Assets and not your income will decide whether you will be wealthy

We all believe that having a high income will make us wealthy. A high income can support a comfortable and even a luxurious lifestyle but it is not sufficient to create wealth. To create wealth one needs to to utilize the income to create assets.

One can compare the American middle class with the poor in India, China or Africa to be able understand the why an income is not sufficient to make us wealthy

Many young people in rich countries have no assets and a wallet full of maxed-out credit cards. Technically, their debts make them poorer than African peasants who have nothing. But they enjoy a much higher standard of living and far better prospects. In Denmark and Sweden a startling 30% of the population say their debts exceed their assets, but few go hungry. Many have simply taken out large student loans which an indulgent government allows them to repay very gradually. - The Economist

The American or the European middle class surely have a higher income and a uncomfortably better lifestyle than the Indian or African poor but both may have a net worth of close to zero. To be wealthy, one should be able to convert the income into assets.

The richest 1% of adults control 43% of the world’s assets; the wealthiest 10% have 83%. The bottom 50% have only 2%.  - The Economist

One of the many reasons that all among the high income group are not wealthy is because converting a high income into assests is not easy. Not all have the financial intelligence to use money to create more money.

If we gave 100 people $10,000 at the start of the year, I gave my opinion that at the end of the year:
80 would have nothing left. In fact, many would have created I greater debt by making a down payment on a new car, refrigerator, TV, VCR or a holiday. 16 would have increased that $10,000 by 5 percent to 10 percent. 4 would have increased it to $20,000 or into the millions. - Rich Dad, Poor Dad By Robert T. Kiyosaki

The trick to being wealthy is avoid being among the 80 percent of the masses who would either spend the money they got for free or create more debt using the free money.

While we spend most of our time thinking about our salary and the raise we are going in the next year, we may not give adequate attention about the assets we are creating from our salaries. Its nice to get high salary hikes every year. However, it would be better if the growth in our assets every year is higher than the salary hikes we are getting.