One number truly determines whether you can become wealthy

On the long journey of personal finance, there is one number that truly determines whether you will become wealthy, whether you can sustain wealth in the long run. So, what is this magical number?

Some might guess it’s current net worth, but no, because it only reflects your current status and cannot guarantee your future wealth; some might guess it’s credit score, but no, because even if you were given a million dollars, your credit score wouldn’t increase; some might guess it’s annual income, which is getting closer, but still not it, as high income alone cannot ensure you won’t end up in debt; of course, there are other guesses like debts, and so on.

Due to space constraints, let’s directly reveal the answer: the “magic number” that determines whether you can become wealthy is “financial surplus,” the difference between income and expenses. Simply put, “financial surplus” is the money you can save by earning more and spending less.

Financial expert George Kamel detailed this concept on his own media channel, revealing the core wisdom of how to accumulate wealth.

Kamel used two examples to illustrate why this number is crucial: the first man at 30 with a $100,000 annual salary can only invest $3,000 a year due to debts and high spending, leading to $949,000 at retirement by age 65; contrastingly, the second man at 30 with a $60,000 annual salary but no debt and thrifty spending can invest $9,000 a year, resulting in $2.85 million by age 65. Clearly, despite the second man earning 40% less, his wealth ends up being three times more. That’s the power of “financial surplus.”

How to create “financial surplus”? It’s simple, involving the arithmetic of two numbers: increase income, decrease expenses. Cutting expenses is straightforward – it means saving money. You can start by avoiding all unnecessary expenses in daily life, such as dining out, ordering takeout, impulse purchases, and so on.

Increasing income means earning more, utilizing your skills, abilities, and resources to tilt the balance in favor of income over expenses. Whether through design, writing, programming skills, or leveraging time resources like tutoring, dog-walking, car washing, all can be transformed into wealth. Kamel mentioned he himself earned extra income through Uber and food delivery platforms, even working late nights to earn additional money.

Some may say, always thinking about making money will make life too tiring. Busy all the time, it’s better to live leisurely. This sounds reasonable and tempting, but the reality is, “financial surplus” not only leads to an increase in your bank account but also expands the breathing room in your life.

It allows you to swipe your card at the supermarket without anxiety; to repair your car without borrowing money in case of emergencies; and even discreetly help friends in need, seeing their smiles; it may enable your loved ones, relatives to live better, hearing their laughter…

In short, wealth isn’t something that falls from the sky, but is gradually achieved through the long-term creation of “financial surplus.” Whether you will become wealthy depends on whether you are actively investing. Simply focusing on earning money without planning expenses, or putting all your efforts into saving every penny without increasing income, are not advisable approaches.

No matter how much money you currently earn, starting today, pay attention to this “financial surplus” and invest the saved money in the future – this way, you may embark on the path to wealth and have more choices.

(The content of this article is for general informational purposes only, with no endorsement intended. The Epoch Times does not provide investment, tax, legal, financial planning, real estate planning, or other personal financial advice. For specific investment matters, consult your financial advisor. The Epoch Times does not assume any investment responsibility.)