Wealthy vs Rich, which one are you?
Everyone wants to become wealthy or rich and be able to live comfortably and enjoy all that life have to offer.
When we think of being rich or wealthy, we might think it’s the same thing but it’s not. Wealthy vs Rich might seem like synonyms, but in the personal finance dictionary, there is a big difference between the two. For some reason, the words rich and wealthy are often incorrectly used to describe the same thing.
This piece will examine wealthy vs rich in detail by providing some useful tips that will help clearly distinguish between being rich and being wealthy.
What does it mean to be rich?
Being rich is simply being able to afford a relatively comfortable life. It can be likened to the amount of money in your bank account or how much income you make. According to personal finance experts, there are factors that qualify one to be considered rich:
- Income
You’re a rich person if you receive a high salary that allows you to live comfortably while being primarily sustained by your paychecks and bank account, which help you navigate your high cost of living and many expenses.
- Showing Off
You’re considered rich when you live a flashy lifestyle; always showing off how much money you got.
- Extravagant spending
Another obvious makeup of a rich person is spending extravagantly. A rich person spends freely without having a second thought. A practical example is someone who makes $100,000 a year but spends $150,000 in expenses.
In summary, you can become rich by winning the lottery or earning it in a few short years as a professional ball player or entertainer but that doesn’t make you wealthy.
What it means to be Wealthy
According to Investopedia, Wealth measures the value of all the assets of worth owned by a person, community, company, or country. You are considered wealthy when you are able to accumulate many valuable resources or goods.
Not all rich people are wealthy, but all wealthy people are rich. Wealthy people do not work for money but money works for them. Wealthy people are mostly employees and business owners; they have control of their time and schedule. Wealth can be measured by networth, for example, Elon Musk, the world’s wealthiest man has a networth of $237.9 billion.
Wealthy vs Rich: What is the difference?
- Financial Planning: The wealthy plan their finances and budget before making any expenses. On the other hand, the rich engage in little to no financial planning.
- Investment: The wealthy have long-term investment goals whereas the rich spend their income
- Assets: Wealthy people acquire assets, and invest in real estate while the rich spend money on liabilities like luxury cars.
- Income Type: Wealthy people have multiple revenue streams to reduce risk and diversify their income while the rich rely on a high salary or income, with no long-term investment plan.
- Rich people have money but no time whereas the wealthy have money and are still in control of their time.
- Rich people are not wealthy but wealthy people are rich.
Do you want to be wealthy? check out: 21+ Ways to Make Money in One Hour
Difference between Rich and Wealthy quotes
“Wealth is not about having a lot of money; it’s about having a lot of options.”
Chris Rock
“Happiness is not in the mere possession of money; it lies in the joy of achievement, in the thrill of creative effort.”
Franklin D. Roosevelt
“To acquire money requires valor, to keep money requires prudence, and to spend money well is an art.”
Berthold Auerbach
“The real measure of your wealth is how much you’d be worth if you lost all your money.” Unknown
“Earn with your mind, not your time.”
Naval Ravikant
“Never spend your money before you have earned it.”
Thomas Jefferson
“The habit of saving is itself an education; it fosters every virtue, teaches self-denial, cultivates the sense of order, trains to forethought, and so broadens the mind.”
T.T. Munger
“Don’t tell me where your priorities are. Show me where you spend your money and I’ll tell you what they are.”
James W. Frick
“It is better to have a permanent income than to be fascinating.”
Oscar Wilde
Related: What is a Joint Brokerage Account? Should you have One?
FAQs on Wealthy vs Rich
Wealthy is the state of having an abundance of material possessions and money while rich is the state of having a huge amount of money in one’s possession
Yes! being wealthy is not only having enough money to meet your needs but being able to afford not to work if you don’t have to.
A wealthy person has a large amount of money, property, or valuable possessions
References
- https://www.investopedia.com
- https://review42.com/resources
- http://www.differencebetween.net
- https://www.clevergirlfinance.com/blog/rich-vs-wealthy/
- https://www.positivityblog.com/quotes-on-wealth-and-money/
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