The word wealth is often confused with income. Wealth could be of various forms, there is spiritual wealth, material wealth, time wealth, etc. Wealth simply means an abundance of something you find valuable. Some people would rather have more time to pursue personal interest, others like material wealth, while others do not place a lot of value on material things but rather value spirituality. All of these values are not mutually exclusive and it’s up to the individual to decide what matters to them.

On the other hand income, is an amount of money brought in from your pursuits. Income could come from a job, a business or investments you have made in the past.

This article focuses on the difference between financial wealth and income. It is possible to have income without wealth. And it is also possible to build wealth with your income. However, as entrepreneurs, we sometimes forget that our business can be a great source of wealth and not just income. Growing your business from an income producing machine into an asset takes some thought. You could have a business that brings in a lot of income but is worth little at time of retirement. This means you cannot sell the business and you retire with very little if you have no other source of wealth.

Creating wealth in your business involves building assets. Assets can be tangible or intangible. Intangible assets like creating systems in your business could increase the multiple at which your business sells. Your systems should include the three legged stool every business should have namely, marketing, financing and operating. All systems running together help your business run smoothly and creates an asset which can be sold for a higher return at a later date.