Black Immigrant Daily News
Having the house, the money, the cars, designer clothes and all the perks that come with it are associated with the life” most people dream of.
Having the money to do what you want, when you want and how you want is ideally the way you want to live.
Typically the aim for many persons who are striving to increase their financial ability is to be rich.
Because being rich is often associated with “material things” but I’m sure you know by now that the aim is not just about riches but rather, wealth.
Sure, the concepts of rich and wealthy both involve the accumulation of a lot of money. However, there’s a clear distinction between the two that may just shift your perspective from wanting to be rich to be wealthy.
So what is the difference between the rich and the wealthy?
Someone rich can spend a lot of money but often gather a lot of debt to finance the rich lifestyle. This simply means that the rich will have to keep working to replace the money spent, essentially trading time for money. For instance, rich people like actors, athletes and highly paid professionals have to show up for work and actively earn an income to keep their riches.
Being rich doesn’t equate to being wealthy. It doesn’t matter how much money they have, if their expenses are higher than their income they will eventually find themselves bankrupt or broke.
For example, a rich person can be making $200,000 per month but their monthly expenses are $250,000, they might seem rich, but the truth is that they are going broke.
Rich people spend their money on fancy and expensive things like a car or clothing, neglecting the consequences that may lie ahead.
The reality is that many people have gone broke because of their “rich lifestyles.” Many people are “stunting for the ‘gram,” and in real life, are struggling to make ends meet.
This is why more money can lead to more problems.
To be clear, I don’t subscribe to the more money more problems mindset.
I view this as a negative money mindset to have, especially if it is used as an excuse for not positioning yourself to earn more.
If you have to keep turning the wheels to maintain your riches because you have to keep up with the Joneses then that’s where your increased income is going to cause you some problems.
The more the rich earn, the more they will want to spend, the FOMO (fear of missing out) then leads to purchasing the newest and most expensive items and they begin to care too much about what others think. If there is no strategy to invest to achieve wealth, the rich run the risk of losing their riches. Someone wealthy on the other hand can spend within their means and still have a surplus.
Wealthy people have a significant net worth generated from investments, real estate, cash and overall assets that make their money work for them rather than them having to work for money.
Wealthy people can choose whether they want to work, as wealthy persons have achieved financial freedom.
Unlike a rich person who would want to obtain the latest gadget, a wealthy person is all about obtaining assets. For example, your monthly expenses are US$3,000 and you have $18,000 in savings, if you invest that $18,000 and end up with $3,000 in investment revenue, then you are wealthy.
Let’s not forget some of the most wealthy people in America are business owners, for example, Jeff Bezos, the founder of Amazon, who is worth $145 billion. It’s all about making your money work for you by acquiring assets.
The bottom line is there is more to riches and wealth than just how much money you have in your bank account. Rich people spend a lot of money on unnecessary things, but wealthy people save and invest most of their money. A wealthy person might have all the money in the world but don’t go around spending it all at once. Instead, they save as much money as possible and invest it in assets.
In the end, a wealthy person understands that for their wealth to grow, they need to turn their cash into assets so that it can keep on working for them.
So now you need to ask yourself, do you want to have a lot of money and say that you’re rich or want to be wealthy?
Now is the time to change your mindset. Don’t just desire riches, but aim to be wealthy with substantial assets.
Remember, wealth involves securing a lasting financial legacy for tomorrow. Aim to be wealthy.
Keisha Bailey is an experienced investment strategist who teaches people how to earn passive income, create wealth, reclaim time and reach financial freedom by investing.
She works with investors to create highly profitable portfolios so that they can build wealth faster. If you are looking to learn how to level up your money, she can be reached at [email protected]