The Difference Between Being Rich and Being Wealthy
In a year of economic turmoil, we wanted to share our thoughts when it came to building a secure financial future. And although at face value being “rich” and being “wealthy” might seem like the same thing, they’re actually quite different. Here’s what you should know.
1. WEALTH IS SUSTAINABLE
When we think about wealth, it typically refers to the kind of money that lasts generation after generation. This is a different kind of financial security that goes beyond the liquid money you have in a bank account. Typically this kind of wealth comes from assets and other financial investments that are not necessarily represented in cash.
2. BEING “RICH” CAN BE EXPENSIVE
For many “rich” individuals, it’s not uncommon to also live an expensive lifestyle. Flashy cars, wardrobes, and houses are often a popular trend among those who may even live beyond their means. In some cases, being “rich” can also mean living in debt.
3. THE “MILLIONAIRE” NEXT DOOR
Wealthy people don’t necessarily own the latest gadgets or luxurious cars. What they do have, however, is a diversified asset portfolio that is focused on the long-term advantages. Typically, wealthy individuals save and invest most of their money rather than spend it. Turning cash into assets is the best way to build wealth over time.
4. HOW TO BUILD WEALTH (THE RIGHT WAY!)
There are a number of ways that you can build wealth, and we wanted to highlight just a few of our favorites. Make sure to remember that each strategy is unique to each person, and not all strategies may work for you. Depending on your needs and goals, you’ll want to decide on which path is the best fit.
One way to ensure that money is set aside is to save 10-15% of your paycheck every month. Additionally, you’ll want to pay off your debt as quickly as you can, starting with those accounts that have the highest interest. Next, focus on investing. You’ll want to invest your assets as early as you can to capitalize on long-term gains. And finally, make sure to consider your future goals. Wealth does not happen overnight, and it takes time and patience. You want to be strategic (and realistic!) about your expectations. Make sure to adapt your own strategies to fit your unique goals, both for the long and short term.
