Wealth Defined

You have heard the word “wealth” over and over again especially ever since you took more interest in your own pocket rather than other people, but what is wealth?

Make no mistake.

Wealth does not equal to big income

Just because you earn 4, 5 and maybe 6 figure income does not entitle you to being wealthy.

Yes, there are people who make that kind of money and some times you can go to the place where they usually hang out – so sure that if I would pick and throw a stone at a crowd, I am sure to hit a person whose income is at least 5 figures or above.

Yet, in spite the big money they earn, most of them are no better off than they guys who make 4 figure incomes or less in a month. They have mortgages, car loans that stretch over 5 to 10 years long, credit card bills that seem never ending, and not to mention the expensive entertainments they subscribe to which I dare not imagine how much money have already flown out!

The result at the end of the month? The big money makers are almost as broke as the janitors.

These people have confused a large income with wealth – and that made the difference!

So, what is wealth?

Wealth is the ability to survive many days forward without working.

Wealth = Money / Expenses

Wealth is also your net worth. Income is the inflow while your expense is the outflow. You can build your wealth if you have a big inflow but it not necessarily the case (more on that later). However, if your outflow is equal or greater than the income, you can almost on your financial nightmare coming true.

How Can I Build My Wealth?

If you are so used to working for money, it is a small wonder why the idea of having money coming in without working is hard to absorb.

But then, this is how the truly wealthy people achieve their wealth – having money coming in without working.

If you would look back at the previous diagram on time and money, notice that the types of people who have both time and money at hand are business people, landlords and “work at home” entrepreneurs?

You will do well to consider your next level of entrepreneurship in either one of those careers if you desire to build you wealth and have money work for you.