Discover the Surprising Difference Between Being Rich vs Wealthy

Are you striving for financial success? Wondering what’s the difference between being wealthy and being rich? People often mix up the difference between rich vs wealthy and you’re not alone. Many of us dream of having plenty of money, but often times we use the terms rich vs wealthy interchangeably.

Being rich means having a high income or a lot of extra money in your bank accounts – but when looking at your money on paper it may tell a different story (ie debts).  It is not uncommon for someone we view as being rich to lack a basic thing such as an emergency or rainy day fund.

However, there is actually a significant difference between wealthy versus rich.

• To be rich means that you earn a lot of money, and may have many material items – whether they be a nice house, car, clothes, etcn
• To be wealthy means that you not only have a lot of money, but you also have assets that generate income.

There is a big difference between being rich vs wealthy.

Rich people may be able to buy expensive things and experiences, but they can’t maintain that lifestyle forever.

Wealth is about more than just money. It’s about having the freedom to live your life the way you want to. It’s about having security and stability. It’s about being able to take care of yourself and your family. Its not about YOU being wealthy, but enough that your grandchildren’s grandkids will be wealthy as well.

So, what makes the wealthiest people different from those who are just rich?

People who are wealthy can live however they want. They can work as little or as much as they want. They can travel whenever they want. They can spend their money however they want. The main rich and wealthy difference is that being wealthy gives you the freedom to live your life the way you want to, while being rich often means having to live a certain way in order to maintain your lifestyle.

So, which one do you want to be? Rich or wealthy?

Long-term wealth is usually acquired gradually via strategic planning, asset gathering, and prudent investing. While short-term level of being rich can result from inheritances or a lucrative salary at a job.

Have you ever heard the phrase “putting your money to work for you, instead of working for your money“? 

In this article, we’ll dive into the key differences between being rich vs being wealthy, and explore how to define wealthy vs rich, the meaning of rich and the meaning of wealthy, and all of the differences between being rich and wealthy.

Rich versus Wealthy

• What is the Differences Between Wealthy vs Rich? In this article, we will examine the distinction between rich versus wealthy. I’ll define the terms, each meaning, and go over why it’s crucial to recognize their differences between being wealthy vs rich.
• Wealthy definition – how do you define wealthy?
• What is considered wealthy? What does wealthy mean? I will offer advice on determining if you’re wealthy and discuss the elements that go into achieving financial security and independence.
• What is rich? How do you define rich?
• What is considered rich?
• I will include discussions about money lessons, approach to money mindset (wealthy mindset vs rich mindset) and an assortment of money matters.  We will look at relationships with wealth and sources of wealth as well.
• Finally, we’ll stress the significance of achieving long-term financial stability and independence through investments and prudent money management.
• A Bulleted Summary of The Article
• So, how do you know if you’re rich or wealthy?
• FAQ

So, if you’re wondering what sets these two financial states apart, keep reading!

Differences Between Wealthy vs Rich

Differences between people, difference between incomes:

• Wealthy people think about the long term and focus on creating passive income sources or streams of income for future generations. 
• Even the richest people may rely on their active source of income and think more in the short term.
• Being wealthy gives people more financial freedom and the power to make decisions without being restricted by money.

Difference Between Wealthy And Rich: A Comparison

Rich	Wealthy
High income or a lot of money	Substantial net worth, with multiple types of assets
May rely on one source of income	Diverse sources of income, including income producing assets
May live a lavish lifestyle	May prioritize saving and investing
May struggle with financial stability	Financial stability and security
May have a “work hard, play hard” mentality	May prioritize gathering assets, financial literacy, and planning
May prioritize short-term gains	May focus on long-term financial planning
May prioritize spending over saving	May prioritize saving over spending
May have high levels of debt to maintain their lifestyle	Use debt as leverage
May not have a solid financial plan	Most likely have well-thought-out, written long-term financial goals

---

This article will discuss the differences between being rich vs wealthy. We’ll also look at how successful people can work toward becoming genuinely wealthy

You may be surprised to see some of the above, but let me explain. But before doing so, have you ever read the book Millionaire Next Door? If you haven’t it is a MUST READ FOR EVERYONE. I used to give out copies of the book to every single client – I think that strongly about it. To read my review on the book, click here: Millionaire Next Door Book Review

The Millionaire Next Door is a book that debunks the popular stereotypes about what it means to be wealthy. According to the book, most people believe that being wealthy means having a high income, living a lavish lifestyle, and owning expensive possessions. However, the authors argue that true wealth is not about how much money someone makes or spends, but rather their net worth, which is the total value of their assets minus their liabilities.

According to the book, the typical “millionaire next door” is a self-made individual who has a high liquid net worth but may not have a high income or a lot of visible wealth. These individuals tend to be frugal, saving and investing a significant portion of their income, and they prioritize financial stability and security over living a flashy lifestyle. They may also have a strong focus on financial literacy and planning, and they tend to have a long-term perspective when it comes to their finances.

“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 built by spending less than you earn and investing the surplus in assets that appreciate over time.”

– DAVID BACH

Billionaires, Businesses, & Financial Planning

It’s time to seize your financial future, and start building sustainable wealth! You have the power and the potential to become financially stable and independent to have impact have an impact, but first, you need difference between being rich vs wealthy.

Rich people may feel happy for a short time and be able to buy expensive things and go on trips. Outside of trivialities and extravagances, true wealth comes from having a diverse portfolio of investments turning income producing assets into wealth generators that provide a foundation for sustainable long-term financial stability, not just for you, but for future generations. 

Why Should You Continue to Read?

Don’t let your fear of the unknown stop you from trying to make money. With the key education and knowledge, a commitment to personal and professional development and financial planning and budgeting, you can give yourself and your family a sustainable financial future. So take the first steps and start creating real wealth today.

And now, one of my all time greatest stories in under a minute about the difference between rich vs wealthy.

A Client Story – Plan, Funds, Money Habits, Savings & Financial Freedom

As a financial advisor, I’ve had the chance to work with many clients who come from different financial backgrounds and have different financial goals. Sarah was one of my clients. She was a successful lawyer who made a lot of money and could buy all the nice things she wanted. 

She lived in a beautiful house, drove a fancy car, and went on pricey trips. From the outside, it looked like Sarah was rich and had everything she could want. But as we talked more about Sarah’s money, I realized that she depended a lot on her job for money and had little saved or investments. 

She didn’t have a plan for her money and spent it without thinking, thinking that her high income would always be enough.  She didn’t always take investment advice, and was unclear what her investment objectives were at times.  She would ask me about her neighbors’ awesome investment product that she just heard about, rather than a careful investment strategy.

On the other hand, I had a client named Ben who ran a small business and made a modest amount of money. Ben couldn’t buy all of the expensive things that Sarah could, but he had a portfolio of investments and turned cash into assets that brought in money on their own. He had a plan for his money over the long term and worked hard to save and invest for the future.

As I worked with these two clients, it became clear to me that being wealthy vs rich are not the same thing. Sarah had a high income and could buy expensive things, but she didn’t have a plan for being financially stable and independent in the long run. 

Her monthly expenses (current expenses, day to day living expenses and unexpected expenses) started to climb quickly.  She was now incurring debt-related expenses now too!  Running up credit card debt and carrying a balance of credit card debt.

Conversely, Ben may not have had a high income or a lot of things, but his investments and financial planning gave him a strong base for financial stability and independence.

Ultimately, knowing the difference between being rich and a wealthy person is essential, and working toward long-term financial stability and independence through investments and intelligent money management is essential. This is the reason I started giving every new client a couple of The Millionaire Next Door to read.

Knowing the difference between being rich vs wealthy is essential because it can affect how someone plans and makes decisions about their money. A study by the Federal Reserve found that about 40% of Americans would have trouble coming up with $400 in an emergency. This shows how important it is to focus on building wealth and financial stability instead of just making more money.

Also, the COVID-19 pandemic has shown that you can’t take financial stability for granted. Many of the people who used to be considered “rich” have lost their jobs and seen their income go down. This shows how important it is to have a wide range of investments and considerable assets.

In short, to be financially stable and prosperous in the long run, you need to know the difference between being rich versus wealthy. Making a lot of money and buying things can provide temporary joy, however, investing and managing your finances is the most effective method for enduring financial freedom.

“Being wealthy is not about how much money you have, it’s about how much money you have left after you’ve paid your bills.”

– DAVE RAMSEY

Define Rich?  What does it mean to be “rich” ?

What is considered rich? 

There is no universal definition of what it means to be rich, as the term is relative and can vary based on personal circumstances and the cost of living in a particular area. However, there are some general benchmarks that are often used to define wealth. For example, some define a six figure salary as rich, while others consider those with a net worth of at least $1 million as rich.

Being rich generally refers to having a high income, a lot of money or valuable possessions and resources. However, the definition of rich can vary depending on an individual’s social or economic context and their personal goals and values.

What is rich?  

Some people may define being rich as simply having enough money to cover basic needs, while others may see it as having the ability to live a comfortable or extravagant lifestyle without financial worries. Others suggest that being rich can be characterized by having a high net worth, which is the value of a person’s assets minus their liabilities.

However, it’s important to remember that wealth and material possessions are not the only things that matter in life, and having a lot of money does not necessarily make someone a good person or even happy.

Ultimately, the definition of being rich is subjective and may vary from person to person. It’s important to focus on building a strong financial foundation through smart financial planning and wise investment decisions, rather than solely striving for a high income or a lot of money.

What do you consider being rich? Feel free and comment below…

How Much Is Considered Rich? How Much Money Makes you rich?

To determine if you are rich, you can calculate your net worth by adding up the value of your assets (such as your home, savings, and investments) and subtracting your liabilities (such as your mortgage, credit card debt, and student loans). If your net worth is in the millions, you may be considered rich. However, even if your net worth is more modest, you may still consider yourself rich, if your income and savings allow you to live comfortably and achieve your financial goals.

• A high net worth is typically defined as the value of a person’s assets minus their liabilities and can include financial assets such as stocks, bonds, and real estate, as well as tangible assets such as jewelry, art, and collectibles.
• Financial security refers to having enough money to cover basic needs and achieve financial goals, while being able to live comfortably without worrying about money means having the financial freedom to afford a desired lifestyle.
• It’s important to focus on building and maintaining wealth over time through smart financial planning and wise investment decisions, rather than solely striving for a high income or a lot of money.

Ultimately, the key to achieving and maintaining wealth is to focus on long-term financial planning, including setting financial goals, budgeting wisely, and making smart investment decisions. By doing so, you can work towards building true wealth and financial security, regardless of how you personally define being rich.

“Being rich is having money, being wealthy is having time and freedom. The goal is to have both.”

-GRANT CARDONE

Wealthy Definition – How To Define Wealthy

Being wealthy generally refers to having a high net worth and a diverse range of valuable assets, as well as the financial freedom and security that comes with having a substantial amount of wealth. This can include financial assets such as

• stocks
• real estate investments
• businesses
• as well as physical assets like jewelry, art, and collectibles

Britannica notes that being wealthy often involves having a substantial amount of money and a diverse portfolio of assets.

Some define a household with a net worth of $5 million or more as wealthy, others consider that still rich and only consider billionaires as “wealthy”.

It’s worth noting that the definition of wealthy can vary depending on personal circumstances and the cost of living in a particular area.

Some people may define being wealthy as having the financial freedom to live a luxurious lifestyle, while others may see it as simply having enough money to live comfortably and achieve their financial goals. Ultimately, the key to achieving and maintaining wealth is to focus on long-term financial planning and making smart investment decisions.

What is Wealthy? What is Considered Wealthy? 

Wealthy is a term that is often used to describe individuals or households with a high net worth and a substantial income. The specific amount of money that is considered wealthy can vary based on the cost of living in a particular area. For example, according to Kiplinger, a household with a net worth of $2 million or more is considered wealthy, while those with a net worth of at least $100,000 are considered financially stable.

Are you starting to see a trend that there is no specific number than defines if you are rich vs wealthy?

What defines someone as being wealthy?

CNBC reports that the amount of money needed to be considered wealthy varies significantly based on the cost of living in different major US cities.

US News defines a household with a net worth of $2.4 million or more as wealthy, while those with a net worth of at least $1 million are considered upper middle class.

How to know if you’re wealthy

Being wealthy generally involves having a high net worth, a substantial income, and the financial freedom and security to live a comfortable and luxurious lifestyle. It’s worth noting that the definition of wealthy can vary depending on personal circumstances and the cost of living in a particular area. Ultimately, the key to achieving and maintaining wealth is to focus on long-term financial planning and making smart investment decisions.

In the United States in 2022, it is estimated that a net worth of at least $5 million will be necessary to be considered wealthy, according to Investopedia. This estimate is based on factors such as the rising cost of living, inflation, and the increasing burden of taxes and healthcare costs.

Being wealthy generally involves having a high net worth, a substantial income, and the financial freedom and security to live a comfortable and luxurious lifestyle.

A high net worth, which is the total value of a person’s assets minus their liabilities, is often used as a benchmark for wealth. A net worth of $1 million or more is generally considered a sign of financial stability, while those with a net worth of $5 million or more are considered wealthy.

Others only consider an ultra high net worth of over a billion to be wealthy.

A high income is another factor that can contribute to wealth, but it’s important to consider how that income is being used and invested. You can be considered rich just by having a high income, but a high income will never be the reason to call someone wealthy.

Is $1,000,000 considered wealthy?

At one time, being a millionaire was considered wealthy.

Over time, being a millionaire meant you were rich. Now, some people consider a millionaire to only be financial stable.

The definition of wealthy can vary based on personal circumstances and the cost of living in a particular area. However, in general, having a net worth of $1 million or more is often used as a benchmark for financial stability, while those with a net worth of $5 million or more are first started to be considered wealthy.

It’s worth noting that these figures are just general guidelines and your own definition of “rich” may be different. The key is to focus on building and maintaining your wealth over time, regardless of where you fall on the wealth spectrum.

By setting financial goals, budgeting wisely, and making smart investment decisions, you can work towards achieving true wealth and financial security.

“Wealth is not about having a lot of money; it’s about having a lot of options.”

– CHRIS ROCK

Wealthy vs Rich

The difference between being wealthy vs rich lies in the source of wealth, financial mindset, and amount of wealth possessed.

Wealthy individuals tend to have a substantial net worth, built over time through careful financial planning and wise investment decisions. They also tend to have a long-term focus and strive to create passive income streams.

On the other hand, someone who is merely rich may have acquired their wealth through inheritance or a high-paying job and may have a more short-term focus.

Additionally, being wealthy allows for greater financial freedom, as it allows individuals to make choices without financial constraints.

What separates the rich vs wealthy? The rich acquire things to impress others. Conscious or not, their primary reason for buying expensive items is so that others will think they are rich.

The wealthy – they will happily drive their Honda Accord for ten years, and instead invest into assets that will appreciate rather than depreciate!!

Rich: You make a lot of money, a six-figure dollar figure, and can buy and do things others can’t.  They have thousands of dollars saved.

Wealthy: You have a variety of investments and assets that bring in money on their own.  Wealthy people can have millions of dollars in assets and savings.  The ultra-wealthy have billions of dollars!

A basketball player is rich. The owner who signs his payceck is wealthy

Wealthier people with a lot of money often put saving and investing ahead of buying things.  They will have millions of dollars in assets and investments.

So, how do you know if you’re rich or wealthy?

Rich: Someone who makes a lot of money or has a lot of things, but still may have a lack of complete control of their finances.

Rich people spend money on material items (think of your typical athlete) to prove to everyone that they are rich.  Some of the wealthiest people in the world such as Jeff Bezos, acquire assets.

Rich people can quickly become poor if they don’t know how to handle their money, they may even be living paycheck to paycheck.  But wealthy people have a solid base for long-term financial security.

When someone is wealthy, they have enough money to be financially stable and independent.  Wealthy people are more likely to have simple hobbies rather than eye-popping expensive hobbies.  They won’t have a rich-guy hobby such as owning huge yachts.  They are more likely to have insurance than loans.

Wealthy people will take risks, just not unnecessary risks.  Wealthy people focus on acquiring assets that will produce future income and build long term wealth.

People often use the words “rich” and “wealthy” interchangeably, but knowing the differences is essential.

Here are a few crucial signs:

Rich: People may think you are rich if you make a lot of money and can buy expensive things and go on trips. This can mean having a big, expensive huge house, driving a high-end car, and being able to go on expensive trips and do other expensive things.

Wealthier people: You might be considered wealthy if you have a wide range of investments and assets that bring in passive income. This means you have a foundation for long-term financial stability and independence, even if your income or material possessions change. Wealthy people usually put saving and investing ahead of buying things because they know how important it is to build wealth over time.

It’s important to remember that being rich and being wealthy are not opposites. It is possible to have both a high income and a portfolio of investments (with a proper asset allocation) and assets that bring in hundreds of thousands of dollars on their own.

But it’s essential to remember that having a high income means something other than you’re financially stable and independent. For long-term financial success, making investments and planning your money is essential.

Read My Recent Article About Ultra High Net Worth Asset Allocation

1. Things that make a person rich vs wealthy

Education: Getting a college degree or other higher levels of education can lead to better-paying jobs and more ways to make money. Financial literacy can also help people make better investment decisions and manage their bank accounts and bank balances.

Career: You can get rich if you choose a well-paying job or start a business that does well. This can include technology, finance, or healthcare jobs, which often pay well and have room for growth.

People can build wealth over time if they have a long-term financial plan and don’t spend money carelessly. Setting initial goals (common short-term goals & common long-term financial goals) making a budget, and putting saving and investing at the top of the list are all ways to do this.

It’s important to remember that no one way to get rich or wealthy works for everyone. Each person’s financial success will depend on their unique circumstances and chances. But people can improve their chances of becoming financially stable and independent by focusing on education, career development, and financial planning.

It’s important to remember that the rich can quickly become poor if they need to learn how to handle their money well. For example, if someone has a high income but spends a lot without saving or investing, they may need a solid foundation for long-term financial stability. They have a minimal amount in checking and savings, with little to no additional savings.

On the other hand, rich people have a variety of investments and assets that can provide a steady stream of income, even if their income or material possessions change.

In short, being rich may give you short-term happiness and the ability to buy and do nice things, but it also sets you up for long-term financial stability and independence. It’s essential to know the difference between the two and put investments and financial planning at the top of your list for building wealth.

Rich vs Wealthy Mindset

Overall, the main difference between a wealthy mindset and a rich mindset is that a wealthy mindset prioritizes long-term financial stability and security, while a rich mindset is more focused on short-term financial gain and accumulating material possessions. A poor mindset, on the other hand, is characterized by a lack of financial knowledge and skills, and a lack of focus on financial planning and stability.

Wealthy Mindset

A wealthy mindset is characterized by a focus on long-term financial stability and a desire to continuously improve one’s financial knowledge and skills. Wealthy individuals tend to be strategic with their money, investing it in ways that will generate long-term wealth and security. They are also more likely to prioritize saving and financial planning, and are often willing to take calculated financial risks in order to achieve their financial goals.

Rich Mindset

On the other hand, a rich mindset is focused more on short-term financial gain and accumulating material possessions. Individuals with a rich mindset may prioritize spending and consumption over saving and investing, and may be less concerned with financial planning and stability in the long term.

Poor Mindset

A poor mindset, on the other hand, is characterized by a lack of financial knowledge and skills, and a lack of focus on financial planning and stability. Individuals with a poor mindset may struggle to make ends meet and may be more susceptible to financial setbacks. They may also be more likely to engage in financial behaviors that are detrimental to their long-term financial well-being, such as overspending or failing to save for the future.

A Bulleted Summary of The Article

Being rich is not the same as being wealthy.

Knowing the difference between the two is essential because it can affect how someone plans and makes decisions about their money. Building wealth through investments and financial planning is much more important than just making more money for long-term financial success and stability than just their bank accounts.

Some things that can help a person get wealthy are getting an education, building a career, and planning their finances. It’s important to remember that there is no one way to become financially successful. Instead, each person’s path will depend on their unique situation and opportunities.

In short, there is a difference between being rich and being wealthy. Knowing the difference and working toward long-term financial independence and stability through investments and sound money management is essential.

• “Rich” refers to having a high income or possessions, while “wealthy” indicates financial stability and independence from investments or businesses.
• Knowing the difference between the two is essential since it can affect how you plan your finances and make decisions.
• Building actual wealth through investments and financial planning is more important than just making additional money in the short term if you want to be financially stable and independent in the long term.
• Education, career growth, and financial planning are all things that can help you become financially stable and independent.
• It is essential to work toward long-term financial independence and stability through investments and sound decisions based on their collective money wisdom..

Being rich is like having a grand piano in your living room, while being wealthy is like owning a concert hall with many grand pianos.

Rich vs Wealthy Quotes

• “Being rich is having money; being wealthy is having time.” – Margaret Bonnano
• “Rich people have small TVs and big libraries, and poor people have small libraries and big TVs.” – Zig Ziglar
• “The difference between being rich and wealthy is where the money is invested.” – Suze Orman
• “The wealthy invest in time, the poor invest in money.” – Jim Rohn
• “The difference between being rich and wealthy is the same as the difference between being in debt and being financially free.” – T. Harv Eker
• “Being rich means you have a lot of money. Being wealthy means you have a lot of options.” – Tony Robbins
• “Wealth is not about having a lot of money; it’s about having a lot of options.” – Chris Rock
• “Being wealthy is not about how much money you have, it’s about how much money you have left after you’ve paid your bills.” – Dave Ramsey
• “Being rich is having money, being wealthy is having time and freedom. The goal is to have both.” -Grant Cardone

FAQ

Sources About Wealth:

• https://www.privatebank.bankofamerica.com/articles/wealth-study-2022.html
• https://www.pewresearch.org/social-trends/2020/01/09/trends-in-income-and-wealth-inequality/
• https://www.imf.org/en/Blogs/Articles/2020/11/30/how-the-rich-get-richer
• https://www.census.gov/library/stories/2022/08/wealth-inequality-by-household-type.html
• https://economics.princeton.edu/working-papers/top-wealth-in-america-new-estimates-under-heterogenous-returns/
• https://wir2022.wid.world/chapter-4/
• https://www.credit-suisse.com/about-us/en/reports-research/global-wealth-report.html

• Sharing the article with your friends on social media – and like and follow us there as well.
• Sign up for the FREE personal finance newsletter, and never miss anything again.
• Take a look around the site for other articles that you may enjoy.

Note: The content provided in this article is for informational purposes only and should not be considered as financial or legal advice. Consult with a professional advisor or accountant for personalized guidance.