Difference Between Class and Wealth
posted in General Finance |Does people living in the uppper class means they are rich?
Adam Beyah in his blog said:
There is a big difference between class and wealth. One might live as a middle class or upper class but that doesn’t mean they have true wealth. Wealth is a balance sheet function. Most people believe that wealth is an income statement function. I had a client who is a physician. This client worked at a local hopsital and received a Form W-2 of over $186,000.00. She also earned other income and received a Form 1099 for about $45,000.00. Most would consider her middle class because she lived that kind of life style.
When I completed her tax return, she had a balance due of about $11,000. I gave her an invoice and she promply wrote me a check for my fee. She got up and thanked me as she left my office (hesitantly so). About 10 minutes later I heard a soft knock on my office door. She peaked her head in apologetically and asked me if I could hold her check to the 15th of the month.
Wealth is having a sufficient amount of income producing assets that produce enough income on annual basis that affords you the ability to live the lifestyle you desire to live wthout having to go to work.
So based on this definition, wealth isn’t how much money you earn but what you do with the money you earn.
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