You’ve probably heard a million times by now how income and wealth are two completely different things. Some people can have an awesome income but not be wealthy. They can project a lifestyle that would suggest they have vast personal wealth, but still have little to none of it.

Believing that income is what leads to wealth is what often propels people to go for the high-paying job, thinking that this is the way to become wealthy. And while it’s true that having a job that pays well might eventually lead to being wealthy, it’s not a given.

So before you turn to Big Law Investor to find the services that will help you turn your income into wealth, let’s make sure that you understand the difference first.

What Is Income?

When you do a job and you’re paid a salary for it, that’s income. When you sell your products, that’s income. When you invest money into a business and you participate in the profits, that’s also income. So whenever you earn money, or whenever money flows your way, we’re talking about income.

Income is what you’re left after you’ve paid your taxes and counted off all the expenses. One of the key traits of income is that it’s generated fairly quickly – it doesn’t take ages to get a salary, and you don’t have to wait for your tenants to accumulate a vast amount of money to pay rent.

Income is quick, and nothing is preventing you from having several income streams. Something like that would even be recommended, especially if you can automate some of those income streams to generate money for you without your direct and frequent involvement.

What Is Wealth?

Wealth is a whole different beast than income. You can, for example, have an incredible job that pays well. If your mindset is to create wealth, you’ll be very careful with how you spend your income. You will favor the activities that would ensure that the money you earn from the income sticks around five, ten, or twenty years down the road.

If, on the other hand, your mindset is to appear wealthy right away, you can spend your income on putting up a façade of wealth. You wouldn’t be the first person who’d do it. You can rent lavish properties and lease ridiculously expensive cars. But by doing so, you’ll do exactly the opposite of what is required to become wealthy.

Wealth is the accumulation of value over time. You put a large chunk of your income and invest it in things that tend to carry value and that might even help you create an income stream. For example, if your income allows you to buy two houses, you will increase your wealth by owning those properties but you’ll also open up the opportunity to rent one or both houses, and thus create a new income stream.

So let’s recap: income is the money you earn from your job, your property, or your stocks. You get it periodically, you pay taxes on it, and you can spend it whenever and however you want. Wealth, however, comes into being when you decide not to spend your income but rather accumulate it, letting your wealth grow with time. So if you want to be well-paid, go find a job that pays well. But if you want to become rich, learn how to accumulate wealth.