Rich Vs Wealthy
Usually when we look at people that make a lot of money or have a lot of resources, we see people that are rich; but there are actually two separate classes of people, not all the people who generate a lot of money are created equal. Those two classes are those that are rich and those that are wealthy. It’s easy to confuse rich people as being wealthy because of the outward appearance but wealth
So let’s look at the common misperceptions of rich and wealthy people and you can see the differences between the two and how you can start focusing on building wealth:
1. The rich focus on appearances. The wealthy focus on the bottom line
Rich people often feel like they have to keep up a certain image that they are successful and their primary focus has a lot to do with appearances such as what they wear, drive, where they live and what they do. Wealthy people also think about these things, but it’s not their primary focus, it’s more of an afterthought; the wealthy primary focus is on the bottom line. Wealthy people will pass up wearing high end clothing, driving fancy cars, etc. because they rather have a large bank account than a smaller one and look rich. Wealthy may not even look rich, but their bank account says otherwise.
2. Rich focus on their paycheck. Wealthy focus on their assets
Rich people usually have one source of paycheck, usually a job, and their main focus is on increasing their income from that one source. However, wealthy people focus not just on their paycheck but acquiring assets and creating multiple sources of income. If a rich person is unable to do his job or has to take a pay cut then he or she will quickly be in financial trouble but if a wealthy person loses a paycheck he (or she) has other assets that can also provide additional income.
3. Rich focus on monthly payments; wealthy focus on total costs
The rich focus on the monthly cost of items, such as how much a car payment is or how much the monthly payment is if they buy a TV or furniture on credit. Wealthy people don’t care about monthly payments, wealthy people avoid debt at all cost and pay for items right out and don’t have a monthly payment and they will wait until they can pay for those items outright. Wealthy people focus on staying out of debt, because debt erodes future prosperity.
4. Rich are usually high earners; wealthy may not always be
Rich people are usually people that are high earners, whose job pays them a lot. Wealthy people many not earn as much but are not wealthy because of how much they earn but because how much they keep and how they make their money work for them. Rich people are only rich because of how much they make from their job; wealthy people are wealthy because of their mindset. Rich people work for their paycheck and wealthy people make their paycheck work for them.
5. Rich people’s money rarely stand the test of time; Wealth people’s money last for multiple generations
When the Rich stop earning significant money from their paycheck, then they are no longer able to sustain their lifestyle. Eventually over time, their money disappears. Think of all the musicians, athletes and others who made a lot of money; only to find out later that they are now broke. Wealthy people, however, either amass significant amount of money that last multiple generations or they have assets that they can pass down to their children that still produces money.
6. Wealthy people focus on being financial literate
Finally, the difference between the wealthy and everyone else isn’t ability, talent or luck but is because they strive to be financial literate, to understand how money and how investments work and how to accumulate wealth. Wealth is a mindset and order to master that mindset you have to set yourself to learning how to accumulate wealth.
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