Rich vs. Wealthy - Is There a Difference?

Many of the younger people I talk to on a daily basis have a common goal, “to be rich”.

But what does it truly mean to be rich? Is it an amount in your bank account? A number on your paystub? A fancy house, or an expensive car? In reality, everyone has their own version of what being rich means to them, but personally, I’m more interested in being wealthy.  

Let me explain what I mean.

One way we could define “being rich” is by making a lot of money from your job or business. Someone who is a high performer and gets paid a lot for it. And while, yes, I do want to be a high performer who makes a lot of income from my job, that doesn’t always guarantee you’ll be wealthy.

So what is my definition of wealth then?

It’s simple, owning large amounts of assets that never stop paying you money. This can be in the form of stocks, real estate, or passive businesses. Well then, which is better? To be rich, or wealthy? Ideally, you’d like to do both - being rich makes it a lot easier to become wealthy. 

But, anyone can be wealthy. Not everyone can be rich. So what is the blueprint?

How do I become wealthy? It’s fairly simple in theory -

• Live below your means

• Build up an adequate amount of cash in an emergency fund - 3 to 6 months of your spending need

• Invest as much as you can every paycheck into a broadly diversified portfolio aligned to your goals and needs.

• Then all you have to do is wait, let time & compound interest do its thing and you can build massive amounts of wealth.

To achieve both richness and wealth, it's essential to strike a balance between enjoying the money we are earning now and being responsible with our finances. It's okay to enjoy the things we've worked hard for, but it's equally important to save and invest for the future. Building wealth may require sacrifices and delayed gratification, but it can lead to financial freedom and security in the long run. And those are priceless feelings. That is why we’re so passionate about what we do. 

If you are curious about building wealth, feel free to reach out! 

Will