phase at that time, in which young interns were fobbed off with around 1,000 euros gross for the first 18 months after starting their careers) – I was in a position to put money aside for the first time at the end of my 20s.

In other words, 15 years ago my assets were pretty much zero euros.

(Fortunately, that looks different today).

Of course, the earlier one pursues the goal of asset accumulation, the better – keyword: compound interest effect.

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

Provided they save …

Problem 3: How much should one spend?

“[ …] How do you decide what is an expense you want to make and what is not? If I have two children and want to go skiing in Austria twice a year and go on vacation in the summer, that certainly eats € 10-15T.

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

Now it gets interesting …

First of all: Kai’s rough calculation “10-15k for 3 vacations á 4 persons per year (including 2x skiing)” could be good.

Depending on the demands on ski resort, hotel and food, he should probably better calculate with the upper end of the price range mentioned.

The question is, of course, does it really have to be two ski vacations and one summer vacation per year?

I don’t want to judge that at this point, but even if one did without one of the two ski vacations …

…that doesn’t even begin to smell of frugalism to my taste – a concept of life that I admit to being rather critical of.

The art of living and the sp


What Kai describes, or rather what he is ultimately looking for, is the art of (happy) living


No one can take away from him the decision whether he prefers to use his money in the here and now as a gratuity or to do something for his prosperity in old age.

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

I stick to the path of the golden mean here.

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

Living only in the future (“I can still have fun once I’m retired …”)


just as out of the question for me as mindlessly wallowing in the here and now alone (“What’s the point of saving …?

“) In

concrete terms, this means: in relation to net income, my savings rate is around 25-30 percent


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

What is meant here is the savings rate for long-term wealth accumulation. Beyond that, I also put money aside for short- to medium-term expenses (like vacations).

It doesn’t hurt me to set aside 30 percent of my income “for later.” Likewise, it doesn’t hurt me to enjoy splurging on the remaining 70 percent.

Problem 4: Who wants to be a cheapskate?

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

It wouldn’t be nice, no.

The only question is whether children would find life without skiing vacations so depriving that they would condemn their father as a miser for it.

It’s much more important that children of well-off parents understand how privileged they actually are.

That it is not a matter of course to go on a skiing vacation at all. Or to travel long distances as a family on an airplane.

(The fact that neither the one nor the other is so easily possible at the moment is another matter entirely …).

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

Back to the initial question:

earn more money or save more?

If I had to choose between the two positions, I’d take “earning more” every time.


So if I decide to put 500 euros more into wealth accumulation each month, I’d rather think about how I can earn 500 euros more.

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

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

You may have a completely different view, but that’s not a problem.

Attention: Gross vs.

net If I want to save 500 euros more, I have to subtract exactly this amount from my net income.

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

How can I earn more?

Specific tips don’t make much sense at this point, since everyone’s starting position is different.

What I can say quite clearly, however


You will only earn much respectively more if you really want it.

Sounds like “chakka chakka” of some third-rate motivational trainer, I know.

Unfortunately, it’s true.

There’s no way around sitting down and thinking hard about how you can make more money.

In other words, think and get rich.

Only then will you come up with suitable solutions.

If you want it.

In any case, it will not happen by itself.

And if it does, then it was pure chance. I would not wait for that.

Better is .


Use your chances

The most obvious way to get more money is your (current) professional activity


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

On the other hand, if you tend to drift aimlessly, shy away from responsibility, or let your “social skills” slide, you will either fail to recognize career opportunities or not get them in the first place.


only thing you have to watch out for is that earning more doesn’t go hand in hand with (proportionally) more work .

.. The

motto should be:

Earn more, but don’t work more

The goal, then, is to drive up one’s income per hour worked and thus literally become more and more valuable to one’s employer or customers


And not to knock out more hours at the same rate.

“What is he talking about?! As if it’s that easy …”

That’s right, it’s not easy. Otherwise, everyone would do it.

But that’s exactly the point: not everyone does it.

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

Because thinking is unfortunately exhausting. And that’s why most people prefer not to do it.

This has always been the case, but in times of the pandemic, it is once again brought home to us in a very special way.

You know what I mean …

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