Tuesday, 1 January 2019

To double disposable income every year- forever.

Royal Exchange London

First, let us be clear. I do not think it easy to double gross income every year. Most people cannot do it, although some workaholics can.

This blog is about a life of ease, not workaholism... but disposable income, that is another thing. Disposable income increases at a faster rate than gross income. Let me explain.

To increase our gross income from £1000 to £2000 we must earn £1000, and to actually receive this money we must earn even more due to the tax. But... to double our disposable income we might only have to earn an extra £100. This is because much of our income is spent on necessities and so is not disposable. In fact, we can even double our disposable income while not earning an extra penny if we cut waste.

Looked at this way we can see that it is possible. Furthermore, it tends to build upon itself because the additional income need not be spent- it may be invested, creating a virtuous circle.

This is just a thought for those making a list of New Year resolutions.