A personal blog of Michael about his random thoughts, interesting finds, ad may be even more!

Tuesday, 15 April 2014

What Is The Difference Between Wealth And Income: Which Is Better To Increase: Wealth VS Income: Source Of Money Priority Tip

Wealth VS Income
Before I pose any articles about money saving tips, of course we need to tackle the basics first. We need to know the difference between wealth and income. We do know that they both refer to money but how can they be classified if they fall on to wealth or money? So lets start..

Wealth, wealth is money that is saved or stored. It is already earned and can be used anytime by its owner: While for Income, income is a value of money that is designated to be earned at any given point in time. It usually is a specific amount of money that is acquired in cycles of period.

We usually say that a man is wealthy when he already have earned a lot, it can be in any form of means especially money like winning in a lottery. And we often label people that have prestigious jobs like doctors and lawyers that they are high income earners because they have continuously high amount of salary every month or year. See the difference?

So now, which do you think is better: Having more wealth or having a high salary?
Lets take the listed factors one by one:

Savings amount - This factor takes a significant part of our personal finances as this will affect both  income and wealth. Even though how high once salary is, if he is not saving anything.. it is like filling a cup with water that has holes in it. And it is as the same as it affects our wealth of using a fueled car with no intention of refueling it. Worthless.

One secret on having a good amount of savings is putting it in one of your first priorities. Once you have your earned income, automatically save your targeted amount every cut-off. One of your first priorities means putting it aside before thinking of your unnecessary wants and luxuries. And by doing this, you are now increasing your wealth.

Longevity of maintenance - One of the aspects to think about on where to focus between wealth or income is its consistency. Weigh where you think you can sustain it the longer, having a high amount of income or by saving a good amount of money. If you think you have the discipline to save money without touching it for a long time then focus on saving. But if you think you got a job that you really really liked then try to excel there and treat it as an investment. Focusing on aspects where you can endure more counts in the long run, believe me.

Purpose, Target or Mission - In the first place, before you plan on earning money for something you must have a purpose, target or mission on doing it. A good example for this is any college degree, you study because you targeted a profession you want to be in the future before going through it.

What is your target on earning money? If it is to pay some immediate bills or match it with the same level of your rising life-style & day-to-day activities, increasing your income is the recommended focus for it. But if you are thinking of a further thing of creating your own business someday or buying a house & lot for your family, well then of course increasing wealth must be in mind.

Future plans - Do you want to think of your future now or live your life day by day? Both choices has its pros and cons but it is definitely a choice that everybody has the freedom to choose.

Actually increasing either wealth or income depends on your strategy of manipulating them. It does not automatically imply that a high income earning professional is wealthier than a less earning average person. So much other factors affect it like standard of living, number of expenses, etc.. The right mix of things on thinking where you can excel, what is your situation right now and putting the right mind to a worth-doing mission must always be kept in mind. It does not matter if the end target nor the end outcome changes, it is normal to do so, but as long as you are doing it right with good intentions and the correct way - do it and maintain positivity.

23 comments:

  1. I think wealth is more long term or what we can say as accumulated income.

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  2. I don't have any wealth now but I'm expecting my income and will definitely save it! :) I think wealth is better to increase like looking for factors on how it will grow bigger over time.

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  3. Thanks for sharing this tips as I am trying to take care of our finances.

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  4. Thanks for sharing this! All I know is that all of us should learn how to save so we can have something to use when winter comes :D

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  5. It also goes to the saying that it's not how much you earn but how much you save that makes one wealthy

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  6. This is an enlightening post about the differences between wealth and income.

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  7. You're right. Earning money should have a purpose. I always have a goal in mind - mostly for investment and making more money.

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    1. Be wise on using it. Correct! Although sometimes, it is okay to reward yourself but still being wise on how to spend it counts.

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  8. wealth is more important , me and my husband invest a money in stocks .. thanks for sharing ..

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  9. Wealth and income are obviously different things, it's just that income is one of the factor of your wealth.

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  10. These are great tips and I am glad you posted them. Thanks :D

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  11. am i just lucky that my husband is business and finance professor haha i don't have to consult any one for money topics. it is very nice knowing the possibilites that you have posted above

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  12. Both are significant, time is essential for the two. The more income flows in, more opportunity to expand your wealth.

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  13. Unless one is an heir to a large fortune, much effort has to be given to earning enough to create wealth. One feels more secure when there is wealth stacked up somewhere to be accessed at the right time.

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  14. Thank you for your insight about wealth vs. income. I have come to a point that I am seriously considering a retirement plan, maybe a life plan. I do not want to be a burden to my children when old age comes around. Start saving now.

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  15. Income is one of the reasons why wealth exists, even if it means one is an heir to a huge fortune.

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