The Differences Between The Rich & The Wealthy

When thinking about the terms rich and wealthy, a lot of people tend to believe they are both the exact same things. But, in fact, they are very different. We tend to relate the terms rich and wealthy to those who have plenty of money, however, it does not actually work like that. Despite being thrown around in the same context and always making sense, there are actually deeper meanings to both. So, what are they?

What Does It Mean To Be Rich?

According to many financial planners, being rich doesn’t always relate to having plenty of money in your bank account. It also doesn’t relate to your social class or your lifestyle. In fact, everybody has their own opinion on how to define how rich somebody is. In generic terms, being rich is simply earning a high income, but also holding a high amount of outgoing costs. For example, relating the terms to job roles, occupations like dentistry will offer you a high salary making you potentially rich. But, with taxes and bills to pay, your monthly income will soon lower itself potentially leading to financial worries occasionally.

A large percentage of those who have money and we classify as rich are those who are able to flash their money to other people. This is very common in celebrity lifestyles. Many celebrities earn a high income but they end up spending more than they have, sending them into debt. But, whats the difference between the rich and the wealthy?

What Does It Mean To Be Wealthy?

Being wealthy links to financial freedom, if you have the ability to manage your finances without feeling any worry or stress, the chances are you’re placed into this category. Wealth can also be determined by your net worth and how you manage your finances correctly enough so they make their own money.

Similarly to the term rich, wealthy has many definitions. One of the easiest to understand explanations was created by R. Buckminster Fuller. He suggested that ‘wealth is a person’s ability to survive X number of days forward.’ In other words, how many days could you survive for if you stopped working. Depending on your lifestyle and how much you spend each month, you answer will be completely different to those around you.

How To Become Wealthy

Those who are wealthy know exactly what to do with their finances. This involves how to take care of them, what to and what not to spend money on and even where to put their finances to make build the bank. Becoming wealthy is not an overnight process, and it’s definitely not as simple as you would wish. But, that doesn’t mean it is unachievable. Therefore, here are three ways to help you find financial freedom.

Saving and Investing

Firstly, you need to make sure that you’re making the most of saving and investing. In order to do so, you must have a budget which works perfectly to you as an individual. Unfortunately, finding the right budget and the right money management technique can be a very long process. However, once you have found a technique right for you, it almost ensures the safety of your finances.

Fixing Habits

Secondly, fixing your spending habits is essential. You must figure out the differences between your needs and your wants when it comes to making purchases. Splashing the cash on unnecessary items can be very damaging to your bank accounts and will definitely hold you back from reaching wealth.

Debts

Lastly, paying off debts is one of the most important aspects. This will become easier once you have figured out the saving and investing aspects along with having fixed your spending habits. Paying off debts will be pushing you backwards as you always have an unwanted bill to pay each month or so. Not only this, but having multiple debts could even cause financial confusion, leading to demotivation. Once your debts are clear, you will then have a clearer path to finding financial freedom.

You should bear in mind that minor faults along the way are normal. In fact many people who are trying to determine the right from the wrong may end up with more debt than they began with. Although it may set you back, there are thankfully multiple options you can turn too. For example, if you find yourself struggling financially with no options available, here at BingoLoans we can help, click here for more information.