e) STOP vs. CONTINUOUS
Income would, one day, STOP.
Someday you will retire from your job. A sports person would be able to play for only a certain number of years. Most actors would not get new movie assignments after a certain age.
That apart, illness, old age and/or any disability may also reduce your ability to earn during later years of your life. Therefore, but for some exceptional instances, you will find that your income will stop at some age.
Wealth, however, has the potential to provide CONTINUOUS money.
Bank deposits will endlessly earn you interest. You will get rent from your property for many years to come. Dividends will continue to flow in from your equity portfolio. In short, (properly managed) wealth could provide you with inflow of money perpetually.
So that’s how income and wealth are different. Income, howsoever large, is not likely to sustain your lifestyle when your pay-cheques stop. Since your income can and will (most probably) cease some day, you must start converting it into wealth.
Wealth is the very foundation of your financial independence.
* It is the foundation that will support you and your family in your non-earning years
* It gives you an opportunity to retire early from your vocation and live the life as you desire
* It has the ability to fulfill many of your dreams and aspirations without affecting your financial position
Having understood the importance of wealth and the difference between income and wealth, you must always endeavour to transform your income into wealth. This is where planning of your finances assume importance.
(Excerpt from 'Millionaires don't eat cakes...don't make them')
