Are You Wealthy Or Rich?

Let’s all be honest, everyone would like to be wealthy AND rich. Both sound like you’ve made it in life.

But there's a nuance here that’s worth exploring.

Being rich: splash with cash

Let’s start off talking about being rich: people who splash cash around like there’s no tomorrow. We’ve all seen the high-flying lifestyles: the flashy cars, the Gucci sunglasses, the designer threads.

Although you may think that by showing off your bling you’re shouting “I’ve made it!” with a megaphone, spending big doesn’t necessarily mean you’re wealthy or a high earner, as these goods can always be bought on credit.

Expensive toys and things will quickly drain any income you have leaving you with very little to show for it at the end of the month. Worse is buying on credit, which can leave a massive hole in your wallet.

The bottom line is that being rich doesn't always equate to wealth.

If your money management game isn’t strong, those toys will quickly disappear. You only have to look at what’s being sold on Yaga or Luxity to know that this happens far more often than you think.

Building lasting wealth

‍So, what does it mean to be wealthy? People often refer to generational wealth: wealth that you hand down to your kids. It’s tangible, it’s lasting and it takes time to build.

Building wealth is no quick thrill; it’s a long slow burn that takes patience and self control. It's not about instant pleasure, but delayed gratification.

Wealth is all about your assets and not your accessories. Wealth is the sum of all your investments: equity, cash, real estate, maybe even some crypto.

And unlike the rollercoaster ride of being rich, wealth brings a sense of security. It's not just about what you have now, it's about what you'll have in the future.

The bottom line is that your wealth is growing and working for you while you sip your coffee.

Why should you focus on building wealth?

Wealth brings freedom to make choices based on what you want and not what you have to do or can afford right now. You’re not chained to a paycheque; wealthy people own their own time.

Wealth is far more than just having a big number in your bank account. In fact it’s the opposite, because your cash is losing value to inflation.

Wealth is about managing your money wisely and investing as much as you can as often as you can. It doesn’t mean you can't enjoy your money and live like a hermit. It’s all about striking a balance.

The bottom line

Being flashy with your money isn’t smart; building last wealth is.

Wealth is about the money you have and not the money you spend (being rich).

So the best measurement of wealth is your net worth: the total value of all your assets, minus all your outstanding debts.

And the only way to create wealth is to earn money, spend wisely and invest. Good luck!