Random musings: Would you rather be rich or wealthy?

Monday, May 15, 2017

Would you rather be rich or wealthy?

Aren't they the same thing? No, not really...they're related but not identical. I think this picture sums it up very well:

Wealth is not how much money you have, but how long you can live without having to work again. Many Americans, whether rich or poor, are only one paycheck away from financial ruin. If you have no savings, you have no wealth. If you have enough money to cover six months of expenses, you have six months of wealth. But if you make enough money from residual income streams to cover all of your expenses every month, then you have unlimited wealth...whether it's a few thousand a month or a few million, both are equally wealthy because neither has to work.

From Rich Dad, Poor Dad by Robert Kiyosaki:

Ultimately, it’s not how much money you make that matters but how much money you keep—and how long that money works for you.

Every day, I meet many people who make a lot of money, but all their money goes out of their expense column. Every time they make a little more money, they go shopping. They often buy a bigger house or a new car, which results in long-term debt and more hard work. Nothing is left to go into the asset column. It’s this kind of behavior that separates the rich from the wealthy.

If you haven't read the book, I highly recommend it. And I also recommend playing the "Cashflow Game", also by Robert Kiyosaki. I've played it many times, either online or at The Danville CashFlow Game Meetup Group-EastBayPlus Meetup. I've played at this Meetup many times over the past 5 years and at the first meeting is where I first heard about SendOutCards, which is my primary source of residual income.

But why can't you be both rich and wealthy? There's nothing that says you can't do both! In computer science OR means one or the other or Both. Most people think in terms of what's called an Exclusive OR which is one or the other but not both. Either/or is scarcity thinking...there's not enough to go around, while both/and is abundance thinking...there's more than enough to go around. Quit limiting yourself to either time or money and go for both time and money.