Rich vs Wealthy

I recently saw an interview with Grant Cardone on YouTube, where he said “Rich is just another version of waiting for the end to come. The wealthy? There is no end for the wealthy.” These words are generally used interchangeably, but there is a major distinction, as Mr Cardone said.

The most important distinction between the rich and the wealthy is how long you can last with the things/wealth you have. The rich typically have a relatively small amount saved up and them stopping working would mean there is no inflow of money anymore, which in turn threatens their existing lifestyle.

On the other hand, truly wealthy people are at a point where they don’t have to worry about how money is going to come in because they have set up enough avenues for money to come to them by buying up assets.

There is no shortcut, you need a high income to buy anything, or have money left over after spending on necessities, and that can be achieved by running a successful business or being employed with a job that pays well. You need to constantly upskill yourself to be able to earn as much as you can. But attaining wealth comes with the condition that you don’t get to spend lavishly in the early years on wants and spend mostly on needs while buying up good assets.

Most people you see online who are flaunting their money with watches, chains and cars might not be actually wealthy and would regret it later. Not because they don’t have enough money right now, but because there is no end to spending. If your habit is to spend money as soon as it hits your account, you can never stop that. You can spend even millions of dollars in a few months if you don’t pay attention.

So which assets do you want to achieve financial freedom, and become “wealthy”? Well, you should have a diversified portfolio including stocks, real estate, fixed-income securities and more. But assets that generate passive income are important: dividends, rental income, etc. because these put actual cash every month or so in your pocket. Non-cash generating assets, for example, non-dividend stocks, means you have to pay attention to when you want to sell, not entirely a tension-free process if you’ve ever been through it. Oh and by the way, here’s that interview I mentioned.

And as I said in a paragraph above, you should stay away from “lifestyle inflation”, that is, spending more as your income increases. Well, I hope you’re on your way to wealth as soon as possible. And you can keep reading articles like this from here. And do let me know if you want a specific topic covered. Subscribe for free to receive more posts like this every day!