"Which is More Important: Getting Rich or Building Wealth?"

Even though these words are used interchangeably, there are subtle yet distinct differences.

As I grow older, I start to realise chasing that bag or working for money is so linear and meaningless. So I began to read more books like Rich Dad Poor Dad by Robert Kiyosaki and discovered a perspective on money.

Your view on money depends on how you feel towards money.

Accumulating assets with mindful spending and appropriate money allocation

The terms "rich" and "wealthy" are often used interchangeably, but they have distinct meanings:

1. Rich: Being "rich" typically refers to having a high income or a significant amount of money or assets. It often conveys a sense of abundance and material wealth in the present moment. Someone rich may have a luxurious lifestyle, expensive possessions, and access to various amenities and experiences. However, being rich does not necessarily guarantee long-term financial security or stability.
   

2. Wealthy: On the other hand, being "wealthy" goes beyond simply having a high income or abundant possessions. Wealth is more about the accumulation of assets and resources that can generate income and provide financial security over the long term. Wealth encompasses not only monetary wealth but also assets such as investments, real estate, businesses, and other valuable holdings. Wealth is often measured by net worth—the total value of one's assets minus liabilities.

#1: Short term and long term thinking

#2: Spending habits and appearance

#3: Relationship with money

Lifestyle and Mindset differences

Short term and long term thinking

Riches may focus on fulfilling their short term needs and goals which is usually something they want in the next 5 years or less. What they are working for right now is significantly motivated by their short term goals. They may have crack the code of earning alot but they may not be able to sustain and roll the earnings for a more long term, more sustainable cycle. The gradual strategic planning that a wealth person adopt is what set them different and put them in the place of constant "delayed gratification" mindset.

Spending habits and appearance

This may sound cliche but we have to see the real side of things. We see those with designer brands, loud expensive jewellery and gigantic homes but we don't see their investment or bank account. They could be funding their lifestyle on credit card debts.

Quiet lifestyle or quiet luxury brands that focus on basic minimal branding clothing but of superior quality like Loro Piana or Brunello Cucinelli, has more story to unfold. The subtlety attracts differently and those who know, knows.

Those building wealth put more time to their business and how they can flourish from 7 figure to 8 figures or they put more time on how they can be in minivan doing world tour without worrying about running out of money.

Relationship with Money

Finally, individuals tend to develop varied relationships with finances depending on their specific financial objectives. If you consistently indulge in luxury items to maintain a lavish lifestyle, you'll find yourself constantly striving for more income to sustain those escalating expenses. It's a detrimental cycle of perpetually needing to earn more to accommodate increased spending, akin to a treadmill steadily accelerating.

Contrastingly, the essence of wealth accumulation lies in leveraging your money to work on your behalf, rather than vice versa. By engaging in strategies such as investing in tax-advantaged accounts, you can enjoy the passive growth of your wealth through the power of compounding returns, affording you the opportunity to sit back and watch your financial resources flourish.

Bottom line

I hope you understand one or two things around getting rich and building wealth. Most importantly our basics in building money must be strong first and we have to double down on what that can bring in that 6-7 figure income. Only then, we can make that decision of which lifestyle we'd like to choose.

It is not a sprint but a marathon. Be happy with what you have and always do better than your yesterday self. Practice mindful consumption of contents on social media and it will help you live a happier and more financially thriving life.

Leave your comment here and reach out to me to claim your FREE Financial planning consultation.