At age 25, Jim makes $100,000 a year. He’s constantly traveling for business. He has a large home in which he often doesn’t visit some rooms for months at a time. He eats out every single night. He drives a leased Lexus, which he updates every few years at the end of the lease. He buys a whole new wardrobe every six months, taking the leftovers to Goodwill. He spends everything he brings in.

At age 25, Bill makes $35,000 a year. He lives in a smaller home and doesn’t travel much. He makes most of his own meals at home. He drives a Toyota Corolla, which he owns free and clear. He wears clothes until they’re worn, then shops at Goodwill for replacements, often picking up Jim’s barely-worn clothes. At the end of the year, he usually has about $5,000 of his income left over, which he sticks into his stock investments which earn 8% a year.

In ten years, Jim’s net worth hasn’t grown a cent. In those same ten years, Bill has $72,000 in the bank.

At the twenty year mark, Jim’s net worth still hasn’t grown a cent. In those same twenty years, Bill has built up $228,098 in the bank.

At the thirty year mark, Jim’s still breaking even. Bill, on the other hand, has $566,416 in the bank.

At age sixty five, Jim hasn’t accumulated a cent and will be working for the man for the rest of his life. At the same age, Bill has $1.3 million in the bank and can do whatever he wants for the rest of his life – and probably already started doing that a few years earlier.

It doesn’t matter how much you earn. It matters how much you save.

When I was twenty five, my net worth was negative and heading south rapidly. I spent more than I earned and I didn’t really worry about the consequences of it. I figured if I had the money – or the credit – I certainly ought to spend it in whatever way made my life more enjoyable right now.

I’m now thirty one. My net worth is still negative (although it would be positive if I counted the value of my home towards it, which I do not), but it grows every month in a positive direction and will soon become positive even without the house value.

One might immediately think that I must have made my life less enjoyable to make that change. Actually, my life is more enjoyable now.

I have a better grasp on the things that actually make me happy and I don’t waste my money on things that don’t.

I’m not chained to a desk and a career, fearing the pink slip – I set my own career rules and goals.

I’m not afraid of getting the mail any more and I don’t wake up at night worried about how I’m possibly going to make ends meet or pay all of this off in the future.

Perhaps best of all, my financial position is improving every single month and I no longer see the long-term future as some kind of musty cloud that will “work itself out.” I know it’s getting better and I know that, if I continue on this path, I’ll be able to easily have some of the big things I actually want in life, like a beautiful house in the country with some wooded land in the back.

My life now is something I’ll happily trade having a shiny new Lexus and an iPhone and a set of high-end golf clubs and eating out every night for. In exchange, I’m not worried about the future and I have career and personal freedom I would never otherwise have.

Wealth has little to do with how much you earn. It’s how you spend – or save – it.