It’s easy to assume that a person with a high income must be wealthy—but this is often far from the truth. True wealth is better captured by net worth, which considers not just what you earn, but what you own and owe. Consider this: a corporate executive earning Rs.20,00,000 a year may appear rich, but if they’re saddled with a large mortgage, car loans, credit card debt, and no real savings, their actual wealth could be negligible. On the other hand, a retired schoolteacher living modestly with no debt, a paid-off home, and a well-managed investment portfolio might quietly hold a net worth in the millions. Net worth is the sum of your assets—like cash, property, and investments—minus your liabilities. It reflects your financial resilience and security far more accurately than income alone ever can.

A personal anecdote illustrates this well. A friend of mine, Rina, worked freelance and earned a modest income compared to her peers in high-paying tech jobs. However, she lived simply, invested early in index funds, and paid off her student loans diligently. Meanwhile, another acquaintance, Ajay, was always the highest earner at parties—sporting luxury watches and driving the newest car—but constantly complained about being “broke by the end of the month.” Ten years down the line, Rina owns her home outright and travels freely, while Ajay still juggles EMIs and is dependent on his next salary. This contrast shows that income can create the illusion of wealth, but net worth tells the real story.