Every financial decision – whether to purchase, to invest, to borrow, to insure, to earn, or to not do these things needs to be made in relation to income. If you are going to make an investment, for example, what income will it generate – today or down the road? If you are making a purchase, how much income was required to pay for the item?

Why? Because you don’t live on cash in the account. You need a regular flow of money coming in to your home. This amount is a more relatable number as well. The larger accumulated amount of money is not a number we often talk about or think about in day-to-day activities.