Just because you earn a lot of money doesn't make you wealthy. Wealth is about saving for the long-term. Anyone can work towards being wealthy.

It’s hard to feel rich when a stack of bills consistently takes a voracious bite out of your paycheck each and every payday. Spending money on essentials like housing and saving money for the future does not feel like a luxury when you compare yourself to high rolling friends.

You may not feel rich compared to your friend that is out driving their luxury car to fancy bars every night. However, it’s possible that you are on a path to wealth while they blow all of their money. 

What’s the difference between wealth and income?

Although the terms wealth and income are often confused, they have two completely different meanings. It’s important to know the difference in order to spot the contrasts in your life. 

Income focuses on the present

Many people consider high income earners to be rich. Of course, if you are making a whopping six-figure income, then it is easy to look rich. Especially if you do not plan on saving any of that income for the future. With that high income, you can lease fancy cars, buy nice dinners, wear expensive designer clothes and go on fabulous vacations without breaking a sweat. 

However, all of those expenditures are just a present-day reality of appearing rich. That does not necessarily mean that those spenders are in fact rich. A high income can vanish just as quickly as a changing tide due to a layoff, market change, or illness. 

Wealth focuses on the long-term

Wealth is typically characterized by long-term financial prosperity in combination with your total net worth. Instead of the amount of income coming into the household for the year, wealth looks beyond a yearly snapshot of earnings. Wealth is meant to sustain a healthy financial future for years to come instead of a constant supply of Instagram worthy purchases. 

Should you focus on income or wealth?

Income is important but what you do with that income will build wealth or not. Building wealth comes down to leveraging your savings into long-term financial stability. 

It can be tough to prioritize long-term financial success over short-term luxury items that make you feel rich. Even though driving a luxury car might make you feel rich today, you might feel differently as you approach retirement with meager savings. 

A high income does not translate directly into wealth. If you spend all of your income, then you will not build wealth. Yes, it is that simple. If you earn a six-figure salary but spend it all, then you are not building wealth. 

Luckily, you can build wealth on any income. Whatever your income, big or small, you can focus on saving your money and building wealth instead of spending on nonessential luxuries that make you look rich. 

Of course, it can be easier to build wealth on a higher salary because you can afford to save more after your essential spending. It is smart to work towards increasing your income while simultaneously lowering your expenses. The more space you can create between your income and expenses, the more you will be able to save towards long-term wealth.  

The question of the hour – how can you build wealth?

If you aren’t sure that building wealth is an option for you, then you are wrong! Anyone can build wealth but it will take hard work and determination.

Here’s what you need to do. 

Build up wealth by starting early

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It is important to get intentional about building wealth as soon as possible.

With time on your side, you can dramatically increase your long-term success by starting early. 

Make an effort to get yourself on track to long-term wealth now in order to reap the benefits later. 

Build up wealth by always knowing where you stand

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Before you can build wealth, you need to know where you stand today. 

Start by taking a look at your income and expenses. The first thing you need to ensure is that you are not spending more than you are earning. Yes, it sounds too easy but you might be surprised how quickly your expenses can overrun your paycheck. It is important to be honest with yourself in this stage. Make sure to count all expenses, even your splurges. 

Next, take an assessment of your current debts. Include everything such as student loans, credit card balances, and auto loans

Finally, make a budget for yourself. Include a category for savings each month and make that savings goal a priority. It will take commitment to stick to your budget but it is completely possible!

Build wealth by reducing expenses

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Now that you have a better idea of what it costs to maintain your lifestyle, consider reducing expenses.

Before you start to panic, I’m not talking about cutting back to rice and beans for dinner every night. In fact, I am not talking about cutting down on anything essential. However, there are likely ways that you can easily slash your expenses without a dramatic lifestyle change. 

For example, you could seek out a more affordable apartment. Even finding a place with rent that is $100 less each month translates into $1,200 of savings each year.

Another place to easily cut expenses is to avoid dining out or at least cutting down on alcohol spending when you are out on the town.  

Build wealth by paying off your debt

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After you have your expenses under control, it is time to tackle your debts. It is difficult to grow wealth with the shackles of debt holding you back. Make the effort to eliminate it!

There are many approaches to paying off your debt including the avalanche and snowball methods. Although many methods will work, the method you choose is a personal choice. Decide what will motivate you to power through toward debt-free. 

If you have credit card debt, then you should consider a balance transfer as a part of your strategy. Here is my favorite balance transfer card: 

Build up wealth by refinancing

Refinancing is another way to take a handle on ultimately build up your wealth. Especially with the student loan crisis, deciding to refinance student loan debt is something you want to address sooner than later.

Build up your debt by refinancing - Earnest

Earnest looks at your entire financial profile in addition to your career in offering flexible refinance loans. They may be able to offer you a rate as low as 2.14% (at the time of writing). Plus you can request to skip a payment after you’ve made at least 6 months of consecutive on-time full principal and interest payments; your loan must be in good standing.

Read our full review of Earnest.

Build up your debt by refinancing - Credible

Credible offers a student loan marketplace by aggregating loan options for you. Rather than spending hours and tons of legwork trying to figure out the best deal, you can see all the lenders best rates based on your individual circumstances including your debt, credit score, and the terms of the loan you’re trying to get.

Read our full Credible review.

Build up wealth by starting to invest

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Once you’ve eliminated your debts, it’s time to start investing. Funneling your savings into smart investments will allow you to build your wealth at a faster pace. Instead of allowing your savings to sit idle in a savings account as inflation eats away at its value, you should invest that money. 

You have choices when it comes to investing. You can build an impressive stock market portfolio, create stable cash flow through real estate, or focus solely on your retirement accounts.

The choice will come down to your risk tolerance. If you cannot stand the thought of a stock market plummet, then you’ll need to look at other options. Likewise, if real estate troubles give you qualms, then you’ll need to find another way to invest. 

My humble advice – stay on course

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As you build wealth over the course of your lifetime, you will be tempted to stray from your goals countless times. If you approach wealth building with an attitude that you are giving something up, then it will be even more difficult to stay the course. 

It is important to adjust that mindset early on. You have the opportunity to build wealth and create a new level of richness that you’ve never experienced before. With a solid foundation of wealth, you’ll have more freedom and flexibility to pursue whatever you see fit. Use that as a motivating factor to continually push towards wealth. Even if your income is relatively low, you can still make progress towards wealth with smart spending choices. 


It is completely possible to build wealth on any income. It will take intentional spending choices and a strong desire to succeed. Remember, building wealth will not happen overnight. However, it is within everyone’s reach!

Take your first step towards wealth today. 

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About the author

Total Articles: 56
Sarah Sharkey is a personal finance writer covering retirement, investing, debt, savings, credit cards, mortgages, and student loans. Additionally, she is the founder of Adventurous Adulting, a personal finance blog dedicated to helping readers tackle their money and take control of the adventure of life. You can connect with her on LinkedIn or Twitter.