Many students do not know the difference between richness and wealth which lead to poor decision-making ability. Read on to find out the difference between them to know if you should aim to be rich or wealthy.
As a student, richness and wealth can appear similar; however, they are divergent words that have remained difficult to differentiate due to insufficient understanding of these two terms.
Fortunately, your ignorance ends today as this article will expatiate on the differences between being rich and being wealthy as well as give you one of the most reliable ways of becoming wealthy.
But before I expose you to all of this, let’s find out what the dictionary has to say about being rich and being wealthy.
According to the Dictionary, being rich is a state of having a lot of money and probably possessions while being wealthy deals with the state of possessing riches and valuable materials in abundance.
With the antecedent definitions, a guru in English might have no problem in identifying the key differences between the two but an average speaker might struggle to bring out these differences since the definitions have failed to exhibit a realistic picture of being rich or wealthy.
Wealth is far more than just possessing an abundance of financial and material assets.
Without wasting much of our wealth (since time is wealth), let’s find out the differences between them.
Difference Between Richness And Wealth
Mindset
The commonest way to quantify the financial status of people is through the use of tangible assets such as cars and houses which actually is a reliable measure but we all seem to have neglected a crucial intangible asset in our measurement known as mindset.
A person’s mindset will go a long way to determine if they are qualified to be called a rich person or recognized as a wealthy person.
Most rich people have a narrow mindset as they believe in an unreal competition with other people and hence, continue to spend unnecessarily to prove that they matter. On the other hand, wealthy people have a wider mindset and invest their money in things that matter.
Therefore, the amount of money one can spend does not count if the mindset behind such spending does not contribute to the future; something your generation can benefit from.
A wealthy mindset impacts generations but a rich one does not.
Financial Status
Consider this scenario, there are two businessmen, Mr R and Mr W; Mr R has a sum of 50 million naira and owes the bank a sum of 60 million naira while Mr W has a sum of 40 million naira and has a debt of ₦0.
Now, ask yourself: Who is rich and who is wealthy? A simple mathematical operation is enough to answer that.
Economics has taught us the difference between one’s net worth and gross worth which is the main reason Forbes would not rank the richest persons using their gross worth but net worth.
Wealthy people are those whose net worth (Assets – Liabilities (Debt + Expenses)) are positive in hundreds or more folds while the reverse is usually the case for most rich fellows.
Employment Capacity
A rich man can own an enterprise where he employs about 2-5 workers who earn stipends in exchange for their services while a wealthy man employs a large number of people; some of which can be called rich individuals.
The major idea of this difference can be summarized into a statement as “wealthy people employs rich people”.
Freedom
Many people think attaining financial freedom is paramount to getting wealthy but the truth is, financial freedom will only make you rich. There is more to life than having millions in your account; do you have time for yourself, family, and even friends?
I remember this sentence in the popular “Rich Dad, Poor Dad” when the author said, “poor people works for money but money works for rich people”.
A critical study of the phrase “rich people” defined in the book will reveal that the set of people being referred to are the wealthy ones which only implies that the actual rich people work for money.
So, not until you have attained freedom in all ramifications of life; for instance, you sleep at will, go on vacation as long as you wish, acquire things you desire, and so on can you be considered a wealthy person.
Wealth means “Being your own BOSS”; not the boss of a company but the boss of your life.
How Can A Student Become Wealthy?
If you check the internet, there are tons of suggestions on how you can become wealthy in school and some will even claim their methods can make you wealthy in just a day (quite hilarious).
Sincerely, all those suggestions are okay but you cannot get wealthy in one day, rather one day, you will get wealthy given that you are focused on achieving it. A typical layout of how to get wealthy will tell you to:
- Have a long-term financial plan
- Avoid debts
- Be modest (do not spend on unnecessary stuff)
- Invest and save a lot
But what do you invest in? This is the one secret I want to show you.
Investment is a really risky game especially when you are a newbie which is why you need to invest in assets of low risk and high ROI (Returns On Investment). Speaking of such an investment opportunity then “Education and Personal Development” should be the first on your list.
Investing in yourself makes your journey to wealth easier, faster, and fraud-free coupled with everlasting appreciating returns on your investments.
The wealthy people you see today have all invested in themselves to get to where they are today. However, wealthy people do not show off instead they search for more ways to maximize their potential.
You can save me the stress by looking at the biographies of wealthy people we have today to get encouraged.
Conclusion
Now, you have known what you should aspire for in life and how you can achieve this aspiration. Being rich is not a disease but can develop into one if you do not take care of these three things as a student:
- Budget
- Potentials
- Opportunities
Your ability to manage these three aspects of your financial life effectively from a young age will go a long way to determining if you will be rich or wealthy.
FAQs
- What is better being rich or wealthy?
Being wealthy is definitely better than being rich since you have total control of your life and wealth. A rich person serves under a wealthy fellow.
- Which is more important wealth or education?
Education is the key to accumulating wealth. Therefore, you can compare this to a building and its foundation where wealth is the building and education is the foundation.
- Is study important to become rich?
Yes, most rich fellows study a lot and get a good job that is enough to make them rich after school. However, you might not necessarily go to a school to study to become rich.
- Why is wealth better than rich?
Wealth is better than richness because it gives you the freedom to take full control of your lifestyle.
- Is wealthy the same as rich?
No, there are some differences between wealth and rich and we have pointed them out in the article.
- What makes someone wealthy?
A person can become wealthy by investing in himself, avoiding extravagance, and grabbing every opportunity that comes his way. Investment is also an important prerequisite to becoming wealthy.
