Wealthy individuals understand that wealth is not the same as income. While income is the amount of money that people earn each year, wealth is the amount of money that people accumulate over time. In other words, wealth is the net worth of individuals, and it is the total value of their assets minus their liabilities.

The authors of the book highlight that many people who earn six-figure incomes are not wealthy because they spend everything they earn. These individuals often have a high standard of living, which means they spend a lot of money on things such as cars, vacations, and expensive homes. This lifestyle often leaves them with little or no savings, and they are not able to accumulate wealth over time.

In contrast, many wealthy individuals have modest incomes, but they are able to accumulate wealth over time by living below their means. They are frugal and make wise investment decisions, which allows them to grow their net worth over the long-term. They also tend to avoid debt, which helps them to avoid paying interest on loans and credit cards.

The authors provide several examples of individuals who have accumulated wealth despite having modest incomes. One example is a janitor who worked for a school district and was able to accumulate over $2 million in savings and investments over his lifetime. Another example is a couple who owned a small business and lived in a modest home, but were able to accumulate a net worth of over $1 million.

Overall, the key takeaway from this key idea is that wealth is not just about how much money people earn each year. It is about how much money they are able to accumulate over time by living below their means, making wise investment decisions, and avoiding debt.