Many people think that being Rich and being Wealthy are the same thing. But there is a difference between the two: The rich have lots of money but the wealthy don’t worry about money. - Robert Kiyosaki (Author of 'Rich Dad Poor Dad').
The 'Rich' might have lots of money, but they also might have lots of expenses that keep them up at night. Or they might have a high paying job but have to get up to work everyday and have fear of getting fired or laid off.
The 'Wealthy' on the other hand, don't have these worries, Why? What's the difference?
The definition of wealth is the number of days you can survive without physically working (or anyone in your household physically working) and still maintain your standard of living.
For example, if your monthly expenses are $5,000 and you have $20,000 in savings, your wealth is approximately four months or 120 days. After that you are broke.
Wealth is measured in time, not in dollars.
In short, the difference between 'Being Rich' and 'Being Wealthy', is 'The Wealthy' have a source of income apart from their 'Day Job', or 'Business', that is greater than their 'Monthly expenses'.
Ultimately, it’s not how much money you make that matters but how much money you keep—and how long that money works for you. - Robert Kiyosaki (Author of 'Rich Dad Poor Dad')
As an Independent Financial Advisor, I meet many people who make a lot of money, but (for many of them), all their money goes out of their expense column. Every time they make a little more money, they go shopping. They often buy a bigger house or a new car, which results in long-term debt and more hard work. Nothing is left to go into the asset column. It’s this kind of behavior that separates the rich from the wealthy.
There is nothing wrong in liking the finer things in life.
The difference is the 'Wealthy' don’t have to work to purchase them, or go into deep debt. Rather, they spent the time necessary to be smart with their money, work hard, and build investments that provide enough cash flow each month to cover their expenses—including fun liabilities like cars and houses.
They don’t work for their money. Money works for them.
Lots of people can become rich. But only financially intelligent people can become wealthy—and that takes a strong financial education that allows you to build cash-flowing investments and assets.
Read the next article in this series -
Amit is an Independent Financial Advisor, based in Dubai since 1997. He is part of the prestigious ‘Million Dollar Round Table’ (MDRT), which is an elite club of the best financial advisors worldwide. He has authored the ‘6-Step Financial Success Guide’, and the book ‘Creating, Preserving, Distributing Wealth’. He helps business owners and professionals ‘Create A Second Income’ through investments.