Are You Rich or Wealthy?

By November 20, 2018Action, Debt, Desire, Focus
There is a phenomenon on social media at the moment in China called ‘flaunt your wealth’. The idea is people lying next to their luxury car as if they have fallen out, with their personal belongings from their bag spread around them. These items are luxury products that prove how much they have to spend. Their hashtag on Instagram is #fallingstars

It occurred to me when reading about this in the press that this is a prime example of people who want to show that they are rich. But the bigger question is – are they wealthy?

In today’s world of brands and relatively easy access to credit, it has not been too hard for people to look like they are rich. European cars, clothes with high end labels all over them, and jewellery and handbags to give the display of money.

What has not always gone with this display is real wealth. While rich may be all the luxury items that are displayed to the world, a lot of the time those people have no real assets that they own, and no liquidity or cash if they needed it. Many are living from one pay cycle to the next while paying off all the beautiful things they own – which instantly lose value and keep them in a cycle of debt.

While the #fallingstars might be the extreme of these examples, the different between rich and wealthy is obvious at home too. It’s why as a nation we are in a massive amount of personal debt, and mortgages are so high. While many of us aspire to the finer things in life, much of the time we can’t really afford them. So what starts as ‘treat yourself to the best’ becomes a life trapped in an endless cycle of paying for what you never could really afford.

Wealthy people have multiple income streams, lots of assets they own and they keep their overheads as low as possible to maintain a standard of living that is comfortable but not wasteful.

Those who are rich have lots of leased or financed items they never own, lots of debt, and are constantly juggling to pay one thing or another. While rich might look more glamorous on the outside, it is a whole lot better to be wealthy.

A simple trip to the mall will demonstrate how easy it is to fall into the trap of wanting things you don’t need. Of justifying a high price with an “I deserve it” attitude. In fact, malls are some of the most dangerous places to be until you truly understand the difference between rich and wealthy.

Because wealthy people can walk through a mall, have a purpose for being there, and bypass everything else unless it represents true value. Whereas someone with a rich mindset will be sucked into whatever is the latest beautiful thing they see.

I have decided in my 40’s that being wealthy is my true goal. Of course getting there isn’t easy. It requires budgeting, saying no, sacrificing and making sensible decisions. It’s definitely the harder road in the short term. But long term, this mindset is the real ticket to a much easier life. So, if you have been acting more like someone who is rich than wealthy, maybe it’s time to assess what you really want out of life. It is still serving you and bringing you happiness?

Because wealthy equals freedom – something we all want.

Here’s to a wealthy mindset,