Do You Know the Difference Between Rich and Wealthy?

Riches and rich people have always fascinated the human kind. Rich people have the money to buy whatever they want without having to worry about affording it. Not only can they buy the best items but also get hold of products in short supply by paying a premium. They are treated with respect and get special privileges wherever they shop.

Rich people’s lifestyle is very appealing – everyone wants to be rich
Rich and famous can simply buy expensive things instantly. People associate the rich with expensive status symbols like luxury cars, 5-star hotels, foreign vacations and fine jewelry. They also live in houses located in elite neighborhoods. Such lifestyle is beyond the budgets of most people.

The Rich lifestyle not only implies that these people have deep pockets to sustain their fancy lifestyles. We would also expect every person with lots of money to not care for money or to spend it impulsively.

Some people get rich quickly
Wondering how people get rich? People become rich instantly. At the same time, they can also lose their riches in a flash. Examples of the people who become rich quickly are: new celebrities, lottery winners, people who inherit wealth suddenly or a poor farmer in a village, close to which suddenly a new industrial zone is setup.

Are rich and wealthy the same?
As every layman, you too might be thinking that being rich and wealthy are the same. Regardless of the way we think, there are two kinds of people with money.

  1. People who have lot of money and who spend away all their money earned in a year or worse, sell away their physical assets (land, buildings etc.) to keep up with their fashionable and impressive lifestyle.
  2. There are also people with lots of money but spend very carefully and less than they earn. They tend to hold on to wealth rather than spend money on an impressive lifestyle.

Being wealthy is not the same as being rich
Thomas Stanley, a famous American author, describes wealth in his bestselling book “The Millionaire Next Door”. He says, “Wealth is not the same as income. If you make a good income each year and spend it all, you are not getting wealthier. You are just living high. Wealth is what you accumulate, not what you spend”. He also says, “It is seldom luck or inheritance or advanced degrees or even intelligence that enables people to amass fortunes”.

“A Man is rich in proportion to the number of things he can afford to let alone” says Henry David Thoreau, a famous American philosopher.

Stanley says the more wealth a person has, the more likely that person will say, “My success is a direct result of loving my career or business.” He says “Wealth is more often the result of a lifestyle of hard work, perseverance, planning, and, most of all, self-discipline.”

Difference between the rich and the wealthy

Thus, the great difference between rich and wealthy is that rich is living high by spending all that money they have; wealthy is living below their means using financial intelligence. Financial intelligence enables us make right decisions and lifestyle choices. It plays a crucial role in building and maintaining wealth.

In fact, most of the wealthy people with big bucks live well under their means. Take for example, Warren Buffett, a superrich American investor, still lives in a modest home purchased in 1958, in an upper-middle class neighborhood and not in some palatial building with impressive decorations. He puts his money instead, towards those investments that help him stockpile more wealth. Like him, many of today’s millionaires seem passionately determined to appear middle class. Thus being rich does not accumulate wealth, it is a fancy lifestyle that gets easily noticed by a lot of people.

In general, most people who wanted to be rich had a difficulty maintaining it. While most wealthy people have been able to maintain that wealthy status.

You may also like to read:
How You Became a Spendthrift and What You Can Do About It?
What You Need to Know About Money
Personal Finance is Neither Fun Nor Easy – But Worth Pursuing
Top 10 Books on Personal Finance

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