Law 23 of Savings and Earnings

This is a simple law of nature, but one which is very handy:

It is more profitable to save money than to earn more money.

That’s it.

Whenever you earn money there is a certain amount of drag and cost. An example of drag might be government forms. Suppose you sell more retail merchandise. In that case you’ll have to do some additional work calculating, collecting, banking, reporting, remitting, and bookkeeping the additional sales tax as part of your forced labor on behalf of your state, so that for every new earned dollar you must labor.

An example of cost might be your cost of goods. Suppose you sold more groceries or birdhouses or teddybears. For each one you sell, you must purchase the groceries or birdhouses or teddybears, so that each newly earned dollar has some cost.

But suppose that, instead of selling more stuff, you found a way to save. For example, getting a cheaper supplier, doing manufacturing with a less costly process, or shipping it more cheaply. In that case, each dollar drops directly into your pocket, with no drag nor cost. That’s why saving money is usually more profitable than earning more money.

Knowing this important secret of the universe, go forth and prosper.