Another terrible misconception that many people have is the idea of that income and wealth are synonymous. I'm here to tell you they aren't, and they never have been.

Income is defined as "an opportunity for consumption which is provided within a certain period of time, expressed by some set monetary amount."

If you compare this to the definition of wealth in the last paragraph, you can clearly see that the two are not the same.

Yet, you would be surprised by the number of people, even those who make hundreds of thousands or millions per year, who think the two are the same.

If you hold this view, and you're not very wealthy, you should now know why. Your understanding of finance is flawed. You have a view of finance which isn't based on economics, or even common sense.

However, don't feel ashamed of this, because it is very likely that there are people who make more money than you who are in the same boat. The difference is, by reading and following the advice in this article, you'll get ahead in life, while they won't if they continue down the path they're currently on.

Now that you know the difference between wealth and income, it should be obvious to you where your ultimate priorities should lie: in building "true" wealth. True wealth doesn't lie in paper money, stocks, bonds, or anything which is based on paper. Paper is worthless, it has always been, and it will always be unless paper suddenly becomes rare, which I doubt will happen any time soon.

The only reason why those of us with lots of paper money seem wealthy is because our society accepts paper in exchange of goods.

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