Money Management: Is rich equivalent to lots of money?

Is a high income earner a rich man? Is a person who is driving a big car and staying in a big house a rich man? Is blue collar’s life hard as they are earning less?

Not necessary.

If you spend every single cent you earned and involve in huge credit card outstanding, the financial condition of this white collar is actually worse than those blue collars with savings.

Take an example. Say a white collar earns $10,000 a month. He will not have any savings if his monthly spending is at $10,500. He has no savings but need to spare another $500. On the other hand, a blue collar with $1,000 monthly salary, he will be richer than the white collar if his monthly spending is at $800. The blue collar will be able to save $200 every month while the white collar has to work hard to pay off his debt.

The bottom line is, high income does not mean rich. The true meaning of rich is how much you can save but not how much you earn.

Shall we plan ourselves to become “rich” man?