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We Help Successful Women Set Up Investment Plans That Produce All The Income They Need to Live Their Best Life, For Life.

Rich vs Wealthy: What’s the Difference?

How can there possibly be any difference between rich vs wealthy? Money is money and it’s nice to have a lot of it.

Well, there’s actually a big difference.

And the difference has a lot to do with your ongoing financial stability. 

The choices you make about your finances determine whether you have lots of money now or lots of money later.

We talk a lot about (seemingly) rich people. People with sports cars. People with maids and butlers. People who can travel endlessly.

In fact, most of our media and pop culture revolves around rich people — movie stars, athletes, and anyone else we consider a celebrity. 

We kind of take “rich” for granted.

It’s lost its meaning as an achievable goal based in reality and instead has become synonymous with a certain kind of lifestyle.

But, then there’s this word “wealthy.” What does that mean?

The difference might really surprise you.

Don’t get us wrong, rich and wealthy is definitely the dream.

But, since neither is easily attainable without a plan, understanding the difference between rich vs wealthy can really help you redirect your goals so that you’re focused on the right kind of money to roll around in.

Rich, But Not Wealthy

Okay, so let’s start by saying that not all rich people are wealthy. 

There are plenty of rich and famous people who spend well outside what they earn simply because they can (with little fear of repercussion).

Being rich doesn’t mean you manage your finances well.

Also, when you’re rich, a weird thing happens — you get used to living like you’re rich, so you start to behave as though you will always be rich, whether your income reflects that or not. 

Before you know it, you’re spending way more than you can afford simply because you’re used to your rich and famous lifestyle… and constantly want more

So, this causes a lot of rich people to end up losing everything.

One big example of this is former NBA players — 60% of them are broke within five years of retirement.

So, let’s assume that being “rich” is based on how much money you earn.

To be in the top 1% of income at the age of 25, you need to earn $160,000 per year and that number grows the older you get.

If you’re simply rich, you’re most likely spending all of that money (or more).

When everything is said and done, you have nothing left.

Fun in the moment, but not necessarily financially stable. Bummer.

(Unless you’re one of these five celebrities, who happen to have huge net worths but famously frugal spending habits. It’s all about money management!)

The Definition of Wealthy

While being rich is about the money you earn, wealth is the value of the assets you own. 

This can include your bank accounts, your investments, equity in your home, real estate, or any businesses you own.

To be wealthy, the objective is to continuously build or acquire assets that maintain their value or generate ongoing income. 

In short, being wealthy means making smart financial decisions and investments that will allow you to thrive for a longer period of time (ideally, your whole life) rather than simply earning a lot and blowing through your money quickly.

While words like “stocks” and “assets” might not feel as glamorous as “Lamborghini” and “private jet,” being financially savvy has its benefits.

If you create a budget, pay down debt, and invest in a retirement plan, you’ll ensure that you have enough money to live on when it’s time to kick back and relax. 

You don’t have to skip the things you love like fancy coffee or frequent travel to become wealthy — you just have to make informed financial decisions along the way that will help your money grow.

Wealth ensures you’ll have money for the future, while being rich just ensures you have money to spend right now.

Can I Be Both?

You can be anything, baby!

If you’re a high earner who also has a sound financial strategy, you can easily watch that money grow into wealth over time.

Saving 7-10% of your income is a great place to start but, you can pick any number that feels right to you.

Just remember, the more you save, the more money that money will generate and the earlier you can retire.

After you’ve saved enough to pay off debt and have a nice emergency fund, the next step is to invest wisely and watch that money grow!

Before you know it, you’ve turned rich into wealthy.

You can accomplish anything you put your mind to, but, if you have a choice between rich vs wealthy, wealthy is always the better choice.

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