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Rich vs Wealthy: What Are The Key Differences?

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In this article, we compare the Rich vs Wealthy:

It’s often assumed that being rich and being wealthy are the same.  Likewise, many think that all rich people are wealthy and all wealthy people are rich, but that isn’t the case when broken down into its core components.

Rich and wealthy people often have very different stories and live differently.  They also have other goals, ambitions, and plans for their future.

However, they also share a few similarities, which we will dive into.

There is one key aspect that wealthy people don’t typically share with those who are rich, which we will break down below.

It’s well worth the read, but be my guest if you want to jump straight to the good stuff!

We will focus primarily on financial wealth, but we recommend you also learn about the Different Types of Wealth while you’re here!

Rich vs Wealthy Comparison Graphic


Rich vs Wealthy: What’s The Difference?

The main difference between the rich and the wealthy is their income source.  The rich work for money while the wealthy have money work for them.

People are often surprised to learn that being rich and wealthy doesn’t necessarily go hand in hand.  Sure, both groups of people have lots of money, and there’s no denying that.

The main differences come from the mindset of a rich individual vs a wealthy individual, how the money is being used, and what sort of longevity and conditions are at play here.

Let’s take a look at a surgeon, for example.  Let’s assume this is a specialized surgeon, like a cardiothoracic surgeon or neurosurgeon.

They’re working in a particular high-paying field.

They’ve got a high income, and (my apologies for stereotyping here) they likely have a big house, a few nice cars, and possibly a boat or a vacation home.

Rich Example


These people are rich.  They’re flush with cash and have some fun toys to help feed that “work hard, play hard” mindset.

This same surgeon likely didn’t just outright pay cash for their high-6, low-7-figure home.  Unless they’re decades into their career, they likely haven’t paid off their hundreds of thousands of dollars in college and medical school loans.

They probably have a few car payments.  But what happens if this surgeon can’t be a surgeon anymore?  How will their bills get paid?

How will they keep up with their lavish lifestyle?  They’re rich, but how sustainable can it be without their income source?

The same could be said for someone who, for example, created an internet startup and sold it for $10 million.

They can buy some fancy stuff and have fun, but if they can’t make that money work for them, that windfall or nest egg will eventually dry up.

I think you can see where I’m going with this.

A wealthy person can also have whatever their heart desires.  However, their lifestyle isn’t conditional on their income source or nest egg.

Instead, they’ve meticulously planned out where every dollar goes, focusing solely on making their money work for them.

Rich vs Wealthy Comparison Chart

A wealthy person doesn’t need to worry about losing their job.  They don’t need to worry about debt or blowing through the money they’ve saved up.

Do you think someone like Warren Buffett or Jeff Bezos pays a mortgage?

Do you think they hop onto the Capital One auto finance website once a month to make their car payment?


They’re debt-free and have amassed true wealth.  Furthermore, the sources of their wealth are likely diversified and will continue to work for them regardless of what happens in their lives or with any economic downswings.


Rich vs Wealthy: The Process of Evolving

Both rich and wealthy people have what ordinary people consider life-changing amounts of money.  Think of how they got there as a simple process.

Unless you’re extremely lucky or were born into wealth, you have a process to follow.

The average Joe would follow this process: 

Normal person —> Rich person —> Wealthy person

Someone who has things more challenging than most will have an extra step:

Poverty —> Normal Person —> Rich Person —> Wealthy person

In the example above, that surgeon was just a regular person in medical school.  They got high-paying jobs and became a rich person.

Many people that make it this far stop right here.

Some of them may even have a good amount of F-You Money, but not enough to help them maintain their current lifestyle in the long run.

This is because they make the crucial mistake of falling victim to Lifestyle Inflation and not using their newfound riches to segue into becoming wealthy by investing in their future.


What Does It Mean To Be Rich?

You’re probably thinking, “Chris, why would you even waste time putting this in here?

Everyone knows that being rich means, you’ve got more money than the average person.” And, well, you’re right.  But (as you likely saw in the example above), I want it drilled into everyone’s head that a rich person’s money is conditional.

It’s conditional on hard work, it’s conditional on keeping their job or keeping their business running, and it’s conditional on when that windfall or nest egg will dry up.

Rich people often have to work (and work hard!) to maintain their lifestyle.  Or they must be very cautious if they’re working with a windfall or nest egg.

A rich person’s money is finite and is always at risk of running out.  They often have high expenses and debt.  A rich person’s assets are often in cash and materialistic things.

Heck, a rich person doesn’t necessarily have any financial planning going on or even plan out their long-term retirement goals, and this is where they fall short.


What Does It Mean to Be Wealthy?

Now we’re getting into the good stuff!

Being wealthy is in an entirely different league than being rich.  Becoming wealthy is much harder to achieve from the ground up, but it’s also much more sustainable and pays much better in the long run.

It should also be noted that being wealthy vs being rich doesn’t mean just surpassing a particular net worth.

For example, one person with $10 million in liquidity and assets can be rich, while another with $10 million in liquidity and assets can be wealthy.

A wealthy person’s focus is on longevity and long-term goals.

They know the value of their time.  Wealthy people take the proper steps to ensure that they are set for life and can weather any storm that comes their way.

A wealthy person’s money and assets will generate more money and assets, and more often than not, that income it generates is passive or primarily hands-off.

They will also meticulously track every single penny that gets spent.

Rich vs Wealthy Tracking Net Worth

Side note: Tracking your expenses is easier than you think.  I use Personal Capital to help track my expenses.  It’s been an invaluable tool on my journey to financial independence.

Wealthy individuals have enough money to meet their needs while not going out and working to maintain their net worth.  Instead, they spend their efforts amassing assets that will generate income.


FIRE With Real Estate Is a Great Way To Become Wealthy!

Financial Independence through real estate is a great way to become wealthy, and it’s also an excellent example for me to use to illustrate the differences between Rich vs Wealthy properly!

Whenever you break down the assets of the wealthy, there’s almost always one constant: Real Estate.  This is because real estate is a tried-and-true investment.

Sure, market slumps and natural disasters happen, but property values rise over time.

Properties can generate mostly passive income when things are done correctly, such as renting them out and using a property management company to handle the legwork if you want a hands-off approach.

This may sound crass, but sometimes market slumps and natural disasters can even help the rental market as supply will be low, but demand will be high.

Let’s revisit that $10 million rich person vs. $10 million wealthy person example from a few paragraphs above, and we’ll use that surgeon from earlier in the post.

Let’s say our surgeon friend from earlier has had a decent career spanning 20 years and has $10 million in assets.

A good chunk of that would likely be in their primary residence, and some might be in their vacation home or condo.  But, of course, you can’t have a lovely vacation home without a boat, right?

They’ll likely have a couple of cars; their spouse and kids also have the most admirable cars.  They’ve got the coolest toys and electronics.

Our surgeon friend likely has been making contributions to a 401k or IRA.  They might also have some stocks and index funds.

It’s easy to add up to $10 million once you break everything down.  This surgeon is rich!

Now let’s look at this surgeon’s buddy from high school who took an entirely different career path.

Their salary was significantly less, but by avoiding lifestyle inflation, avoiding debt, investing correctly, and finding passive income streams, they’ve also amassed a $10 million net worth.

Early on, when this surgeon’s buddy was ready to sell their first home, they realized they could rent it for more than their monthly mortgage.  This created a nice positive and passive income stream.

Over this same 20-year span, the surgeon’s buddy lived the same lifestyle while using his rental property income to fund the purchase of a second rental property, then a third, then a fourth, and so on.

Twenty years later, most of the surgeon’s buddy’s $10 million in assets is in real estate properties generating passive income.

This person has no crippling debt; they took the necessary steps to pay off student loans early, all of their needs are met, and their assets are generating more and more income each year.

They are just as rich as the surgeon, but, more importantly, they’re on their way to becoming wealthy instead of simply being rich.

Real estate isn’t the only way to become wealthy, but it is an excellent example of the Rich vs Wealthy mindset.

We STRONGLY encourage diversification, but owning real estate is a common denominator among nearly all wealthy individuals (except for Warren Buffet, who favors Real Estate Investment Trusts, but that’s another topic!)

The Inspire To Fire Podcast offers industry experts and regular individuals insights on their journey to financial independence through real estate and other financial and early-retirement resources.

Listen Now: Apple | Google | Spotify


The ONE Trait All Wealthy Individuals Share

Wealthy individuals understand the importance of TIME.

They value their time, and they know how much it’s worth.  They strive to have their assets generate a living to have the time needed to do what they love, whether spending time with loved ones, following a passion, or diving headfirst into a hobby.

Wealthy individuals value their time.

Rich vs Wealthy Differences

A rich person might say they value their time, but they’re likely spending a ton of time working, trying to make more money to buy more things.

As a result, they’re not putting much effort into building up a collection of wealth-generating assets.

How much is your time worth?  Take a second to divide your income by how many hours you work.  If you earn $50,000 per year, how much is that broken down per hour?

If you have a $50k salary and want to buy a new iPhone, that would take you over 40 hours’ worth of work to pay for it!  Once you start breaking your purchases down like this, it will open your eyes to how valuable your time is!

Let’s again look at the surgeon from above (as if we haven’t picked on this poor guy enough already!) He works atrocious hours and has not taken steps toward investing for a wealthy future.

If he valued his time more, he would have done more to work towards wealth.  But unfortunately, some people are complacent with being rich, regardless of how much of their time it takes from them.

If you want to think like a wealthy individual, you need to focus on your time’s importance.

“When you understand the value of time, the resource and the wealth of time, you will be running away from the crowd.” – Sunday Adelaja

This comes from his book: How to become great through time conversion: Are you wasting time, spending time, or investing time?


How Does Someone Get Rich?

Getting rich is the easy part!

“Chris, if getting rich is easy, why am I reading a finance blog written by a pharmacist?”

Let me rephrase that!  When it comes to getting rich vs becoming wealthy, getting rich is the easier of the two!

Being rich boils down to how much cash you’ve got in the bank and how many flashy things and cool toys you own.

Whether you’re getting rich or becoming wealthy, you need to find that source (or sources) of income.  Then, what you do with that income determines if you’re rich vs wealthy.

If you’re young and have the right resources and social support, the first obvious choice is to attend college and major in a high-paying field.

But not all of us can do that; some might be just a little past our prime.  We might be unable to change career paths or return to school, so what now?

I could spend forever writing about ways to make money, but that’s not quite what this article is about.  Simply put, you’ll need to get back to the basics.

Pay off your high-interest debt, prioritize your investments, and spend time developing a passive income stream.

The internet is a fantastic place with loads of free information all over the place.  You might even stumble across hidden gems, such as How to trick yourself into becoming rich!


How Does Someone Become Wealthy?

Unless you’re born into it, or you’re that lucky person in South Carolina who won the $1.5 billion Mega Millions ticket, becoming wealthy will take some work.

A lot of work.  But it’s not impossible!

Remember, wealth is not about achieving a specific dollar amount in the bank.  Instead, wealth combines many different things and, most importantly, having the right mindset and determination.

There are a few tips that all wealthy individuals can agree on.  You’ll notice that some of these go hand in hand with the “How does someone get rich” section above.


Value Your Time

As we mentioned earlier, wealthy people understand the value of their time.  One thing that all wealthy people avoid is procrastination.

People in their 20s and sometimes even 30s believe that retirement and wealth-building magically come later in life.  So they want to enjoy their money now and start saving or investing later.

Before they know it, 10 years have passed, and they’ve missed out on a decade of market favorability and compounded interest.


YOU Come First

It sounds cliche but INVEST IN YOURSELF!  You are the only person that will control your wealth.  Spend time learning new things, meeting new people, or working on your mental health (like learning to move past prior insecurities).

The more educated, well-connected, and mentally strong you are, the more options and opportunities you will create for yourself.


Stop Looking For Shortcuts

There is no magic formula or get-rich-quick scheme that works.

Every minute you spend looking for the following shortcut is wasted that could’ve been spent focusing on something more productive.


Pay Down/Off Your Debts

Leave the debts to the rich people.  If you genuinely want to be wealthy, paying off your debts means you’ll need less money to sustain a wealthy lifestyle.

There are plenty of tried-and-true debt strategies, from using the ‘snowball’ method to pay off high-interest debts first to using the equity in your home to consolidate all of your debt into a low-interest payment.


Create a Budget

This seems easier said than done, but it’s likely one of the most challenging steps here.  It takes a lot of discipline to create a budget and stick to it.

To be wealthy, you must make more money, spend less, and invest wisely.  Adhering to a strict budget now will give you a head start for the future.


Learn When To Take Risks

The younger you are, the more of an advantage you have when taking risks.  A 25-year-old taking a risk isn’t as dangerous as a 65-year-old because the 25-year-old has plenty of time to recoup that money if the risk falls through.

Older individuals often take risks that have a smaller reward opportunity, but they are very calculated risks.

All wealthy individuals take chances when the time is right.  But, regardless of your age, it would help if you took some risks.

The younger you are, the higher your risk: reward ratio can safely be.



Your money has to work for you, and it can do so in many ways.  Wealthy individuals often have numerous income streams from many different sources.

Diversification protects wealthy individuals from losses and market swings.

Additionally, when you diversify your investments, you have a more significant opportunity to find a successful venture as you try different approaches.


Rich vs Wealthy: Personality Traits of Successful People

You can see that being rich and wealthy involves two vastly different lifestyles and mindsets.  However, despite those differences, there are still some psychological traits that both groups share.

In 2018 the British Journal of Psychology published a study that uncovered the personality traits of high-net-worth individuals.

Psychology buffs who want to do so can download a document of the supporting data from the study.

Rich vs Wealthy Traits

High-net-worth individuals are more likely to be:

  1. Emotionally Stable – They make decisions based on facts, research, and data.  Investing money based on emotions might work out sometimes, but over the long haul, it can be disastrous.  The sunk cost fallacy is one example of emotions getting in the way.
  2. Extroverted – You’ve heard “Closed mouths don’t get fed,” right?  Individuals with high net worth are often very extroverted.  They have no problem meeting new people, making connections, networking, and speaking up when needed.
  3. Self-centered and narcissistic – We often associate narcissism with being a bad thing, and in many instances, it certainly is.  However, when it comes to amassing wealth, narcissists almost always prevail.  Why is that?  It’s because narcissists have VERY high expectations for their success.  They want to be the best and at the top of the economic food chain.  They have a specific drive and determination that cannot be learned or taught precisely.
  4. Conscientious – This one is simple: high-net-worth individuals do what needs to be done rather than doing what they want to do.  They make intelligent decisions, focus on long-term goals, and avoid instant gratification.  Even marrying someone conscientious can lead to a more prosperous lifestyle as their traits will often rub off on their spouse.
  5. Less neurotic – This goes hand in hand with being emotionally stable.  Successful individuals are less likely to respond quickly in a negative way or to let anxiety or fear drive their emotions.  Instead, every step they make is calculated and purposeful.  Being less neurotic also helps wealthy individuals feel comfortable taking calculated risks.

Okay, I get it, you weren’t magically born as someone with a unique combination of traits like a humble narcissist who is immune to mood swings, but that doesn’t mean you need to change who you are!

You’re likely an adult who is set in your ways.  You can’t change who you are, but you can change your behaviors and who you associate yourself with.

You can’t “trick” yourself into being an extrovert if you’re an introvert.  But you can push yourself to find alternate ways to communicate and collaborate with other individuals.

If, as an introvert, you’re looking for a partner, try and find someone who is extroverted.

If you genuinely want to be successful, put some effort into stepping out of your comfort zone.

Eventually, you’ll need to set aside your fear and try new things, take some chances, and do something you usually wouldn’t do.

Again, it may feel uncomfortable, but try to emulate some of the behaviors of wealthy individuals as their actions have been scientifically proven to generate a high income.

Related Posts:


Rich vs Wealthy: It Starts With Knowledge and Networking

If you’re here at this blog, you’re likely in the early stages of your quest to become financially independent.  Now is when you want to act like a sponge and absorb as much information as your brain can handle.

Start networking with like-minded individuals.

Now is the time to surround yourself with people and information to propel you into the early stages of financial independence.

It’s up to you whether you want to be rich or if you want to be wealthy.

Financial independence is a significant first step.

The InspireToFire Podcast can help you through the early stages of financial independence.

Inspire To FIRE Podcast

Our podcast takes a unique approach by interviewing guests from all backgrounds and walks of life.  All of our guests share the same goal: Financial Independence.

Listen Now: Apple | Google | Spotify


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This information is my opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.