High Income: Tool to look rich and become Famous … !!!
Do you know that High Income is the tool of becoming famous and looking rich? Well, that’s because if you have high income, you can take more debt and afford more luxurious cars, expensive clothes and branded watches.
Not only that, but newspapers and media channels love these people and give them free popularity. That’s because they live glamorous life and people love to watch glamorous life.
And yeah … Government loves these people more than any anything. And do you know Why? Well, because these are the people who are highest tax payers and the main income stream of the government is Tax.
To fuel their high status life style, they have to consume more income and thus pay more in taxes and that’s why the government loves these people. While on the other hand, wealthy people consume less income and pay minimal in taxes and accumulate more in wealth and that’s why the government doesn’t like these people as much.
High Income groups of people are government’s favorite fish because they pay more in taxes, accumulate less wealth, and keep working in the economy their whole lives. They have to work more and more because they have to maintain their high status life styles. They have to prove everyday to others that they are rich.
Thus, if you want to look rich and become media famous, then focus on that High Income.
But if you want to become wealthy, then minimize your consumed income and maximize your unconsumed income. Earn more in Assets (Capital Gains, Dividends & profits in Businesses).
You Can’t be Wealthy if your Income is Too High
Isn’t this statement so rude? Well, This statement is 100% True. You can never be wealthy if your Income is too high. This is because the more you earn, the more you will pay in taxes and thus the less you will divert towards investing.
High Income group of people (Doctors, Lawyers & Actors) are significantly reducing their probability of becoming rich and wealthy because of their realized high income. Let us discuss this phenomenon by example.
Mike paid $ 70,000 in federal tax last year on his $ 250,000 annual income. This is equivalent of almost 40% of his total wealth. While Tom also paid the same amount of federal tax ($ 70,000) last year but this tax is equivalent to just 2% of his total wealth.
Well, Yes. Tom’s Net Worth is well above $ 3.5 Million (3,500,000).
So what is this disparity between Mike & Tom? Well, because Tom consumes less income every year in comparison to his total wealth. Most of the time his earned income is in the form of Capital Gains and appreciation in the value of his assets. In simple terms, whatever he makes, he invests.
On the other hand, Mike is a professional person. So to maintain his high status life style, he has to consume more income every year and in order to consume more income, he has to pay more in taxes and thus he cannot accumulate more wealth.
This scenario is an example of most of the high income groups of people. They earn a lot but still they cannot accumulate enough wealth and struggle financially and sometimes are living paychecks to paychecks.
So the moral is this, if you want to become wealthy then your consumed Income should be less and your unconsumed income should be more.