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?
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.
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… Read more »
@ 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… Read more »
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…
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!
@ 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.
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.
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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.
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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… Read more »
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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.
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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.
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