High Income Doesn’t Mean High Net Worth

High Income Doesn’t mean High Net Worth

Whenever it comes to judging the net worth of anyone, most of the people in this world simply believe that, High Income people are the High Net worth and Wealthy people. But well, Unfortunately this is not true. This is because High Income does not necessarily translate in to high level of wealth (Net Worth).

Doctors, Lawyers, Chartered Accountants and IT Professionals are the high income group people. And they spend a lot behind their high status life style. But it is not necessary that, all of these high income people are high net worth people.

A Doctor who is earning $ 5,00,000 and having Net worth of $ 1.2 Million is technically a Millionaire. But he spends almost $ 4,00,000 every year. Now, after paying tax if you spend almost $ 4,00,000 than what remains at the end for the long term investing and wealth building?…Nothing…

Now, just think that How much time this doctor live without altering his life style on his $ 1.2 Million net worth if he stops working today? not even 3 years.

While a really wealthy person is one who can live and maintain the same level of lifestyle for the rest of his life if he today stops working.

Remember that, Wealth is considered in TIME and not in NET WORTH or INCOME.

A sports star having the net worth of $ 10 Million & annual Income of $ 7 Million is technically a multi-millionaire but he is not wealthy because his annual expenses behind his high status life style is around $ 4 Million. Now, How much time he can survive in his Wealth if today he stops working? Maximum 3 Years…. And not more than this. And that’s why even after $ 10 Million of Net Worth, He is not Wealthy in the true sense.

Moral -

You can only become wealthy of you translate your high income into Wealth, I mean Assets. If you spend your high income in acquiring more and more assets than and only you can become wealthy in the future.

But for that, it will require Discipline & Patience for Regular Investing.

Because if you can’t translate your high income into wealth than you can not become rich and financially Free…!!!