A family earning $20,000 a year can be living much better then a family earning $80,000, because the first family may have very little monthly expenses, and may have found a way to earn most of their income through passive sources.
Having the notion that wealth is defined by expensive cars, designer clothes, and fancy housing is detrimental to the journey toward wealth. Considering a car is a car, it makes no sense to attach personal happiness to the acquisition of a $60,000 vehicle, when a $6,000 vehicle does its function and can have zero monthly payments.
Quality of life is important when considering the ideal of wealth. While the assertion that a four story home might add significantly to the quality of life, the means required to get one to that asset might detract significantly from the quality of life, unless the progression is a slow one. What that means is that if someone works 50 hours a week doing paperwork, commuting, and dropping kids off to a caretaker, she might be able to acquire that fantastic home in a few years; however, she could stay at home, working a few hours a week and make a small portion of her previous income. If much of her income was passive income, she’d be free to explore other income opportunities, spend time with her family and enjoy what she has.
Passive income can come in many forms. One can buy a home and rent it to someone, publish writing for royalties, invest in annuities to earn a residual income, or explore other business opportunities which deliver a monthly income that does not require time. Time is money, and since life is so oftentimes declared to be so short, why would anyone want to spend a huge portion of it earning money for someone else.
You have to define your own personal wealth. If you could do anything you wanted to do, what would you do? What income would you need to pay all of your current bills, and what can you live with or without? There will always be things you’ll want. Without challenges, life would be boring. Define that limit for you and your family, and work toward finding income sources that will bring you into that level.
Wealth, more than what most people would consider, is having a lot more time than other folks.