Rich Vs. Wealthy 2023: Spending Money Vs. Managing Money

Most people assume that being rich and wealthy is the same. After all, they both seem to involve having a lot of money, right?

While these two terms may seem synonymous, there’s a significant difference between them.

In reality, being rich is more about having a high income, while wealth is all about having the assets and investments that generate passive income.

Once you know the difference between rich vs wealthy, you can level up your finances and achieve true financial freedom.

Our post on Rich Vs. Wealthy will look at the differences between what it means to be rich and wealthy.

We’ll also give you some tips to help you start on your journey to discover the power of being wealthy!

Key Takeaways

The key difference between being rich and wealthy is generating passive income, managing debts effectively, and investing strategically to build long-term wealth.
While having money can certainly provide a comfortable life, a positive money mindset and smart strategies of the wealthy allow people to unlock long-term freedom to live how they want.
Most people focus on immediate gratification and short-term gains, but the truly wealthy prioritize long-term investments and sustainable financial practices.
By adopting a healthy money mindset and building lasting wealth, anyone can achieve financial success and become truly wealthy!

Rich Vs. Wealthy

Planning for your future requires a clear understanding of the differences between being rich and wealthy.

Let’s look at what each means and how they’re different:

Being Rich

Being rich means having a lot of money and a high income, but it doesn’t always mean having long-lasting wealth.

The main difference between being a rich person and a wealthy person is how rich people manage their finances.

A rich person often finds themself in a never-ending cycle of earning and spending, putting their finances at risk and preventing them from achieving true wealth.

Rich people don’t manage their spending habits- they’re more likely to have material items like fancy cars and name-brand clothes.

These show they have money, which may make them rich in others’ eyes, but it doesn’t guarantee financial stability over a lifetime.

This means that rich people can often carry a lot of debt, even if that doesn’t show!

Being Wealthy

Unlike a rich person, wealthy individuals, financial freedom is a top priority. A wealthy person enjoys a more sustainable lifestyle by generating passive income.

It allows wealthy people to focus on enjoying life and pursuing their passions without the constant pressure to earn more.

Building wealth is a marathon, not a sprint, and the key is to focus on building a high net worth through savings, investments, and smart financial planning.

Being wealthy means having a solid financial foundation built on strategic investments, smart financial planning, and asset accumulation.

This way, they have money coming in at all times and can even afford to stop working full-time!

It’s important for a wealthy individual to know their net worth, too. Net worth is assets minus liabilities, giving you a clear picture of your overall financial health.

What’s The Key Difference?

One of the main differences between being rich vs. wealthy is that rich people have a high income or large sums of money but also spend a lot, meaning their debts are high.

Wealthy people have enough money to meet their needs, save money, and invest it in assets like real estate and the stock market to create a high net worth.

How To Become Wealthy

Building lasting wealth is a goal that many aspire to achieve, and by following in the footsteps of wealthy individuals like Warren Buffett, it’s possible to make that dream a reality.

Here are some tips the wealthiest people already know and you should know from here on out:

Create Real Expectations

Creating realistic expectations is essential when it comes to becoming rich vs. wealthy.

Setting expectations that align with your values and goals is crucial to growing wealth and making a sustainable income.

To become wealthy, focus on having enough money to meet your needs while avoiding unnecessary expenses.

Mix being frugal with an entrepreneurial spirit, and you can earn more and keep your wealth for longer.

By managing your spending and avoiding unnecessary expenses, you can put more into things that truly matter to you, such as your education, starting a business, or buying a home.

Then your net worth goes up without your debts spiraling out of control.

Budget Your Money

Creating a budget is fundamental to becoming wealthy and raising your net worth.

It helps you to track your expenses and income, identify areas where you can save money, and make better financial decisions.

Start by tracking your income and expenses for a month, and then use the information from your bank account and create cards to create a budget that works for you.

If you want things to be easier and more automatic, use a budgeting app like Empower that tracks your income and expenses all in one place.

This makes sure that your earnings are higher than your spending.

Pay Off Debts

Remember that becoming a wealthy person is not just about having a high salary like a rich person; it’s also about developing healthy financial habits.

Rather than following the spending habits of rich people, focus on reducing your debts, living within your means, and making smart financial decisions as wealthy people do.

Start by identifying your outstanding debts, prioritizing them based on their interest rates, and allocating a set amount of money each month towards paying your high-interest debt off.

A debt planner like The Savvy Mama’s Debt Planner can help you keep track of everything!

Stop Overspending Or Splurging

Avoiding impulse buying is a key step in curbing excessive spending or splurging.

Rich people spend on material objects without thinking it through. Impulse purchases can quickly add up and significantly impact your finances.

One strategy to avoid impulse buying on your journey to become wealthy is to wait a few days before purchasing.

This gives you time to reflect on whether the item is something you truly need or if it’s just a passing desire.

Get A Healthy Money Mindset

A healthy money mindset involves understanding the value of investing in assets that generate long-term income rather than just focusing on immediate gratification.

To cultivate a healthy money mindset like wealthy people, take the time to educate yourself about personal finance, investing, and strategies for your long-term goal.

Also, surround yourself with like-minded wealthy individuals who share your focus on building wealth.

If your friends always eat out and only shop when they hang out with you, it might be time to set strong boundaries or skip out.

Make More Money!

While a high-paying job is an excellent place to start, exploring other income-generating opportunities and ways to invest to start wealth-building is essential.

It may include buying stocks, real estate, or your own business. Additionally, you can consider taking on freelance work, starting a side hustle, or monetizing a hobby to become wealthy.

By taking smart risks, you’ll be well on your way to achieving your financial goals and living the life you’ve always dreamed of.

How To Grow Your Money

Side Hustles On Steady

Not only do the best side hustles help you make enough money to cover your expenses, but they can also serve as a stepping stone toward achieving your long-term financial goals.

The extra income you earn can be directed towards investing, paying off debts, or saving for the future.

The Steady app connects users with freelance work, side gigs, and part-time job opportunities tailored to their skills and interests.

You put in what you’re interested in, your work history, and what you want to earn, and Steady will recommend jobs you can apply to.

Find out more about their job offerings and income boosters with our Steady App Review.

Invest In Real Estate

Investing in real estate should be high on your list if you’re eager to make your money work for you in building long-term wealth.

You can generate consistent income through rental properties, ultimately boosting your overall assets and helping you join the ranks of the truly wealthy.

Start investing with as little as $10 on Fundrise.

This innovative platform allows you to invest in diverse real estate projects with relatively low initial investment, making it accessible for investors at various financial levels. 

Find out more about investing in real estate with our honest Fundrise Review.

Stock Investments

Venturing into the stock market can be an exciting and rewarding way to secure your financial future and generate an income on your journey to becoming wealthy. 

By creating a well-thought-out investment plan and allocating your money strategically, you can achieve both short and long-term gains that will help you transition from being merely rich to truly wealthy. 

One user-friendly platform for stock investing is Robinhood, which enables you to invest in stocks easily and conveniently.

It’s simple for beginners and experienced investors to manage their stock portfolios. Learn more about it with our in-depth Robinhood Review!

Our Thoughts

Understanding the differences between rich and wealthy is key to growing your money and achieving long-term financial success.

While rich and wealthy people may both live comfortably and have high incomes, the main difference lies in their long-term financial strategy to keep money in the bank!

By adopting the habits and strategies of the truly wealthy, anyone can transform their financial future and achieve lasting financial freedom.

So, don’t settle for simply being rich – aim for true wealth by building sustainable financial habits.

Focus on long-term investments with Fundrise and Robinhood to generate passive income and help you achieve your financial goals!