What is wealth and how does it differ from being rich? Many want to be called wealthy but are nothing more than just rich and usually struggle finding the balance between having money and being wealthy. We’ve decided to truly break down for you the attributes to each that differentiate what constitutes rich and what is considered wealthy.
Making money is part of life and no matter how you look at it, learning to make more money is the way most people keep score. Even though we think that’s a highly inaccurate way to keep score, we understand that most people will look at it that way and, therefore, we’ll use this common factor to determine the difference between being rich and wealthy.
If being rich is defined as someone who has accumulated enough to purchase comfort of a luxurious nature above that of the common people in a group, city, society, or whatever else you want to call it, then technically someone who has acquired wealth has done so above the group of rich people and attained a new level of luxury.
We like to look at wealth through two different scopes and attributes to define it and differentiate it:
1. Enough Money that You’ll Never Run Out.
We define someone wealthy as someone who will no longer face the possibility of poverty from the aspect of money. Someone who has accumulated enough money to guarantee themselves a lifestyle regardless of the poor decisions they make around it. You could look at this as someone who no longer needs to make money and can assume the risks others don’t want to take and yet really still be taking no risk at all.
2. Having Created Residual Income Streams.
If everyone who is wealthy has been rich at some point, then there has to be a specific action that occurs that enables people to graduate being rich and instead go to wealthy from a money making standpoint. We like to think that it is someone’s ability to create residual income streams rather than work for money forever. If you think about it, someone truly has mastered the game of making money if they can do so without ever working. From web based business that sell a product or service that is automated and requires no human interaction to simply owning commercial real estate and leasing all the offices for long term contracts. All of which are ways to create more income all at the same time without working more for them and that ultimately is when you master having your money work for you.
By definition of money, there certainly is very little that separates those who are rich from those who are wealthy. However, from a standpoint of life, wealth can certainly be measured a much more profound way than just how much money someone has made. Achievement certainly is a much more valid way to keep score but unfortunately a whole different debate.