Income vs. Wealth in Real Estate: What’s the Difference?

Personal Finance5 min read

Everything you need to know in bite size form.

Johnpaul Moses
Johnpaul Moses

Do you really want to have to work until you’re 67 years old before you can finally retire? 

Well, if you don’t build income-producing assets outside of a job, that’s what your fate is. 

See, there’s a difference between income vs. wealth in real estate.

And that’s exactly what we’re going to talk about in this article so that you can steer clear of this fate. 

Income vs Wealth: What’s the Difference? 

What is “Income”?

Most people who get into real estate investing don’t really understand that their gateway into the real estate investing ecosystem isn’t really investing at all.

Say what?!

Yep, because whether you’ve gotten into REI by fixing and flipping or wholesaling — you’re not really an “investor.” 

If you’re flipping houses, you’re actually a high-income earner … and that’s awesome! 

It’s valuable, sure, but being a high-income earner is not the same thing as being wealthy. 

Let’s say you suddenly have to go into the hospital for a few weeks (of course, we hope this never happens!). 

Well, your income dries up during your stay. 

And you’re broke. 

What is Wealth?

But! If you build wealth through cash flow-producing assets — like rental propertiesthat’s true wealth. 

When your money is working for you versus you working for your money… 

And when you’re flipping houses, you’re still working for your money. Yes, you’re working at a high level as a high-income earner, but you’ve still gotta do deals to keep that money train going.

Building wealth, on the hand, is when your money is propagating itself… it’s throwing off cash flow, and that type of income — from assets — is wealth. 

A regular 9-5 J.O.B. is not necessarily wealth-building. 

You certainly don’t want to work long and hard to produce the income you need to invest in assets that will pay your future salary or retirement. 

Instead, you want to generate income streams outside of job income that you can invest in cash flow in real estate and/or investing in other opportunities that will produce revenue outside of job.

Now, some of these ideas are coming from our Awesomely pal Lee Arnold of COGO Capital, which serves as a broker, connecting people with funding to those who need it for deals. 

In fact, we created an awesome training program together, called The Capital Syndicate. I encourage you to take a looksie at it.

But I digress… 

Lee’s #1 goal for his clients is $250,000 in liquid cash — through flipping, wholesaling, selling through brokering, etc.


Because if you don’t have cash to invest in real estate, you’re going to have to buy real estate in areas where sellers will sell it to you and not require you to give them any cash. 

Do you want to know where those properties are located, where you don’t have to come up with any cash to buy it? 

In places you don’t want to own real estate. :/ Bummertown.

See, the reason Lee’s clients are told to generate a quarter-million dollars in cash is so they have the 20% or 30% they need to put down to get bank financing at the best rates, even if they’re as much as say, 7% or more.

That’s so that they can buy better real estate in better areas to attract better tenants, to get better, more consistent rental income. 

Because rental income is passive income, which produces wealth.

Makes sense, now, right?!

Lee’s business takes this concept one big step further. And I’m mentioning it, because you need to be aware of this as we’re talking about income vs. wealth.

Lee’s #2 goal for his clients is for them to become an accredited investor, which means $1 million in investable assets outside equity and primary residence.


So they can invest in opportunities that only accredited investors are allowed to look at. 

Did you know that less than 5% of the U.S. population is accredited? 

That means 95% of the people you encounter do not have the financial means to even be introduced to the opportunities that exist for the accredited person…

Pretty crazy, huh?

The accredited person easily generates 12%-20% return on their money on an annual basis, pretty easily, pretty regularly. 

While the unaccredited investor has to rely on things like 401(k) — which have been getting better, but not awesome recently — or they have to invest in CDs and different types of income opportunities that accredited investors would never touch. 

Why would an accredited investor never touch a non-accredited investor investment? 

Because they are slow and don’t produce much in revenue. 

So, when Lee helps his clients become accredited, they’re getting the opportunity to see the best income opportunities that exist in the market, which is only available to 5% of the population. 

So, let me ask you another question: What’s your plan? 

Let’s say you’re making $150,000 a year. That’s awesome! Good for you, indeed! 

  • But how much do you have left at the end of the month? 
  • How much are you saving? How much are you investing into cash-flowing investments? 
  • How much are you putting into an account that can be used specifically for investing in real estate? 
  • How much??? 

Again, 5% of the population is accredited, which means 95 out of every 100 people do not meet the criteria to even be presented with incredible opportunities. Lee’s company exists to change that reality.

Do you really want to have to work until you’re 67 years of age before you can finally retire? 

Well, if you don’t create wealth through cash-flowing assets, you might not have a choice.

So yes, while wholesaling and fixing and flipping are active income sources… they’re not income-building assets that create wealth.

That comes from investments like rentals that create cash flow. Income is great, of course; wealth is built through cash-flowing investments.

Now get to it!

 -JP (with a big assist from Lee Arnold!)


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