How does one live in the world yet be not of the world?

As Christians, we are told to not be "of the world". When the New Testament uses the word "world" (kosmos in Greek) it uses it in two different ways. First of all it uses it to talk about this physical world. In this sense, Christians are very much "of the world". The second way that the NT uses "kosmos" is to talk about the fleshly, sinful environment that we find ourselves in. It is in this way that Christians are not to be "of the world". This "world" is tainted; we as Christians should not conform to the debauchery that goes on among us. We are called to live a higher life than that of society. Society will always be predominantly immoral to varying degrees because it is made up of people who are sinners. Because of this, this world will always decay and we will always see a "deterioration of morals" in every society. That is why we are called to be the salt of the earth: we need to preserve this place as long as we can. We should not live how the majority does; we are not "of this world".