Difference Between Being Wealthy and Rich
There is a difference between someone who is rich and someone who is wealthy. Many people make the mistake of creating a goal to be rich. When you are rich, you have money for a short period of time. To simplify this, a person who is rich has not created enough streams of income where their money will create more money. An example would be an nfl star who makes three million a year, spends most of what he earns and retires with not much left. He didn’t invest any of his money so there is no way that he will be able to sustain the three million dollar a year income.
Many of us concentrate on the now and ignore the possibility that our efforts can be sustained for generations to come. Having wealth is having money that is sustainable. Wealth is measured in time and not dollars. If you were to stop working (making earned income), how long will you be able to maintain your current lifestyle? Those who are wealthy will be able to maintain their lifestyle for generations. This is achieved through the power of compound interest, passive and residual income, and most importantly having their money work for them.
“That’s fine and good, but how do I become wealthy?”
The simple answer to this question is through education and wisdom. We aren’t talking about a college education here. Having a college education is a great way to raise your status in life and create a foundation. The most important education in regards to financial freedom is financial education. Having a college degree won’t prevent you from making more and spending more. It is important to understand how money works. Creating income streams that will continue to grow whether you work on them everyday is the goal. Wisdom is achieved through experience. It isn’t enough to know what needs to be done. You have to make daily attempts to do what needs to be done.
“Where do I go for this financial education?”
Create a goal to enhance your understanding everyday. If you don’t like to read, ask yourself how bad do you want to achieve your goals? If you want to learn how to play an instrument, do you just go out and buy an instrument and expect to sign a million dollar record deal the next day? Of course not! You would need to find a good teacher/mentor, practice everyday, and put forth the effort necessary to achieve greatness. The same applies to wealth. We must find a teacher/mentor that has done what we are looking to do, practice everyday, and never give up.
Related posts:
This is the great article,I want to add one more point,Investment is the key factor of being wealthy.There a good book reference about this named as “Rich Dad Poor Dad”.It is one of the best book in this perspective.Don;t fall in Rat race.www.Diffbtwn.com