The Difference Between Being Rich And Wealthy

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Hey there! What's the difference between being rich and being wealthy? Well, when it comes down to it, there's a few things. Before we go into that, let's talk about what it means to be rich, and what it means to be wealthy.

We hear about rich people all the time. Celebrities, for example, are generally considered rich. Then, we think of others, such as Warren Buffet, who is a wealthy person. As I'll discuss in this post, there is definitely a difference between wealthy people and rich people, so let's jump right into it.

What Does It Mean To Be Rich

In the world of personal finance, being rich simply means having a lot of money and a lot of income. Rich doesn't necessarily have anything to do with assets and net worth. If you make $200,000 per year and drive a fancy car, but have hundreds of thousands of dollars in debt, or spend just as much as you make, then you very well might be considered rich.

Rich people aren't necessarily financially free. Their financial well-being is dependent on them continuing to earn a high income so that they can support the way they live. Some rich people go broke down the road. According to NEFE, 70% of lottery winners end up going bankrupt. As rich as they became winning the lottery, they were unable to properly manage their money, and they went from rich person status to broke sometime later.

Some rich people spend a lot of money and don't keep their living expenses down. Others might be drowning in debt, such as student loan debt or credit card debt.

What Does It Mean To Be Wealthy

A wealthy person has come to the point where their money has bought them time. For wealthy people, they no longer have to worry about money, as they have enough of it to have reached financial freedom.

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Wealthy people buy up assets and make their money work for them. They may own real estate, stock, businesses, and other assets that builds sustainable wealth. They may have several sources of passive income that keeps them afloat regardless of what curveball life throws at them.

Through long term planning, keeping their monthly expenses low, and maximizing their wealth generation, wealthy people reach financial independence and never need to worry about money again.

The Differences Between Rich and Wealthy

When it comes to rich vs wealth, the main difference is that rich people have a lot of money but their lifestyle is dependent on continuing to make the money that they do. Wealthy people have enough money to not have to worry about it.

Rich people generally spend a lot of money whereas wealthy people do not. A rich person may have an extravagant house, several cars, and have expensive habits. A wealthy person may have a simple home, one or two cars, and find joy in doing low-cost activities with friends and family. Simply put, a wealthy person lives far below their means.

How To Become Wealthy

Being wealthy doesn't have to be excluded to billionaires. You can become wealthy by pushing for financial independence. Below are some ways that you can grow your money so that you become wealthy.

Save as Much of Each Paycheck as Possible

The first thing to do to become wealthy is to save as much money from each paycheck as possible. The more money you have leftover each month, the faster you can grow your nest egg. Some people seeking an early retirement will save 50% or more of their paycheck. To do this requires you to increase your income as much as you can.

Pay off All of Your Debt

In order to become financially independent, you'll need to pay off all of your debt. Wealthy people do not carry consumer debt or other debt. To remain sustainably wealthy, it's important to have paid off your debts so that you can continue to grow your money and live off it year after year.

Invest Your Money for Your Future

Investing your money will help it grow faster. When you have your money invested in assets that pay you regularly, you not only build sustainable wealth, but you also build passive income. An example of this is when you buy steady stocks that pay dividends. The stocks grow over time and the dividends pay you monthly or quarterly.

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Automate your finances so that you can invest in your future incrementally without worrying about your money day after day.

Don’t Just Work a Job, Hustle on the Side

Having a side hustle or two will help your build wealth faster. Some people who are gung-ho about retiring early will hustle 7 days a week for 5-10 years so that they can earn enough money to retire in their 30s. That way, they can spend the rest of their life doing whatever they want.

Wrapping It Up

There are notable differences between being rich and being wealthy. In the end, I believe being wealthy is the way to go as when you're wealthy vs rich, you no longer worry about money and can live your life the way you choose.

What have you done to help yourself build wealth?

What's the difference between being rich and being wealthy? It comes down to a few simple things. In this post, you'll learn why it's better to be wealthy than rich

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Cyndi
12 days ago

My husband and I were talking about this recently. There are some “rich” people who are just rich because they are in debt. Sometimes things aren’t as they appear.

Renee
Renee
12 days ago

I honestly didn’t even know there was a difference between being rich and wealthy. After reading this and makes so much sense to me! It’s so important to diversify

Rochelle
12 days ago

I never really thought about the technicalities between rich and wealthy, i just assume wealthy was a lot more money than rich like bill gates vs your typical celeb, lol

Joe @ Mini Riches
12 days ago

Couldn’t agree more! There is a clear distinction between being rich and being wealthy. There’s the MC Hammer rich, and then there’s the Mark Cuban wealthy.

Krista
12 days ago

Great comparison of the two. I didn’t know so many “rich” people later became broke in life – just goes to show you can’t have everything!

blair villanueva
blair villanueva
11 days ago

It is like being rich is about just numbers. Being wealthy is a status quo, a stress-free lifestyle with financial freedom, and time.

Michele
11 days ago

To me I think rich is just someone who does a job and gets one large lump sum or they go into debt trying to keep up with the Kardashians. Someone who is wealthy is someone who thought about their money in the long run and wants to see it keep coming back to them. Yes, they may “spend a lot” of money investing in something, but they know years from now they will make their money back, plus extra.

siennylovesdrawing
11 days ago

hmmm…I actually didnt realise there are differences between rich & wealthy, after enjoyed my read here have learnt them 🙂 cheers,siennylovesdrawing

Impersonal Finances
11 days ago

Really enjoyed this. Appearing rich is a personal branding choice more than anything. Stealth wealth is the goal!

Alyssa
Alyssa
11 days ago

Financial literacy should be taught more especially in schools while the kids are young so they can have the foundation they need when they’re already earning money. Being wealthy is the ultimate goal in life as you can help more people if you have more than enough money.

Lyosha
10 days ago

you picked a grteat and very important topic! I couldn’t agree more. wealthy is not the same as rich

John
1 day ago

You can be “rich” and spend more than you make which actually makes you “poor”. If you budget monthly and have a plan for your money including investing the money left over after you have covered all of your expenses, then you can truly become “wealthy”. All good personal finance decisions start with a monthly budget. It’s important that we teach our kids this too – parents are responsible for kids’ financial literacy as they most likely aren’t learning it in school. If you teach your kid the basics of money management (like budgeting) and help them to start investing… Read more »

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