Being Rich versus Being Wealthy

by Ryan

What’s the difference between being rich versus being wealthy? Is there a difference and if so how can we separate the two similar concepts?

Being Rich
Rich is a current state of being that can happen overnight. For example: lottery winners, new found celebrities and even high payed professions such as doctors or lawyers belong in the category of rich. They have quite a bit of money, but only have that money because of one source. Becoming rich can happen in an instant, but at the same time it can dissappear in an instant.

Being Wealthy
Wealth is being rich, but being rich through ownership of assets. Wealthy people don’t rely on their job, one particular asset, or even their natural talents. Wealthy people own assets and if you took away their job (if they have one) they wouldn’t be poor. If you took away the income stream from a rich person, they would quickly become poor. There’s a huge difference here.

In the most basic of terms rich people are not financially free while wealthy people are.

Ironically enough you’ll find many “get rich quick schemes” but there aren’t many “get wealthy quick schemes.” That’s because quick wealth is an oxymoron. Like a well built house, wealth is established one brick at a time. The house of wealth cannot be built overnight.

To illustrate this point I found a humorous and dead on clip from Chris Rock discussing why some people are rich and some people are wealthy. This video is full of racial humor and profanity so I warn you ahead of time that you may not enjoy some of Chris’ vocabulary usage.

Watch the Chris Rock Rich vs Wealth video here

What do you think the difference is? Did Chris Rock get it right?

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{ 13 comments… read them below or add one }

thriftygal January 19, 2010 at 5:44 am

While there is a methodical process to getting rich, getting wealthy is an entirely different ball game. Anyone can get ‘rich’ by following a set of established procedures like going to college, choosing the right major, working your rear off, studying hard, staying competitive, etc, etc, you need much more than that to be wealthy. I think the characteristics of a wealthy person are inherent. It is very hard to cultivate skills like not being risk-averse if you aren’t born with it, or don’t have any rolemodels. And you’re spot on about having multiple income streams.

russ smith January 19, 2010 at 5:46 am

Hey, nice video! really funny. and great way to emphasize the difference between rich and wealth. Good stuff.

FinEngr January 19, 2010 at 8:30 am

Funny you mention lottery winners. I saw some show that was a “where are they now”, and the guy won 2 lotteries but was going bankruptcy at the time.

Don’t forget that being wealthy is by YOUR standards, there’s no magic number. This ties into the idea of “financial security” which I focus on and you point out here (“if you took away their job…”). Financial security enables you to effortlessly navigate the financial ups/downs of life whatever they are.

This also ties into an article I’ve been drafting – our great expectations. With the rich, the more money you make the more money you spend. With the wealthy, the more money you make, the more money you retain.

Ryan January 19, 2010 at 11:17 am

@ Thriftygal – I think you’re right about role models. I’m writing this article because I had business owning parents as role models, but for those who were raised by dual income working parents who believe in that system it’s gotta be hard becuase you’re not only convincing yourself, you also have to convince your family. Tough.

@ Russ – Thanks for the comment and stopping by!

@ FinEngr – Don’t even get me started on lottery winners! I’ll be writing about them in the future as well. If I were to start a career as a scam artist I think I’d pursue lottery winners since they’re so bad with their money. I highlighted an article a few weeks back (http://www.plantingdollars.com/uncategorized/how-to-lose-a-million-dollars-or-three/) that showed how a girl blew $3 million on cocaine, fashion, and her boyfriend – crazy!

Rich comes with an air of keeping up, (the Joneses are rich) whereas wealth is not flashy and often people don’t know you’re wealthy – this was perfectly illustrated in the “Millionaire Next Door.”

Investing Newbie January 20, 2010 at 8:01 am

That’s one of my favorite Chris Rock quotes ever, so interesting that you would put that there. I agree with you both. I always differentiated the two as a function of time – Rich is quick (to gain and to lose), wealth is equally slow (to gain and to lose). I want to be wealthy…

LeanLifeCoach January 20, 2010 at 5:39 pm

Great video!

Ryan your missing the opportunity, you don’t want to be a scam artist that targets the winners, you want to be the one that runs the lottery!

Ryan January 21, 2010 at 9:49 am

@ Coach – Good call, I remember hearing the Illinois lottery was for sale a few years back… maybe I’ll start saving my pennies for that.

Tracy January 21, 2010 at 3:03 pm

Great video. Wealth is certainly the objective, be it spiritual or material or best of all: both. Money for it’s own sake has never meant much to me, which is probably why I had trouble retaining it for so long. But wealth, as Chris Rock puts it is freedom. The freedom to do some good and live well.

Financial Samurai February 2, 2010 at 6:52 pm

Do you think people who are not rich tend to poop on the rich, and say being rich is not meaningful?

I think I’ll be writing on this topic in an upcoming post.
.-= Financial Samurai´s last blog ..Do “C” Students Deserve “A” Lifestyles? =-.

Ryan February 2, 2010 at 7:57 pm

I think being financially rich is highly valued in our society, even though most people couldn’t define it. People just see that other people have more, so they end up wanting it too. From that standpoint I think a lot of folks are jealous, probably the majority, and react by saying it’s not meaningful.

However, I think there are a good number of people who aren’t rich financially, but lead much richer lives than most and actually mean it when they say that being rich financially isn’t meaningful in their lives. These people would be the minority though.

It’ll be interesting to hear your take in the post.
.-= Ryan´s last blog ..The Part Time Job Search =-.

Monevator February 14, 2010 at 4:22 am

I know some people who are borderline insolvent who are living rich lives in some definitions. And I’ve met a few very wealthy people who I wouldn’t trade places with for all the riches in China (which is actually worth something nowadays!) Mostly though the very wealthy I’ve met (i.e above £10m/$15m) I liked, though nearly all have been entrepreneurs who remember their roots.
.-= Monevator´s last blog ..Weekend reading: Real estate realities =-.

Darren June 8, 2010 at 11:15 am

I think being rich is just a state of having money. Like you said, it can happen through a lottery or an inheritance. But it can also be lost just as quickly.

Wealth, on the other hand, is knowing how to acquire money, and knowing how and where to invest it to make it work for you. It stays with you wherever you go.

People can take away your riches, but they can’t take away your wealth.
.-= Darren´s last blog ..Business Advice – What We Can Learn From Amish Success =-.

Trey December 31, 2011 at 7:04 pm

Ryan, I know this was posted near two years ago, but I found your article informative. You’re definitely right about more than one source of income to help. I think any sort of savings account, even if it is one that you can’t get until you’re 60 is good. At least it is money that you can’t spend and it will accrue interest, so when you are getting it, you will have more than when you started, plus IRAs and CDs and regular savings accounts are extremely beneficial. Also, a good job couldn’t hurt either. ;)

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