 The difference between income and wealth Wealth and income have been used interchangeably by a good number of people. The truth, however, is that they are two different things and shouldn't be used to mean the same thing. Although these two terms may go hand in hand, taking them to mean the same thing can be a little misleading. While income is generated, wealth is created. Everyone wants to be wealthy, right? So they think earning the huge monthly income can help you achieve that dream. But you'll be surprised to find out that is not always the situation most of the time. Why? It is pretty easy. Income and wealth are two different terminologies. In this video, I'll share with you how to earn more money, five ways to boost your income. This, I believe, will help you become a successful person. If you're new here, consider subscribing so that you won't miss other interesting videos like this. Income is the regular earnings you get either from your investment or as a payment for services rendered or sales made. It can come from different sources such as salary, rent, profit, interest, and so on. Wealth, on the other hand, is the total value of capital, assets possessed, stored, or saved by a person for future use minus your liabilities. It includes assets such as money, real estate, and personal property. While wealth represents what a person owns, income is what he earns and it consists of the flow of cash. In the long run, income creates wealth if it's properly managed. A person may have a huge income, but if he doesn't save, he will not be able to accumulate wealth. Let's consider Jane and Bridget's lifestyle. Luckily enough, Jane started working at age 23, right after college. Although her annual income is below average, she has trained herself well enough to be able to save at least 10% of her monthly income and to avoid any credit card debt. As a result of a diligence in hard work, Jane earned herself a promotion that increased her annual income. Now, she earns an annual income of $60,000. Jane continues to live below her means so that she could continue her 10% monthly saving habits even though she is married now with more responsibilities. Anyway, after working for about 27 to 28 years and maintaining a 10% annual savings which she invested, Jane successfully acquired a wealth of about $1.5 million, meaning that if Jane's family had a minimum monthly budget of say $40,000 to $45,000, she and her family will conveniently sustain their current lifestyle for another 30 years without working or worrying their heads about how to get some money for survival. Bridget, on the other hand, went to one of the best schools in the world and received a quality education, giving her an edge over Jane. Like Jane, she got a job as soon as she was done with college as well. Luckily, her new job came with a very good offer of $200,000 annually. After many years of proving herself hardworking, Bridget worked her way up the industry and started earning $360,000 yearly income. Now, married, she could get all the things she wanted such as a luxurious property, fancy car, pieces of jewelry and the likes. Bridget became someone who lived from paycheck to paycheck because sometimes she lived above her means trying to meet up with her responsibilities. In the eyes of everyone else, Bridget is the rich and wealthy one because of her lavish, blogger lifestyle. I'm sure, without asking the question about it, it is clear who the wealthy one is. You see, when it comes to income and wealth, income can be defined as the money received or earned continuously, as a return for work or investments and is often generated immediately. Wealth, on the other hand, is the accumulation of a person's valuable assets, which is created over time. Wealth can be acquired by spending income on things or assets that can generate additional income. Like Bridget, the reason why high-income earners aren't necessarily wealthy is that they often leave beyond their means. Income can be generated by offering value to others, while wealth is the result of acquiring valuable commodities. According to Ben Carson and I quote, the standard of living where you choose to reside can have a huge impact on how far any of these income or wealth numbers can get you. And how much or how little you choose to spend of that income or wealth also plays a role. Lifestyle inflation can be a killer if you're not careful, no matter how much money you make. Summary Income is the amount of money a person receives a return for his services, sale of goods, or profit from investments. While wealth is the net worth of a person, the total value of his assets excluding his liabilities. Income is the flow of money obtained from factors of production. While wealth is the market price of the stock of asset an individual possesses. Income is money earned immediately, while wealth takes a huge amount of time to acquire. In other words, wealth is accumulated over time. Income comes in the form of a certain amount of money, while wealth includes cash, real estate, personal properties such as jewelry, cars, and the likes. A person might earn a high income and not be wealthy. Conversely, a person who earns an average income can turn out to be wealthy. Anyone can become wealthy. If they work hard and save a part of their income, after a long period when their savings eventually accumulates, they will not need to work to generate income because wealth will be more than enough for them. Thank you very much for watching our videos. We'll like to give you another interesting video for you to enjoy next, but before then, our team will be very happy if you can like this video and share it with your friends on social media. 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