Income Versus Wealth


As consumers we are programmed to buy depreciating assets. Advertising messages urge us to buy doodads or things such as cars, furniture and clothes that will go down in value. Whether you have the cash or not, retailers are happy to extend credit or take your credit cards. This results in a pile of debt and useless items that would be sold  for much less if they had to be liquidated.

Having a large income doesn't necessary translate to wealth. Without understanding financial strategies that wealthy people use, people buy cars that are too expense and houses with payments beyond their means and try to keep up with their neighbours.

It is not about the amount you make but what you do with it that counts. If you invest in depreciating assets you will be digging yourself into a big hole that is hard to climb out of.

When debt is used to buy things that increase in value and generate profits, a person is thinking like a wealthy person.

True wealth comes from financial independence  and living within your means with most money coming from passive sources.

No comments

Post Your Comment: