Tuesday, 11 May 2004

What Does It Mean To Be Truly Wealthy?

All too often people mistakenly believe that they are wealthy when, in fact, that's not always the case. After all, earning a large income doesn't necessarily convert into a wealth. Income does not equal wealth. True wealth is built over time by taking clever, active steps.Having lots of money is all very well. However, it's not what you earn, but what you do with it in the long run, which will make all the difference to your life.

The illusion about wealth

Do you merely want to look rich, or do you truly want to be rich? There's an important distinction between the two. It's relatively easy to create the illusion of wealth. However, it's another question entirely of whether or not you will be able to maintain this illusion. Besides, "keeping up appearances" can be both physically and financially draining. Creating the mere illusion of wealth is certainly not a reflection of true wealth. If anything, the illusion of wealth is often accompanied by a mountain of debt, which is present in your daily life.

A debt - driven life

What I imply by this is that, we tend to borrow money at any time we need any stuff in life. You live a kind of life driven/controlled by debts.

Credit can be incredibly useful. But, there is negative side of it. These days, credit is readily available to just about anyone and it is being used and abused as a result. The more you earn, the more creditors are willing to extend you credit regardless of whether or not you can actually honor those financial obligations. A lot of people are not as wealthy as they seem. They are merely using debt to create an illusion of wealth while the credit institutions own everything. It doesn't matter if you live in a luxury home and drive a fancy car. If you are in huge debts, then you haven't built any real wealth at all. Bad debt hinders true wealth creation. Hence, it's best to avoid it at all costs if you want to prosper.

What does it mean to be wealthy?

It's not what you earn, but what you save that matters most. You could earn $12 000 000 million per year, but if you aren't saving and investing any of this money, you'll never build real wealth. Being truly wealthy means that:

You have specific, financial goals that you're working towards;
You use a budget to plan your finances;
You are not over-indebted;
The financial institutions don't own everything;
You consistently save;
You have investments as assets;
You have an emergency fund;
You've created passive sources of income;
And you are determined to achieve financial freedom.
If you want to be truly wealthy, you must ensure that you constantly utilise your money effectively and efficiently. The rule of the financial game in life is that "your money must work for you" no one else.

Martin is a premium member at Wealthy Affiliate training. At WA, beginners, seasoned internet marketers alike, are trained internet marketing skills & expertise of developing as well as expanding successful online business venture.

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