When it comes to money decisions, it can be hard to figure out the right thing to do. Money is about power, emotion, morality and security, among other things. So in this space, we gather a few experts to weigh in on a financial quandary.
This week’s question: Should you focus more on boosting your income or building your assets?
Robert Kiyosaki, author of Rich Dad Poor Dad and Second Chance: “When you work for income via a paycheque — even high and/or steady income — that income stops when you stop working. It’s you working hard for money for a lifetime. When your income — or a part of your income — comes from assets, it’s like having your money work for you 24/7 instead of you working for money and typically paying higher and higher taxes as your paycheques increase in size.
“While there isn’t anything wrong with working for a paycheque, it probably isn’t the best road to creating the wealth and peace of mind that so many overworked, super-stressed and stretched-to-the-max [people] sorely need. Investing in assets, even in small ways, can build wealth and deliver a lifetime of income even if or when you stop working.”
Sheila Walkington, co-founder of Money Coaches Canada: “Your ability to earn an income is your biggest asset, so focusing on boosting your income or at least maintaining your ability to earn a good income and keeping yourself employable is very important. Increasing your income will open up more opportunities to save, pay down debt and to build the life you want.
“But earning more money is not always the answer. Often the more people make, the more they spend, and this can get people in trouble. So the key is to live within your means while also building a financial foundation for a comfortable future/retirement.”
Preet Banerjee, author of Stop Over-Thinking Your Money!: “If financial success was all about increasing income, then celebrities, athletes, doctors, and other high earners wouldn’t have any money problems. Of course you should try to boost your earnings, but the truth is we don’t have as much control over that as we do on what we do with what money we earn.
“Focus on the fundamentals. Whatever you earn, spend less than that. Building assets like investment portfolios and home ownership gives you a base to work from in case any risky pursuit of a higher-income-at-all-costs strategy doesn’t pan out. Once you’ve laid the foundation, then you can focus on expanding your income through less traditional methods. Getting rich slowly tends to work better than always swinging for the fences, with the possibility of striking out.”