Rich Vs. Wealthy: The Difference Between Rich and Wealthy
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Rich Vs. Wealthy: The Difference Between Rich and Wealthy

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Have you ever wondered what’s the difference between rich and wealthy?

Both terms may seem synonymous with each other. But there’s actually a BIG difference between the two. And not many people realize it.

So why is it important to make this distinction?

It boils down to personal finance.

Most people want to get rich, but not all of them focus on building wealth.

And when they get rich by some stroke of good luck, they may not be able to sustain it, only losing it in a short amount of time.

There are people who only know how to spend money, and, on the other hand, there are people who know how to make money.

There lies the distinction.

So which one are you?

Rich vs Wealthy

Let’s be real. We all want to become rich. And there’s nothing wrong about that.

But wanting to be rich is different from making the necessary effort to build your wealth in order to become rich.

There are many ways to become rich. You may inherit a fortune or win millions from the lottery. Or you may go into professional sports or become an entertainer and get a multi-million dollar contract.

Now compare that to building wealth; how do you do that?

Building wealth essentially requires investment in time, effort, and resources.

Professionals build their wealth through studying and pursuing their profession. Entrepreneurs put in the work to grow their business.

Understanding the Difference between Rich and Wealthy

Over the years, I thought about the subtle differences between rich and wealthy.

Typically, when you think about rich, it evokes images of fancy homes, luxury cars, and expensive jewelry.

But you may still be considered a wealthy person even without the glitz and glamour.

On the other hand, you may be flourishing financially but may not be considered wealthy.

What does wealthy mean?

For me, the concept of “wealth” boils down to sustainability.

A wealthy person will always remain wealthy. He may struggle financially for a few years as he builds his wealth. But after all the hard work, dedication, and perseverance, he becomes successful.

When I look into the concept of wealth, there are a couple of families that come to mind. Note that I said “families” and not “individuals.”

The Rockefellers, the Campbells, the Carnegies; these are wealthy families that built their fortune and made it last for generations.

They were able to sustain their fortune.

What does rich mean?

To illustrate the concept of “rich,” let’s use an extravagant lottery winner as an example.

He has won millions of dollars, spends it like crazy, and now it’s all gone.

That lottery winner may have the money, but it was only for a short time. He wasn’t able to preserve it for the next generation to enjoy that fortune.

So what makes the Rockefellars, Campbells, and Carnegies different from the lottery winner?

These families possess the gift of knowledge; the deeper understanding of sustaining their wealth and preserving for the generations and years to come.

On the other hand, people like the extravagant lottery winner we used as an example only know how to spend money, not make money.

Unfortunately, not all people possess the knowledge to sustain their wealth.

Wealthy vs Rich

To be wealthy is to be wise; to be practical in all things that are money-related, which includes being conscious about proper financial planning.

Take a look at the billionaires of this generation. Bill Gates and Mark Zuckerberg.

They keep it simple, wearing the same clothes and getting into cars that regular people use.

As they get richer and richer, they didn’t excessively change their spending habits.

They could lead a lavish lifestyle if they want to; after all, they can afford to be extravagant.

But no. These two billionaires understand the value of making money, spending only on what’s practical.

They are wealthy individuals, not just rich.

On the other hand, being rich doesn’t necessarily equate to being wealthy.

Being rich alone without the wisdom and knowledge will not make one a wealthy person. The money may not last as long.

What’s the difference between rich and wealthy?

Robert Kiyosaki said it best when he differentiated rich from wealthy.

According to the “Rich Dad Poor Dad” author, wealth is measured in time.

While the idea of being rich centers on having lots of money, the wealthy folks don’t worry about it at all.

Sure, they may have lots of money, but the rich also have to worry about expenses, which keeps them up all night.

Or let’s say the rich people have high-paying jobs. But there’s also the anxiety, arising from the thought that they might get fired or laid off from work.

The rich have these worries to deal with. But the wealthy don’t.


To be truly wealthy (and not just rich), you need to have some sort of financial independence. There must be freedom from the thought of money troubles.

According to Mr. Kiyosaki, the state of being wealthy is determined by the number of days where you can survive and not worry about money that’s coming in.

It pertains to the days where you don’t have to work yet still maintain your standard of living.

To be wealthy is not about what you can buy. It’s about being able to sustain your lifestyle and your existence without the need to work.

Measure wealth by time.

Let’s illustrate the concept of wealth in relation to financial independence.

If you racked $30,000 in your savings account and your usual monthly expenses total $5,000, then your wealth can sustain you for six months even if you’re not working.

On the other hand, if you have investments that provide you income at $5,000 a month and your monthly expenses are still at $5,000, it may seem like breakeven. But it’s not. What you have is infinite wealth.

Because you have cash coming in every month that’s enough to cover your expenses, you no longer have to worry where to get your money.

It’s not how much you make.

To be wealthy, it’s not about how much money you make. It’s how much you can keep and how long your money will work for you.

Achieving wealth is possible through saving and investing.

You may not have the finer things in life, but you won’t have to worry about money.

When you come to a point where you don’t have to work to sustain your lifestyle, that’s real wealth.

What does it take to be wealthy?

Does being wealthy mean having a lot of assets?

Not necessarily.

I believe being wealthy is a mindset.

A wealthy person follows these sound money principles.

  • Lives within his means
  • Puts at least 10 to 15 percent of his paycheck into his savings account.
  • Strives to reduce his debts
  • Makes smart investments
  • Prepares for his retirement

Assets are not an important distinction for a wealthy person.

Rather, a wealthy person is more concerned about his net worth.

The key to achieving wealth isn’t that complicated. However, it’s not easy. It will take a lot of effort and perseverance.

There will be a lot of ups and downs on the path toward wealth.

If you want to pursue wealth, expect a lot of disappointments and frustrations. You will have many questions and even more doubts.

Being rich simply means having money.

Here’s another notable difference between rich and wealthy.

To be wealthy, you need to have the right mindset when it comes to handling money.

But to be rich, you only need to have money.

Yes, having a lot of money will not make you wealthy.

While the rich spend it, the wealthy use that money to invest in worthwhile endeavors; the reason: to make more money.

The rich buy expensive things while the wealthy think of another opportunity to grow and multiply that money.

For the truly wealthy person, it doesn’t matter if he earns $1,000 or $100,000 a month.

He’ll spend a quarter of that for his needs, put the other quarter in his savings account, and use the remaining half for his investments.

For the rich person, he’ll probably squander it on stuff that he usually doesn’t need in his everyday life.

Don’t judge a book by its cover.

When you see someone rolling in a brand-new BMW, you’ll probably think this person has a fat bank account.

Well, not all BMW owners have a big balance at the bank.

In the same way, not all VIP bank customers drive a BMW.

A rich person flaunts while the wealthy one understands the importance of not letting his wealth go to waste.

Take Warren Buffet for example.

The billionaire and finance guru drives the same Cadillac he had for years. In fact, he even lives at the same house he bought in the 1950s; it was the house that he bought for over $30,000

He may not have the flashiest Lamborghini but he has a private jet that takes him anywhere he wants to go.

This is a man that truly understands the importance of spending money on things that offer the most value. And more importantly, he spends more on things that bring him happiness.

To seek wealth is to seek happiness.

A lot of people have this misconception about building wealth.

Because pursuing wealth entails a lot of sacrifices, they think it equates to missing out on all the fun.

There will be a lot of disappointment and frustrations along the way. Doubts will enter the mind. Negative thoughts will pervade through your very being and you may lose that steam toward your goal.

But if you look past that and persevere, if you keep up the hard work, then you’re all good.

As in everything in life, there will be ups and downs. So is the pursuit of wealth and happiness.

So how do you relate this with the concept of being rich?

When we speak of being rich, it generally centers around material things. Whether it’s money, fancy houses, flashy cars, lavish lifestyle.

But did you know material things don’t necessarily buy happiness?

Recent studies have shown once you hit $105,000 in yearly income money no longer improves your happiness?

Rather, experiences bring in more value and happiness in our lives and sustained happiness at that.

So you may have all the money in the world and buy all the cool stuff, but that doesn’t mean it fulfills something that’s lacking inside of you.

Wealth, on the other hand, is a mindset.

It centers on the thread of your being.

You may not have the latest gadgets or wads of cash at your disposal. But if you have a positive world view and philosophy of life, then you are a wealthy man.

Be wise with your money.

Spend your money on worthwhile experiences. Invest in things that make you happy; that stimulate positive emotions.

Focus on what brings joy into your life. These are the things that you will bring into old age.

You won’t remember that nice, expensive jacket 20 or 30 years from now.

However, you will reminisce on the fun occasions when you wore that jacket.

Take a trip. Join an art class. Attend a Broadway show. Learn how to dance.

Pay for the experience, not for an item that just came out.

Be responsible for your spending. Be wise in how to use your money.

Take a pass on things that make you look fancy and rich. You don’t need that.

Instead, focus on things that bring happiness; that contributes to your overall well-being. These are the things that build wealth inside you.

Ask yourself if you really need to buy that latest iPhone when your current one still works.

Experiences bring more value to your life. Concentrate on those instead of the material things.

Once you’ll understand experiences outweigh things, you’ll look forward to the former and yearn less for the latter.

It is then that you will see that you don’t need so many things to be wealthy.

Material things don’t necessarily equate with happiness.

I’ve met people who don’t prioritize things over experiences.

They take weekend trips, they spend family time at the nicest restaurants in the city, but they don’t live in big houses or drive fancy cars.

Yet they are some of the happiest and contented people I’ve had the pleasure of meeting.

It goes to show money can’t buy happiness.

Being rich doesn’t mean you’ll be happy.

However, having a wealthy mindset is a path toward good cheer and contentment.

Can you tell the difference between rich and wealthy?

desk with keyboard and text overlay that says difference between rich and wealthy

McKinzie Bean
McKinzie is a mom of two, and a personal finance enthusiast. She loves teaching other moms how to save money, make money, and take control of their financial situation. She has started five profitable businesses and in college, she double-majored in Financial Planning and Psychology. You may have seen her in publications like Forbes, The US Chamber of Commerce, Yahoo Finance,, The Penny Hoarder, & more.

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