Also, frugality reaps increased benefits as the income rises. If one can maintain the same cost of living while earning more money, you end up with huge % increases in discretionary cash that can be used for all sorts of great things: investing, philanthropy, starting a business, saving for future personal projects, travel, etc.

Example: earn $100k, $35k goes to taxes, spend $50k a year = $15k discretionary. Increase income 50% to $150k, taxes become $52.5k, spend the same $50k = $47.5k discretionary. So total income only increased by 1.5, but discretionary increased by a factor of 3. Of course, this is a simplistic example -- tax rates aren't constant for one thing. But the principle is very powerful, and the effect strength grows as the income increases. Using the above numbers, 2x the initial salary results in a 5x increase in discretionary income.

Lastly, this strategy also provides great protection against a decrease in income.

Agreed, but there's also a fine line between frugality and being cheap. You should optimize what you get for the money, not lower your quality of life in an unsustainable way.

Of course, all things in healthy moderation. In the end it will come to what one is willing to do personally. But we shouldn't confuse "spending money like my coworkers or peers do" with "maintaining a good quality of life", even if there can be some correlation. I think most people will not have a problem becoming "cheap" (to me this word means: a person who expresses their frugality in a dickish manner)

Whenever I've had cashflow problems in the past, for me, spending less was never the solution. Having a good idea (and thus, making more money) always was.

Extrapolating from the past doesn't always work. In this case maybe you are not accounting for future illness or burnout.

It's great that you can have profitable ideas whenever you need them.

The thought of running out of money can often be a great motivator.

this is true, but the most you can save is 100%, but earning potential is generally unbounded. if you do not have marketable skills, then saving may be the only way to go, but if you can develop a valuable skillset, you can earn significantly more than you can save.

Firstly they are not mutually exclusive.

Secondly, though there is no upper limit to how much you can earn it rarely works that way in the real world. People who are not saving money are doing it for many psychological reasons, like being unable to resist the temptation to spend on things. And most of the times they don't like it after they do it.

Earning may be unbounded but so is spending. Unless you have a baseline lifestyle that you maintain then any increased earnings will just be eaten by increased spending since you'll already have convinced yourself that saving is pointless.

The people who spend the least are the poorest. If you we're thinking about putting your money into something worthwhile you'd very likely get a tax credit, also here's the kicker, the most you can get your expenses down to is $0, what you can get your income to is limitless.