Difference between being Rich and Wealthy
Well, most of people think that being Rich and Wealthy is same thing. But it has very large difference. These two things seens like synonymas, but these are completly different from each other. And it is very important for us to know the difference between being Rich and Wealthy.
According to the writter of number one financial book “Rich dad Poor dad” – Robert kiyosaki, “The Rich ahve lots of money but Wealthy don’t woory about Money.”
What does it mean to be Rich?
In simple words, being rich mean having lots of cash income from your job. In fact being Rich can often mean speanding lots of money on fancy cloths, car collections, Houses, Private school tutions and by doing so you will look rich in the eye of society. For example- you are making $500000 a year and your yearly expediture is $550000 per year. Which mean you are speading your all earning on your Luxury habits and looking rich but in real life you are going in debt per year. Moreover, if you loose your job or your yearly income stop coming in your pocket, you will get broke in seconds and not able to survive in this era.
For example- MC Hammer, am American rapper, Sonf writter, Dancer, and Record producer was earning $30 miilion dollar per year but he end up in $13 million debt and declared bankrupcy in 1996. Because, of his expenses- $1 million house with 200 staff memeber to manage, and a horse stable with 19 race horses and many other expenses.
And this is not only one example because there are lots of people in our world who not able to manage their money and by making wrong decision they not able to hold their rich status for long term.
There is one very important line in “Rich Dad Poor Dad” that “Money Without Financial Intelligence is money Soon Gone”
What does it mean to be Wealthy?
In simple words being wealthy mean having a enough net worth that gives you the time to do the things you want to do. Or having a stable cashflow to meet your needs and able to afford not to work if you don’t have to. To be more specific, being wealthy mean how much time you can survive if you lose or resign form your job toda. For example- You Monthly expense is $3000 per month and you have $30000 in saving , then you have 10 months worth of wealth. If you are making $3000 per month from your investments revenue, you are wealthy and you can survive without having job.
Wealthy people does not mena having latest gadget, fancy cars, houses but they do have lots of assets, such as real easte, stocks. And their investments help them to do what they want to do in their life.
And According to Robert kiyosaki, The rule number one of being wealthy is your must know the difference between assets and liability.
” An Asset is omething that puts money in your pocket. But a Liability takes money out of your Pocket”
What is the difference between being Rich and Wealthy?
There is a very large difference between being Rich and Wealthy. And it also possible that someone who is amking less then rich to actually be wealthy. Because, rich people own debt to stay rich and spead more then they actually make on Liabilites. Like owning Fancy cars, Laest Fashion design. But Wealthy people save and invest their money in Assets such as stocks. So they can servive on their return on Investments and make money while sleeping.
In general we should focus on building wealth than that of looking rich. Because, speading more than you make is not a smart financial move. And you will not able to run long in the race of life. However, being wealthy doeas not mean drive second hand car for life. But it mean make enough wealth so you can afford anything if you lose your regular income.
At last if you want to be wealthy and really want to increase your knowledge about personal finace. The “Rich Dad Poor Dad” is one and the best book in finacial Category. Because, it inculde a lots of knowedge about the duilding wealth and buying Assets than that of Liabilities.
Disclaimer- Th einformation avilable above is based on Reasearch and Knowledge. It is your own choice to make dicison about your Finaces.
