Don’t confuse income with assets

Don’t confuse income with assets

“There is no one quite as angry as someone who has just lost a lot of money.” – David Williamson

Have you ever wondered why many high income earning professionals get themselves into financial strife? It’s because they confuse earning a high income with building an investment portfolio. A salary of $200 000 a year might sound a lot but it’s only $136 000 a year after tax of nearly $64 000 has been deducted. It’s very easy for them to start going backwards if they spend $50 000 a year on overseas holidays and $25 000 a year on school fees. Wise investors live within their means and allocate part of their income for interest on loans used to buy investments like property and shares. Then, when they retire, they’ve got money working for them.

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