Many people wonder how being frugal and wise with money can lead to financial success. Here is a look at three reasons your financial success hinges on your being frugal with your money.

Being Frugal Significantly Boosts Your Opportunity

You, like many others, may have been listening to investors and businessmen claiming not to limit yourself to the frugal mindset – that you shouldn’t sacrifice and need to build your wealth. They are trying to tell you to think outside the box – to focus on your income, not just your savings.

Would you believe that they’re right?!

It’s income that establishes the path toward wealth and financial freedom. You have to build more streams of income over time.

However, what the guru investors forget about when telling you to pay attention to your investments and earn more is that losing your full-time, average paying job means being unable to seek greater opportunity. You just cannot do it when you don’t have the money to do this with.

In this case, being frugal isn’t something you can do; it’s something you have to do.

Say, you earn $55,000 a year. If you were offered a position that gave you a plethora of opportunity for a bit of time but led to a short-term loss in pay and benefits, is this something you’d take.

In the beginning, there was no way I could do that. There were bills to pay – rent, car, cable bill, Internet, etc. A year or so later, when I was presented with an opportunity, I quit my job and did what I mentioned above.  Why was I able to do that? I did it because I was frugal; I lived below my means and saved myself a ton each paycheck. I was able to take a chance on my startup and go after my dreams.

You can’t keep up the frugal lifestyle in the long scheme of things, especially if you’re dependent on that employer income you have coming in. Taking risks is not a necessity. And, scaling back on your income is difficult to do when you’re unable to take risks.

If, however, you can live on less income than you’re currently making, you open yourself up to a work of opportunities. Many call this luck. These opportunities do include business prospects that provide a short-term sacrifice with a big long-term gain.

Is your spending under control, so that you can take advantage of opportunities that present themselves?

Being Frugal Doesn’t Impact Your Lifestyle As Much As Setting Up A Business

It’s funny to hear people see frugal people are sacrificing and not living life to the fullest. Then, they say something along the lines that they wish they could save more money but would rather have fun and do things with the family.

It’s this kind of argument that leaves many in bewilderment. How can they say that financial security and family time are important things in life but think being frugal endangers their lifestyle?  I just can’t see it!

Think of it this way:

You’re working 50 hours a week at a $50,000 a year job. You spend most everything earned and live paycheck to paycheck.  You also work at a place that doesn’t like the idea of you freelancing or trying to be an entrepreneur.  For people in this scenario, there are only two instances where they can earn more money.

• After work – when they should be spending time with family and friends.
• Sleeping – they can work on other projects when they should have been resting.

The reality is that earning money during these times is difficult. You will work harder and longer on a side business that will be extremely intrusive in your life than reducing the physical amenities.

For me, I was able to find a new job that was closer to home and then move to a new home that was even closer to my new job. I was able to spend less time commuting and more time earning money.  The approach led to more wealth – both in money and time. That’s compared to me working for Uber after work or developing a website from the ground up or any of the like. Each of these things were difficult to do and generated taxable income. Not of them were fun either.

Today, I bike to work. This is free, fun and healthy. It doesn’t impact my life negatively at all. There’s no traffic jam to sit in and I get exercise. Biking to work and back can be fun.

Where does “sacrifice” work for you? If you think cutting back on your spending will hurt your lifestyle compared to other ways in which to earn money, then you’re not thinking smart.

For example, you may detest the idea of biking, but you love eating out and living in your nice apartment. However, look at in this light: Has it been easier to create a business with a nice income or become happy with a bike commute, healthy lunches and a rent payment that’s two times less than what you’re currently paying?

Which one appears to give you more recreational time and some financial footing?

If you believe you can build a business that generates thousands of dollars every month while you’re currently living, you may want to revisit that thought.

Just Because You’re Frugal Doesn’t Mean You Can’t Earn More Money

I had this silly notion in my head that being frugal kept me from being able to earn more and attaining great returns. How ridiculous is that?! The reality is that this was far from true.

Rather than trying to start a side business and invest with nearly nothing, I began amassing thousands of dollars that would allow me to invest. Before I knew it, I was amassing thousands and thousands of dollars that enabled me to be even more serious about my investments. Before I know it, I should have even more money to invest in.

This is not in regards to employer match of my IRA or an emergency fund, which is something everybody needs to have regardless of their goals.  This is actually up the build-up of liquid capital that allows you to make purchases such as real estate investments.

If you’ve decided to become serious about establishing wealth, you have to earn more and don’t spend as much. There are only three key ways in which you can build your wealth, provided you have no assets to invest in currently.

• You save and earn the same.
• You earn more and spend the same amount.
• You spend less, but you earn more.

If you were to look sensibly at these approaches, you’d see that the second option is the craziest. Why earn more just to spend it. If you’re going to enter the investment market with little assets, you need to make wise use of your time and money. The second option is far from giving you that ability.

Earning after-work money from scratch tends to have the biggest negative impact on a lifestyle and offers very little help in your financial position. After six months, you’ll give up and you’ll have to pay more in taxes.

For me, it was easy to take the money I was earning and use it toward investments that improved my life and lifestyle. It allowed me to purchase real estate, so no longer was I thinking about becoming an entrepreneur. I was an entrepreneur.

What You Need To Keep In Mind

Don’t forgo the frugality frame of mind, thinking it only benefits a few. This article was geared toward full-time employees that wanted to do something better for their life. These are the folks that often live paycheck to paycheck with nothing to show for it at the end of the day.

Many people believe being frugal from the start is the quickest way to attain a plethora of wealth and boost their investment and income opportunities. For them, it’s the ability to attain wealth without cutting into their lifestyles. So, how does building wealth occur?

• You amass a plethora of capital repeatedly
• You invest the capital at higher returns

Employees with very little assets have many ways in which to build wealth. They can focus on investing or establishing other streams of income after working hours at work.  It’s possible to hear positive aspects about these stories, but they are far and few between.

Why work that hard and not enjoy the fruits of your labor that don’t improve your life quality? If your goal is to live a comfortable lifestyle, why work long hours after you’ve already worked long hours? Instead, focus on another method of living comfortably by focusing on saving what you have already.

If you want to live a comfortable life that gives you some free time and allows you to control your destiny, you should consider living frugally. Reduce the expenses you have currently and work on building your wealth.