What’s The Difference Between Income & Wealth?
I personally know lots of people who have created a large income, but that does not automatically mean they’re going to be wealthy. A large income doesn’t automatically mean you’re going to have great wealth! Income is what you create, make or earn from either a job or business.
From the income that you earn, you should be taking a percentage each week, month or quarter from your income, to add to your big crazy treasure chest called wealth.
Building your wealth is going to require some study. It’s going to require focus, energy and truthfully (here’s the not so great news!) it’s kind of like another full time job. But it’s important that you are educating yourself of growing and maintaining your wealth – this isn’t a job you can pass on to someone else.
As my portfolio builds and my wealth increases, I imagine all that money as not being my money – it belongs to the future! It belongs to Old Scott. It’s for when I’m playing golf and travelling the world with not much of a care in the world. While I use my available income for everyday budgets, I’m never allowed to take money out of my treasure chest, because that’s my wealth.
I hope you’ve enjoyed learning these distinctions. As always, you can also leave any questions about wealth or income in the comment section. Please share this with your family and friends if you feel they could also benefit from my insights into the millionaire mindset. Live deliberately and bye for now!
Read The Full Transcript
Sometimes in the teaching I do on income, wealth and mindset around the world, people get confused. They think if they make a lot of money, they’re going to be wealthy, but I have to tell you, there’s not necessarily a correlation between the two! So just to be clear, here’s what income is: what you create, make or earn from either a job or a business.
If you’re watching this video, you’ve probably got your own business, a part-time business, or you’ve got a job – these are all good things to have in order to generate some income. Obviously, I say income is important, because you need it. Firstly, you need income to maintain your lifestyle (that’s a conversation we’ll have in the future, so you can make sure you’re doing that whatever your current income). You need income for lifestyle so you can go to the farmer’s market on the weekend and get your organic tofu, broccoli and oils. You need income to make sure you’re taken care of – can you jump on a plane and travel somewhere if necessary, or pay for your house mortgage or rent? But you also need income so you can take a percentage each week, month or quarter from your income to start putting towards your wealth.
Now, your wealth is this big crazy treasure chest; you want to make sure you’re building it. Your income gives you lifestyle, but your wealth gives you, what I call, the “sleep at night” factor. What does that mean? It means you spend 5, 10, 20 or even 35 years creating an income through adding value to something that you love or are good at, to be able to live off and also to pour into your treasure chest. That way, you also spend 5, 10, 20, or 35 years building this treasure chest that becomes your wealth. That’s a beautiful, great big bucketful of all sorts of things that we’ll chat about in a future blog post. That wealth, is what allows you to sleep at night and have peace of mind in case your income disappears one day or to have freedom in the future when you want to go play golf or travel, or contribute and do community service work. It allows you to take care of your children and grandchildren, maybe send them to university or college, or even take care of your parents, if they need taking care of in the future.
I want to make something very clear. There’s a mistake made very commonly in the very 21st century: People think if they make a lot of income, they’re immediately going to create wealth and that is not true! It’s absolutely not true! I personally know lots of people, but you’ll also see this in the media, Hollywood, sport or even people who receive inheritance money, who have created a large income, but that does not automatically mean they’re going to be wealthy. It doesn’t automatically mean you’re going to have great wealth. Building your wealth, you treasure chest, your portfolio of assets and all sorts of different ways of holding your cash and your wealth is going to require some study. It’s going to require focus, energy and truthfully (here’s the not so great news!) it’s kind of like another full time job.
One of the things you want to be very careful about is making sure that you are in control of building this treasure chest. It’s not something you give to somebody else to take care of. It’s not something to abdicate responsibility for and then ask someone else to build the wealth for you. It’s not something you want to ignore, thinking, “If I just keep making more money, building my business, making another hundred million, a million or five million dollars, then I’ll be wealthy.”
Always be very clear, some days, you’re working on your income: taking care of your clients, building your product, working your job or whatever it is you need to do. But certainly every day, week or month, you want to be spending some time on building your wealth – and never the two shall meet! As our portfolio builds and our wealth increases, I imagine that money as not being my money – it belongs to the future! It belongs to Old Scott. It’s for when I’m playing golf and travelling the world with not much of a care in the world. If I want some more stuff in my life – a new car, a new boat, or I want to go somewhere – I’m never allowed to take money out of my treasure chest, because that’s my wealth. So, I’ve got to go get some more income! We’ll chat about that in a future video.
Here’s a quick distinction to make sure you understand: there is a very clear difference between income and what you use for your lifestyle, to have fun and what you use to start building your wealth and self, which is a whole different career, that you need to find time for and then ideally, fall in love with! Hope this has been useful for you! If you’ve got any questions on income (How do I create more income?), or on wealth (What even goes into your treasure chest?), I’d love to talk about those on a future blog post or you can also leave your questions in the comment section. Please share this with your family and friends.
Live very, very deliberately! This is Scott Harris saying, bye for now!
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Scott Harris is a leading Australian coach, mentor and speaker, with 20 years of experience working with individuals, businesses and audiences around the world and supporting them in creating phenomenal success; financially, physically and emotionally.
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