Raise the Bridge or Lower the Water?

Financial independence involves raising the bridge (increasing income) and/or lowering the water (decreasing expenses). You can get there by taking either approach, but the path is MUCH shorter if you work it from both ends. We’ll talk later about raising your income (this takes a bit more time). Lowering your expenses, however, can begin RIGHT NOW.

A key factor to financial independence is not so much how much we make, as it is how much we keep.

There are a number of measures we can take right now to lower expenses. A first good step is to look at those (discretionary) expenses that are on auto-pilot. That is, we’ve subscribed to a service for which we are charged (automatically) each month.

Where I’m about to go some might consider sacrilegious. Chill – It takes guts (and many small steps) to achieve financial independence 🙂

We are too often “tricked” into the sales pitch (or excuse) that “it only costs $90 per month.” Let’s do some math. What is $90 times 12 (months)? Because I hate math, let’s just simplify and say this equals $1,000. That is $1,000 per year for that small expense. Let’s keep going…What is $1,000 times 10 (years)? $10,000. The question we must ask ourselves is “Am I willing to invest $10,000 in that small expense?” Make no mistake, those 10 years will pass (much faster than we think). Would we rather have the $10,000 to invest for our retirement, go on an exotic trip, pay (cash) for a portion of our child’s education? I certainly would rather have the $10k for those “options.”

What might that small expense be (for you)? One of them, for me, was cable TV. I’ll talk (freak some of you out) about others later.

One day I came home from a hard day’s work and saw my family sitting around the one-eyed monster (TV). I said, “Why am I working to pay for people to sit around my house killing time.

I had recently talked to a good friend of mine (Mike) who conducted a science experiment. He put one of those antenna things on top of his house and was receiving digital signal “over the air” for several networks (including ABC, CBS, NBC, FOX and MORE)! I like to tinker with stuff, so I did my own science experiment (put up an antenna). And, it worked!!! I cut the cord with the cable provider almost a year ago. We no longer pay for air. I mean, it is free, all around us…

Yes, for a few weeks there were some “awe dads” to the effect of “you are ruining my life.” Being fair, there were some available options…Someone else in our household could pay for cable service, but it was NOT going to be me.

A common/fearful question is “will I miss the big games?” NO. The channels we receive broadcast (via crystal clear digital signal) the Superbowl, World Series, Olympics, etc. To be fair, we do subscribe to Netflix for a mere $7.99 a month which provides a TON of additional content (TV series, movies, documentaries, etc.). And, there is a bunch of free content available over the internet.

In summary, if we think short-term “it is only $90 per month” we are losing sight of the bigger picture (and impact on our financial future). The suggestion here is to take a look at your discretionary expenses that are on auto-pilot. It becomes too easy to let a company draw on your net worth. Frequently (every few months) review these to determine if there are opportunities to reduce or eliminate any. Doing so is a crucial step towards shortening your path to financial independence!

19 thoughts on “Raise the Bridge or Lower the Water?

  1. beaverfood says:

    Good advice. A rising tide lifts all boats.

  2. Pete Ciaraldi says:

    Outstanding – you mind if I forward to family and friends or you want to keep this small for now ?

    Sent from my iPhone Please excuse any typos or autocorrects

    >

  3. Tony says:

    Good advice for anybody trying to make ends meet living paycheck by paycheck…

    • cbailey372 says:

      Hi Tony,

      I agree with you that this can help someone who is living paycheck to paycheck. But if we see the bigger picture, this strategy applied broadly (by anyone) can help to create financial independence, providing options beyond “paycheck to paycheck” living. Thanks for your comment!

  4. Chris Gagnon says:

    Craig,
    I have just read this one, but look forward to reading more. Gretchen and I have talked about decreasing expense to ease the burden on the family. I will be talking to you about that antenna… 🙂 Talk to you soon and I look forward to reading more!

  5. John says:

    Craig,
    I did the same thing for years. We had cable for Internet service only, used a Terk rooftop antenna for TV as you described, Netflix, and Vonage for a home phone. We dropped the VOIP line once 4 out of 5 people in the house had cellphones, which curtailed our ability to FAX easily (there are internet-based options that are not as family-friendly) but this was a minor inconvenience I was willing to accept.
    I do have cable today. Some time ago Comcast started offerring HBO and Starz bundled with high-speed internet for $89/month. The incremental increase from the Internet-only cost was something I could live with, but I’m prepared to go back to a world without Treehouse Masters and the Food Network if the monthly cost pushes over $100.
    The real key is to be mindful, and to make sure you’re really getting the value you want and need for your family. And recognize that your needs change over time, so it’s important to reevaluate every so often!

  6. Rev Jim Harrington says:

    Sounds great but where do you get your Internet from? Also how do you get cell phone coverage? Between Comcast and Verizon I’m spending a bundle and I’d like to get it pared down.

  7. Ed Desautels says:

    As others have noted, the tough nut to crack is internet service, particularly if you have plans to transition to working from home in the so-called knowledge industry. The cable providers have figured out NetFlix and Hulu (as recent news bears out), and their rate structures penalize you heavily once you try to unbundle their services–to the point at which any savings realized by giving up cable TV service are almost totally wiped out by the inflated price of unbundled internet service (at least that’s the case for Comcast and Verizon here in the Pittsburgh area). To paraphrase Homer Simpson, “Ah, the internet: solution to, and _cause of_, so many of life’s problems!”

    • cbailey372 says:

      Hi Ed,

      We are able to get Internet service via a “reasonable” (unbundled) price that made cutting the cord (cable and landline phone, which I’ll talk about later) well worth it! That said, I hope to do better on this…

  8. […] a recent post (Raise the Bridge or Lower the Water?) I referenced the fact that financial independence involves raising the bridge (increasing income) […]

  9. […] In addition, as a country, we can do more (better) than handing out free money: We can teach people how to “raise the bridge” (earn a living and increase one’s income) AND “lower the water” (decrease expenses). […]

  10. […] are 2 approaches to achieving financial freedom: raise the bridge (increase income) and/or lower the water (decrease expenses). Debt service (interest) is an added cost on items previously purchased or experiences previously […]

  11. […] the reality that they can obtain programming via other (much less expensive) means. In a prior post I covered my family’s experience cutting this cord, many moons ago. And, we have survived […]

  12. […] This site contains a number of articles covering the topic, under the theme: “Raise the Bridge and Lower the Water“. […]

  13. […] Raising the bridge (increasing one’s income) – click here to view […]

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