How do you measure wealth? Is your neighbor richer than you because he draws a salary $5,000 more than you do? Contrary to common beliefs, true wealth is not measured by the amount of dollars a person has in his bank.
Say for example, you draw a monthly salary of $5,000 and your neighbor draws a monthly salary of $10,000.
You have a humble monthly expenses of $3,000 while your neighbor lives lavishly on a monthly expenses of $8,000. Therefore you would each have saved $2,000 per month. In a year’s time you would each have a savings of $24,000.
With the same amount of savings, you would have lasted 8 months while your neighbor only 3, if you were both to lose your jobs and having no impact on your existing lifestyles. In other words, true wealth is measured by how long your money can last you. True wealth is then dependent on how much you earn AND how much you spend. So, how rich are you?