You Cannot Shrink Your Way To Wealth

Making coffee at home in the morning isn’t helping you move forward.

Image for post
Image for post

When you seek financial advice, you’re often initially met with the most basic and obvious suggestions, such as the most popular one of all, “make your coffee at home and take it with you to work.”

Pieces of non-advice like these usually involve cutting corners or reducing expenses to such a minimal degree that it would barely make a difference, especially when all of the effort and self-control that you’d have to exert to achieve them is taken into consideration. If the option is to deprive yourself of every small luxury in life to make an extra $100 payment on your student loan balance, the benefit usually doesn’t outweigh the cost.

Yes, there’s real math behind the idea that the $5 you spend each day on a latte could yield a small to moderate return if invested wisely and for a length of time. There’s no question we should be taking compound interest — and budgeting—seriously.

But if you’re really interested in building wealth, skipping a coffee in the morning isn’t going to get you there. You need to start asking yourself how you can get to the point where you can afford as many coffees as you want. That is the mental shift that actually changes your life.

You cannot shrink your way to wealth.

When your first response to needing more cash flow is to cut expenses, you’re turning off the part of your brain that needs to be fired up and strategizing ways to change your entire financial picture.

It pains me to have to reiterate for those who will want to be contrarians that of course, budgeting is essential, and yes, most people live outside of their means, and no, a coffee from a shop each morning is not a necessity, and yes, the little things certainly do add up.

But when we’re talking about big, sweeping, lasting financial change, the conversation needs to be less about how to deprive ourselves of every last creature pleasure imaginable and more about how we can expand and diversify our income so that we’re being paid fairly, we’re capitalizing on everything we can, and ultimately, we can live the way we really want to — $5 lattes and all.

Limitation breeds creativity.

In the case of financial abundance, creativity is fuel.

When you begin with a dollar amount that you need to support the life that you want, then you start a really important mental shift. You start breaking down what you need annually into what you need monthly, and then you start imagining where you could create that income on a week-to-week basis.

Could you start that new business? A side-gig? Does it make sense to stay in the position you are in, or work for yourself? Is it time to start looking into higher positions at your company? Where could you build a passive monthly income? How else could you invest your cash — if not just in stocks — for quicker and larger returns? These are the questions that need to be asked, not whether or not you’ve called your phone company to negotiate a few dollars off of your bill. It’s not that vigilance isn’t important — nobody should be wasting unnecessary cash each month.

However, when you decide how you want to live, you can then figure out a way to fund it. The opposite way around never really works.

In fact, some financial experts suggest that all of your money needs a designated purpose. (This is the mentality behind zero-based budgeting.) It works because we are generally less motivated to earn or create more when we don’t know what we’re going to do with it. However, if our financial goals look more like this…

  • Start a business to pay off student loans in 2.5 years.
  • Invest in a rental property to have another income stream for retirement.
  • Take on a side-project to fund a dream vacation.

… Then we’re going to be much more motivated to achieve it.

The idea that all of your financial problems will be solved if you learned to budget a little better or shop a little more wisely is insulting, and it’s advice that’s more often given to women than men.

When men seek financial council, they learn about ROIs and compound returns. When women seek it, they’re often met with how to clip coupons and make your own all-purpose cleaners at home. (Though healthier and more eco-friendly those may be.)

Trying to micro-manage our small indulgences sorely overlooks the larger, more overarching financial problems that people face. There are far worse decisions that result in long-term financial drain than a hot beverage in the morning, and those include but are not limited to high car payments, fast fashion, expensive educations, oversized housing, and so on.

Changing our individual picture isn’t going to solve the overarching, structural problems at work. However, our individual choices do eventually lead to a tipping point if enough people start making change. The simple act of proving to your peers that you do not need to keep chasing status symbols can create a ripple effect in your circle that can compound. We see it happen all the time — movements begin at the grassroots, and this should be no different.

But no matter how much change we are capable of making, it won’t change the fact that we inherited the (generational) financial landscape that we did. We are in the situation we are in, and so now our power comes from how we are going to respond. We have to take control of our financial futures because even in the best case scenario, nobody is going to do it for us, not completely.

This is where education comes in. I quadrupled my income in the past half decade just by learning some really basic money principles. Basic knowledge is the foundation of moving your life forward. Simply learning about diversifying income streams, how to invest in anything from property to a SEP IRA, how to do a “debt snowball,” how much money should be saved and where, or the fact that though self-employed people make up a small percentage of the population, they make up the majority of high earners, were all fundamental to understand.

For you, this information could be knowing how much your colleagues are getting paid, what positions may or may not be available to you somewhere else, how you could move to cut your living expenses by a third, whether or not it is possible to work remotely, how to invest in your first property… and so on.

You need to make a choice.

You need to make a choice about how you want to live.

You need to make a choice about where you want to live, and doing what.

You need to make a choice about what matters to you, and what doesn’t.

If nothing changes, then nothing changes. If you want a different life, you’re going to have to build a different life.

If you make a decision about how you want to live — and whether or not that will include things like morning coffees—your job is then to figure out how your work and financial strategy can support that life.

Not the other way around.

Written by

Writer. For my books and mentoring sessions, visit, or reach me here:

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store