Focusing on Cashbacks & Reward Points Won’t Make You Rich – But There is Something Else that will

If you use mobile apps and websites to buy products regularly, chances are that you would be hearing these 2 words a lot in recent items – Cashbacks & Reward Points.

Now who doesn’t love a little cashback here and a few reward points there?

Nothing wrong with it. It is just an extension of the concept of ‘Saving Money’. But what I feel is that there are many people out there, who are focusing a ‘little too much’ on these cashbacks and reward points. 

And they are doing this for hours at stretch. They are constantly searching for better deals.

Again…I say that there is nothing wrong here. All these are ways of saving money indirectly.

But there is something about the concept of SAVING which we often ignore. There is a limit to how much we can save. You might be earning Rs 50,000 a month. As of now, you are able to save Rs 10,000 a month. And if you can get some better deals and cashbacks, then you might be able to save an additional thousand or two a month more. That’s it.

So all in all, you would have saved Rs 12,000. That’s it. Could you do better than this? Yes. You could have cornered some better deals and more cashbacks.

But there is a limit. Limit to how much you can save. At most, you can save is Rs 50,000. Isn’t it? On an income of Rs 50,000 it is impossible to save Rs 51,000.

The formula is simple:

Income – Expenses + Cashbacks = Savings

You can control your expenses & increase your cashbacks. But only upto a limit… And that puts a limit to how much you can save.

Savings Cashbacks Income

So doesn’t it make sense to focus more of your energy and time on something which you can increase?

I think it does. And I am talking about INCOME part of it.

Honestly speaking, there is no limit to how much you can increase your income. But there is a limit to how much you can save. And I feel that this is the reason why as a country, even after having one of the highest savings rate in the world, we are still poor. We focus so much on savings that we essentially forget, that we can also increase our income…and there is no limit to it.

Just think about it.

This post makes me think about the debate between Earning More Vs Spending Less. Will probably jot down my thoughts and share it with you all sometime soon. What are your thoughts on this…?

PS 1 – By increasing income, I don’t mean salary increases.

PS 2 – The formula above is just to show limitations of savings. It should ideally be (Income – Savings/Investments = Expenses).


  1. Nice one Dev !!

    Important point is how much time people devote for these things !!

    Its similar to few years back. how people used to change their mobile number because the next service provider used to provide a little better call pack..SMS pack.. night minutes and lot of other meaningless packs.

  2. Thanks Shyam
    And you are right when you said that it is also important to consider the time being devoted to such activities. If its really beneficial, then one should go on and do it. A friend of mine is quite brilliant in such things…and just to give you an example of his brilliance – he was able to generate Rs 45K worth of free rides from the app-based taxi services in just one month 🙂

  3. that app based taxi is really getting very popular 🙂 .. some of my friends are also on taxi hiring spree … booking taxi for almost everything and free everytime 🙂

  4. Yes Dev, we can increase our income by carefully observing our cash-flow. We need to put our savings in those instruments which will add incremental cash in our income. So rather than working more to increase our income we should be focusing on how our current money should be worked to get more cash… 🙂

    Here I would like to suggest a beautiful book “Cash Flow quadrant by Robert Kiyosaki…. for our fellow readers…

  5. In Taxi case, who is benefiting?
    is it Taxi Passenger?
    Is it Taxi Driver?
    Is it Service Aggregator?
    How funding is given to Taxi Service Agreegator if they are selling a dollar as 80 cents?
    I am sooper confused Dev.
    Anyway, Pl share the Cash flow for persona finance if we have multiple bank accounts ( one for Salary, one for Reimbursement. one for Shares & dividends, one for Mortgage, one for PPF,MF & Bonds)

  6. Hi Karthik

    I regularly use these taxi services and my take (after talking to many of the drivers) is that this concept has immensely benefited the taxi drivers. A few confessed making money in excess of 70K a month!!

    I am not very sure whether this model is sustainable or not. It needs a deep-dive to understand it from all perspectives 🙂

    But coming back to your personal finance related query, I am unable to understand the exact meaning of your request. Can you elaborate?

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