Being rich and being wealthy, are they the same? Probably you will say yes, but they are not the same.
Being rich is probably shown by a large amount of balance in your bank account or you are receiving big pay-checks every month. People who are rich can be seen- they wear the money, show the money and drive the money, and end up with only expenses and debts under their names if they spend more than they earn. So being rich doesn’t make you wealthy.
Wealth has been mis-read as “a big buck of cash”, but it’s more than that. It’s the amount of net assets (total asset minus total liabilities) under your name. What wealthy people have is not fancy cars, new gadgets but assets, including properties, stocks, other investments, and cash. They turn cash into assets that can be easily used to make more money for them, even when they are sleeping.
You might say, being rich is actually a step behind being wealthy. But the true is, most of the wealthy people are not actually making more money than rich people. According to the author of the book “The Next Millionaire Next Door” who surveyed more than 600 millionaires in the US, disclosed the truth that almost 90% of the millionaires are self-made. They don’t make as much money as you think a rich person should make, but they accumulate their wealth through a frugal lifestyle- save as much as they can and invest it. Point blank, you don’t need to be rich to be wealthy.
Wonder how to be wealthy? Don’t focus on how big your pay-checks is but focus on how to turn your cash into assets- being big or small. Of course, he who doesn’t have a plan is about to fail. You need a plan that fit your situation to start cumulating assets.
Step 1: Save as much as you can (10–15%) from your income. As we mentioned before, your income should always go into your savings before your expenses.
Step 2: Invest your savings as soon and as much as you can based on your risk profile and plan with the money.
Step 3: Get rid of debts, especially high interest ones.
Step 4: Earn more money with other income streams, if possible.
There’s no short cut to wealth. You need to commit to it, put in effort and have a clear financial goal to make it happen. It’s a mindset you need to have- it doesn’t necessarily start with a big bunch of money to be wealthy.
