$30k Salaries, Yet In Serious Debt: Why High Income and Wealth are not the same

High Income vs Wealth

I always remembered as a child, my parents would always tell me, ”Don’t play so much, study hard so that you can get a good job next time!”

I’m sure many of you would’ve had the same experience. Being an Asian country, Singapore definitely took after traditional Asian values, with focus being placed on results and achievements.

It was understandable, for many of our parents and grandparents had endured hardships that they wanted to ensure we did not go through as well. 

And for them, the road to wealth was paved with a high income for which the surest path was with good grades and a respectable job: doctor, lawyer or engineer.

Which is why it must have been a little shocking to see the Straits Times article in the news the other day titled, “$30,000 Salaries, Yet in Serious Debt”. Looking past the fact that many of us do not and probably will not ever earn $30,000 per month (and that’s okay!), I feel that there are important lessons to take away from this article.

Wealth and High Income are Not the Same

Most people associate wealth and income and the terms are often interchangeably used. If someone had a high income, they were wealthy, and the reverse applied as well, that being if people were wealthy, they had a high income to get there.

However, wealth is not about income, wealth is about assets. The Merriam Webster definition for wealth states that wealth is:

“An abundance of valuable material possessions or resources”
Now, nowhere does it say that you need to earn a lot to be wealthy. In fact, nowadays, many people tend to associate wealth with freedom as wealth grants you the power to be (financially) free. Author James Clear, of Atomic Habits, once remarked:
“Real Wealth is about freedom”

And honestly, I couldn’t agree more myself. We work hard at our jobs, not simply to get a higher income, but to acquire more assets which in turn is accumulating wealth to build towards our financial freedom.

High Income is Useless With Equally High Spending

Parkinson’s Law (no, not the disease), is a humorous term coined many years ago to describe the concept that work expands to fill the time allotted to it. What this means is that if you had 4 weeks to complete a task, you would take 4 weeks to do it, even if you could’ve finished it in 2.

Similarly, when it comes to finances, people will spend more as they earn more, causing them to live paycheck to paycheck. I’m sure you’ve experienced this feeling at some point where you look at your bank balance at the end of the month and wonder where all your money went. This is known as lifestyle inflation, a phenomenon where your expenses increase together with your income.

High Wealth Problem

Photo by freestocks on Unsplash

New cars, new houses, new TVs the list goes on. In the US, they call it keeping up with the Joneses, referring to succumbing to peer pressure to keep up with your neighbours in the accumulation of material goods. It’s easy to feel like the king of the world when you nail a high paying job. And yes, you might even be able to afford everything at the start.

Many Singaporeans  find themselves in high debt because when they take a loan it feels like they can afford it. Two loans, three loans later, it still feels like things are going swimmingly because the monthly payments still look small. That is, until your salary goes away.

With nothing to fall back on, the thrill of a high salary is very quickly taken away.

Wealth comes from assets

So, what is the moral of the story?

If I had to give it a go, it would be that if you don’t put your income into assets, you won’t find real wealth because your income comes into your bank account, only to be spent.

Once your income is lost, your spending power is lost. Most people are unable to last long without their income. In fact, in a survey conducted by OCBC, 2 in 3 Singaporeans do not have enough savings to last them 6 months.

Wealth from assets buys you the freedom to do what you want. This is actually what people think of when they think of rich people and their lifestyles. Think of relaxing at the beach with a cool drink, or travelling the world for long periods without worrying about work.

Wealth buys you the security and the peace of mind that you have something to fall back on.


To close off, it is important for us to know what we want and to take the necessary steps to get there. You must do what others won’t, so that you can do what they can’t.

I will concede though, that it is definitely easier to build wealth with a high income. With a higher income, it is easier to save a larger portion of your income to grow your wealth with.

But ultimately, a high income with no control is meaningless. A person earning $30,000 per month and spending $29,000 is worse off from someone earning $4,000 and spending $1,000. The key to building wealth is in your mindset. And that I think is an important lesson for all of us.

Photo by Matt Lamers on Unsplash

Enjoying the content?

Get new content straight to your mailbox!

Leave a Comment

Your email address will not be published. Required fields are marked *