Thursday, October 6, 2011
Income is not wealth
Many people want to have a big income. That's all well and good, but income is not wealth. It is quite possible to build wealth on a very low income. The key is to build a surplus that can be put to work. Some of the highest income people have little wealth. Now it's easier to build a high net worth if you have high income no doubt. The more you make in income the more you pay in taxes though. Wealth is stored income. Income and expenses go together as do assets and liabilities. Wealth is the assets you own. A high income doesn't do you much good if you spend it all or worse yet go into debt. I think one of the most admirable and challenging things is to build wealth while making income on a minimum wage level. Once again I have to conclude that expenses are paramount in this world. Keep them low! Keep your money for yourself. You earned it didn't you? Any level of income can be spent no matter how high. The principle is what matters not the amount. Respect money, and it will be there when you need it.