Saturday, March 17, 2012

living rich vs being wealthy

They may sound similar at first, but there is a big difference between living rich and being wealthy. Living rich is what most people aspire to. Live in a big house, drive a fancy car, go on expensive holidays and have all the trappings of life money can buy. Unfortunately, however, someone has to pay for it. Most likely by slaving away in the corporate world and sacrificing a big portion of your time to earn cash which you spend freely. Therefore you need to exert more effort as years go by since money flows out as fast as it comes in. You live in fear of losing your source of income because you are so used to living the high life.

Being wealthy means living below your means. This means driving a used car, living in a mid size home, staying at a 3 star hotel, buying things when they are on sale. This allows you to save your excess earnings and invest them in assets that appreciate in value. Over time, these assets will grow and eventually provide you with income. You then don't have to exert a lot of effort into maintaining your lifestyle. This is made easier since you don't need a lot of money to live the life you are accustomed to anyway. This means you have more time for leisure instead of time devoted to earning money. Having such assets allow you to feel secure that you can rely on something during difficult times.

Being wealthy is what investors strive to achieve. Being wealthy is a habit, it is a lifestyle worth emulating. Being wealthy allows you to have something that money cannot buy: peace of mind and quality time. Happy investing!