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Understanding the Difference between Rich and Wealthy

Riches and rich people have always fascinated human kind. The people who can buy whatever they want without worrying about affording it or not needing to cut out something from their shopping list because they cannot afford all they want.

Author: Moneychutney.com
Date: Feb 16, 2012 - 8:26:30 AM

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Riches and rich people have always fascinated human kind. The people who can buy whatever they want without worrying about affording it or not needing to cut out something from their shopping list because they cannot afford all they want. They can buy the best items and also have money to pay premiums to get hold of products that are in short supply. They are treated well and on a priority at stores; and special privileges are granted to them. Well it is good to be never in a situation where you think you cannot afford this thing or that item.

Rich peoples’ lifestyle is so appealing - everyone wants to be rich
The rich and famous can simply buy expensive things instantly. People associate the rich with expensive status symbols like a luxury car or exotic eat outs at star hotels and restaurants, vacations abroad, jewelry and art – things which we find difficult to imagine. They live in house located in elite neighborhoods.

It implies that these people have deep pockets to sustain their fancy lifestyles. We would also expect every person with lots of money not to care for money or to spend it well.

Some people get rich quickly
Riches can happen instantly and in the same manner they can also disappear instantly. Examples of the categories belonging to quickly got rich are: new celebrities, lottery winners, people who inherit wealth suddenly or a poor farmer in a village close to which suddenly a new industrial zone is setup.

Is being rich and wealthy the same thing?
Now the question arises, “What is wealthy?” Are ‘rich’ and ‘wealthy’ one and the same? Despite the way we think there are two kinds of people with money. People who have a lot of money, who spend away all their money earned in a year or worse, sell away their physical assets (land, buildings etc.) to keep up with their fashionable and impressive lifestyle.

And there are also people with lots of money but spend very carefully and less than they earn. They tend to hold on to wealth rather than spend the money on an impressive life style.

Wealthy is not the same as being rich
Thomas Stanley, a famous American author, describes wealth in his bestselling book “The Millionaire Next Door”. He says, “Wealth is not the same as income. If you make a good income each year and spend it all, you are not getting wealthier. You are just living high. Wealth is what you accumulate, not what you spend”. He also says, “It is seldom luck or inheritance or advanced degrees or even intelligence that enables people to amass fortunes”.

“A man is rich in proportion to the number of things he can afford to let alone” says Henry David Thoreau, a famous American philosopher.

Stanley says the more wealth a person has, the more likely that person will say, “My success is a direct result of loving my career or business.” He says “Wealth is more often the result of a lifestyle of hard work, perseverance, planning, and, most of all, self-discipline.”

Difference between the rich and the wealthy
Thus the main difference between the rich and the wealthy is that the rich is living high by spending all that money they have, whereas the wealthy is living below their means with help of financial intelligence. Financial intelligence enables people to make right decisions and lifestyle choices. It plays a crucial role in building and maintaining wealth.

In fact, most of the wealthy people with big bucks live well under their means. Take for example ‘Warren Buffett’, a superrich American investor, still lives in a modest home, brought in 1958, in an upper-middle class neighborhood. Not some palatial building with impressive decorations. He put his money instead toward those investments that help them stockpile more wealth. Like many of today’s millionaires seem passionately determined to appear middle class. Thus being rich does not accumulate wealth, it is a fancy lifestyle that gets easily noticed by a lot of people.

In general, most people who wanted to be rich had a difficulty maintaining it. While most wealthy people have been able to maintain that wealthy status.

Money Chutney provides insightful articles on saving, investing, budgeting and financial planning. These articles are intended to provide knowledge and make people aware of methods and techniques on personal finance, so they can use it to better their financial situation. These personal finance strategies are targeted towards educated middle class people in India, who typically look for information on how to save money.

View all articles by Moneychutney.com

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