Income profile of a wealthy person

Since we know that assets and not our income will decide whether we will be wealthy it would be interesting to discover the impact of asset ownership on our wealth. Assets generate passive income which alter our overall income profile. The overall income of any person consists of two components active income and passive income. The interplay between active and passive income as person becomes wealthier provides an alternate view on the same fact that assets and not our income will decide whether we will be wealthy.

Contribution of passive income to the total income stream

As a person becomes wealthier, assets increase and so does the passive income from the assets working for us in generating cash flows. Over a period of time the importance of passive income keeps on increasing in the overall income stream.

So the formula to being wealthy is a simple concept, i.e build assets to generate passive income streams. Though as simple concept it is not as simple a concept to execute on.