Being rich and being wealthy are two vastly different things
There seems to be some confusion among people over which is better: rich or wealthy. Sometimes people use the two words as though they mean the same thing. This could not be further from the truth.
Being rich often means having a high salary. Sure, someone with a high salary might be wealthy but someone like that is generally the exception and is not the rule. People such as doctors, lawyers, and architects often fall into the rich category. They earn a salary and have to live on this. Their debt management skills are not perfect, hence they are dependent on their paycheques. Doctors, lawyers, and other salaried professionals who earn passive incomes and who play the stock market are possibly the next Donald Trump or Warren Buffets.
There are two main differences between being rich and being wealthy. The first is in the duration of the money. That means how long that salary, lottery win or inheritance lasts. Does it last longer than 1 month, year or generation respectively? Or does it get frittered away by debt before it can become a hardworking employee?
That’s how wealthy people see money – as their employees. Money needs to work hard in order that their owners can retire at 40 and sail the world with a Cosmopolitan in hand. And like all employees, money needs to be properly managed. Wealthy people know this, which is why they’ll never be poor, even if they lose all their earnings tomorrow. The reason for this is because of the second difference between rich and wealthy: the wealthy know how to generate more money and to stay away from debt. This is because truly wealthy people see opportunities in everything and they take risks to get to where they want to be.
This mindset ensures that their heirs will have an inheritance. It also ensures that their needs will always be met, even if the Great Recession turns into the Great Depression. Someone who is merely rich may flounder after a retrenchment but someone who is wealthy may prosper regardless.
Of course, this is an oversimplification of true wealth. True wealth comprises much more than money. Knowledge and contacts help tremendously. But wealth, at its core, is really about a set of beliefs or attitudes. The bad news is that it doesn’t happen immediately. The good news is that anyone can adjust their attitude or core beliefs to become the next 32-year-old yacht-sailing multi-billionaire.
This guest post was written by Harrington Brooks on the difference between being rich and wealth. For more information on debt management, visit www.harringtonbrooks.co.uk today.