Are you Wealthy if you earn $ 2 Million a year & your Net Worth is $ 1.5 Million?
Most of you will answer the above question “Yes”. but in reality, the answer of the above question is “No”. This is because having $ 1.5 Million is technically a millionaire but if your annual income is $ 2 Million and you have still accumulated just $ 1.5 Million in wealth than it means that, you spend most of the money that you earn every year.
It means that you are spending most your income behind those things which does not appreciate at all. It means that you are not diverting your income towards buying assets. Now, just think that how much time a person having $ 2 Million annual income & $ 1.5 Million net worth can maintain the same level of life style if today he stops working?
Now even a year right? Because it is impossible to generate $ 2 Million annually from just $ 1.5 Million of wealth. So This person is not wealthy.
So Who is Wealthy?
Well, wealthy person is one who can survive and maintain the same level of lifestyle probably for years and rest of his life if today he stops working.
Thus these are the people you read about in the newspapers and media channels. I am talking about high income but low wealth accumulator people. These are the people who live levishly and spend all of the money they earn. And thus, they live glamarous life and that’s why media loves these people.
Just tell me that, will you come back to a TV channel which shows the budgeting exercise of someone who lives frugally and never live glamorous life? Probably not. Actually we love to see glamorous life and that’s why we consider high income people wealthy people.
But remember, your income is not your wealth. Wealth is something that you accumulate.
Most of you will answer the above question “Yes”. but in reality, the answer of the above question is “No”. This is because having $ 1.5 Million is technically a millionaire but if your annual income is $ 2 Million and you have still accumulated just $ 1.5 Million in wealth than it means that, you spend most of the money that you earn every year.
It means that you are spending most your income behind those things which does not appreciate at all. It means that you are not diverting your income towards buying assets. Now, just think that how much time a person having $ 2 Million annual income & $ 1.5 Million net worth can maintain the same level of life style if today he stops working?
Now even a year right? Because it is impossible to generate $ 2 Million annually from just $ 1.5 Million of wealth. So This person is not wealthy.
So Who is Wealthy?
Well, wealthy person is one who can survive and maintain the same level of lifestyle probably for years and rest of his life if today he stops working.
Thus these are the people you read about in the newspapers and media channels. I am talking about high income but low wealth accumulator people. These are the people who live levishly and spend all of the money they earn. And thus, they live glamarous life and that’s why media loves these people.
Just tell me that, will you come back to a TV channel which shows the budgeting exercise of someone who lives frugally and never live glamorous life? Probably not. Actually we love to see glamorous life and that’s why we consider high income people wealthy people.
But remember, your income is not your wealth. Wealth is something that you accumulate.
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