This piece is part of my 2016–2026 archive migration. Some original formatting, content, and external links may be missing, changed, or not be optimized.
One thing people don’t consider when building financial independence
Your expense ratio is your total expenses divided by your total monthly income.
You most likely don’t know your expense ratio if you’re not budgeting, which means you’re more than likely not building wealth but debt.
Like the majority, we consistently allow lifestyle creep to inflate our cost of living.
Many of our expenses are optional, redundant, and add no value to our lives.
1 Way To Build Wealth Easier
Most people destroy their chances of building genuine wealth because their expenses are too d*mn high.
They never consider that they don’t necessarily need more income; they only need to keep their expense ratio lower to build wealth continuously.
As you build more wealth, multiple things positively increase, which include your:
Net Worth
Mental Peace
Financial Independence
Too often, we manipulate an increase in our anxiety levels because we’re spending too much of our income, which is stressful. We buy more, which leads to us lacking financial resources – creating fear.
Advice That Will Take You Far
Don’t spend all the money you earn every month. Keep a lot of it. Invest a lot of it. Save a lot of it. Rethink your purchases and frequently ask yourself:
“Do I need this?”
“Will I use this in the future?”
“What is the goal of this purchase?”
“Does this purchase add or detract value from my life?”
People believe they should use every dollar they bring in, similar to zero-based budgeting, but this isn’t necessary. You don’t need to touch every dollar.
Keep your expenses extremely low and then invest and save everything else. Keep it simple.
Calculate Your Expense Ratio
Step 1: If you were to write down all of your expenses, what would the number be?
Step 2: Now, write down the number of after-tax income you’re bringing in monthly.
Step 3: Divide step 1 by step 2. What percentage do you get? If your expense ratio exceeds 70% of your total income, reel it in quickly.
Give Yourself A Raise Without Asking
Did you know the more you cut your expenses, you’re giving yourself a raise?
The waiting game is over. You no longer have to wait for your boss to give you the answer you’re seeking regarding that raise you want.
Slash your expenses and give yourself a raise. The more you cut from your budget, the more significant the raise you give yourself.
Are You Decreasing Your Wealth Potential?
The answer to this question is yes for most people because their expenses exceed their income.
For other people whose expenses don’t exceed their income, they might as well because they’re hovering at the 71–99% expense ratio, which will never lead to real wealth.
This content is for informational purposes only — not professional advice. Consult a qualified professional before making any major decisions.