There are many wealth myths, but one seems to endure: that income equals wealth.
We often confuse wealth and income. Some people appear to be rich, like your neighbors driving luxury cars and friends wearing designer jeans. When in fact, they only spent more on these purchases.
Someone who earns while sleeping from dividends and investment gains at $60,000 per year and spends $50,000 per year is rich. I personally know a husband and wife who make a combined half a million dollars a year yet have nothing in their bank account despite having private schools, second homes, and luxurious lifestyles. They are poor. Being 'rich' has little to do with the size of paycheck.
Possessing things does not equate to wealth. Money does. And they are not the same. A teacher's savings account may be larger than that of a doctor, who earns six times as much each year. High earnings can lead to wealth, but not if you spend every last dime on luxury cars or fashionable clothes. Even those with great incomes might live paycheck to paycheck.
It is what they do with their money to develop wealth that makes people wealthy. They have enough perseverance to avoid the urge to spend more as their income rises. They spend below their means. This leaves enough money to commit to savings and investments... which eventually increase net worth.
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