Cutting Costs Alone Won't Get You What You Want

Cutting Costs Alone Won't Get You What You Want

By Shmuel Shayowitz

In personal finance and wealth-building, cutting expenses alone often isn't enough. For many, the key to achieving financial freedom lies in "expanding your options." Whether you dream of escaping a job that drains you or simply looking to fund a few luxuries - creating additional revenue sources can be transformative.

Take a client of mine as an example. He is well-compensated in his current role, earning a six-figure salary, but he's unhappy with his job and dreams of starting his own company in a related field. His question to me: Should he abandon the safety of a steady paycheck or take a leap into the unknown? The reality is that leaving a guaranteed salary isn't a decision to be made lightly. However, staying in a job you dislike while never pursuing your passion can be equally damaging.

For many, the solution is often a more measured approach. I suggested that rather than quitting outright, he could keep his job while building his side business in the evenings and on weekends. Yes, it will mean longer hours and more sacrifices, but this approach ensures that his financial base remains secure while he builds his dream. Once his side business generates enough consistent revenue, he'll have the confidence to transition to full-time.

Sometimes, though, the need for extra income stems from a more immediate desire - such as affording a new car lease. A friend of mine faced this dilemma. He was tired of driving an older and very beat-up car but balked at the thought of an additional monthly payment of $500–$750. Rather than shelving the idea or straining his budget, I suggested he explore a side hustle to cover the cost. A few months later, he shared how he had started consulting as a freelancer, working just a few hours a month to offset the payment. This simple step not only funded his new car but also gave him a new sense of financial empowerment.

Another effective way to generate additional income is through real estate investing. Unlike active hustles, real estate offers an opportunity for passive income. Owning rental properties or investing in real estate syndications can provide a steady cash flow stream without the constant demand of traditional side gigs. It's an excellent option for those who prefer a hands-off approach or those with already demanding schedules.

Last month, I helped clients buy their first investment property. In April, they attended one of my real estate investment workshops and were extremely anxious to get into real estate investing. They had two major concerns – the first being that they didn't have any disposal money to invest, and the second was that they had no clue as to what to do. The second part was easy as I introduced them to a great Realtor and Attorney whom I have worked well with in the past for first-time investors. Coaching them with the proper team in their corner was very easy.

As for the lack of money… we needed to get creative. It turned out that they had a ton of equity in their house. We discussed the pros and cons of using a HELOC for investing, which I don't take lightly. I got them a line of credit, just in case, which made all the sense in the world, as you only pay interest if you actually use the funds. A few short months later, they found the perfect investment property. After all expenses, including the cost of the HELOC, they would be netting over seven hundred dollars per month. That was before any rent increases and the additional income they could generate from ancillary opportunities within the property. I was so happy for them.

Opportunities for extra income are often closer than we think. Freelancing, consulting, selling a skill online, or leveraging assets like real estate can help bridge the gap between where you are and where you want to be. It may require effort and sacrifice, but the rewards … financial stability, new opportunities, and the ability to chase your passions - are well worth it.

If you're feeling stuck or constrained by your current financial situation, challenge yourself to explore alternatives. You might just discover that the path to greater freedom lies not in drastic change but in creative ways to increase revenue income streams.

PS - I would like to end by adding that IT STARTS with good budgeting and being mindful of your expenses. That is first and foremost and should never be overlooked or underestimated before seeing how to add to and enhance that!