My Official First Post. Steemians.
Being rich and being wealthy seems to be synonymous as both involves having a lot of money. However, it's always very easy to know differences between the two. If you notice, there are a lot people in life who and rich but are not wealthy.
In my contest and find out the main difference between the two is knowledge. because knowledge they say is Power.Wealthy people know how to make money and sustain it while rich people cannot sustain. Rich people are motivated by money but wealthy people are motivated by their dreams, purpose,tenacity and passion. Most rich people make a lot of money with their paychecks but the moment they stop working, they also stop making money.
Being wealthy is defined as that status of an individual’s existing financial resources that supports his or her way of living for a longer duration, even if he or she does not physically work to generate a recurring incomers even when they are dead their wealthy is always their.
For example, if a person’s monthly expenses amount to 25,000 Naira and he only have 100,000 Naira in his savings, his wealth is approximately four months or 120 days. Wealth, therefore, is measured in time, and not in amount of money that you have. It suffices to say that wealth is dependent not only to the amount of income but also to amount of expenses one makes. So therefore. If your expenses get close to your earning you are writing an invitation to bankruptcy.
Wealthy people can build sustainable wealth that can last for years through asset investments producing multiple streams of income.
Rich people, on the other hand, may get money in an instant such as inheritance from family or winning a lottery. However, because of lack of proper mindset and poor money management skills, all of it can be lost in a short period of time. It makes sense that if you did not work hard to earn and build it, then it can just easily pass on your hands and splurge it on things which are not important. Like buying luxury thing which are not productive. Some of these people are more commonly known as ‘one day millionaires’. Now they have it, the next time they don’t.
Wealthy and rich people both may experience downfalls and failures in their ventures. However, because wealthy people are knowledgeable when it comes to money matters, they can whether the storm and get back to their fit in no tinme. But in contrast, rich people may find it so difficult to attain what he or she previously has. In essence, wealthy people are financially free while rich people are not.
Since wealth is not an overtime success, we must always learn to differentiate assets from liability. Always endeavour to buy what will increase you wealth and not to focus on material thing in life.
My submission is we should always try to be wealthy and not be rich. Because there is a big gap between them.
Now that you know the difference between wealth, and riches the next thing to do is to calculate and monitor your wealth ratio on a monthly basis to properly administer the financial and economic aspect of your life and to sustain them. The formula is:
Passive income + portfolio income/total expenses
The objective of calculating your wealth is to have your passive and portfolio income greater than your monthly expenses. The moment you have a ratio of one is to one or more at any given month, then it indicates that you have increased your financial capacity to live a better life. On the other hand, if your wealth ratio is less than 1, it implies that you are still in a financial dilemma and your cashflow does not meet your basic life standard
The key in improving your wealth is to regularly monitor and increase your passive and portfolio income by increasing your means to earn more instead of acquiring more expenses. The moment you decide to make the passive and portfolio income a part of your financial habit and discipline yourself in building it, your are on your way to financial freedom. This is the path in maintaining a strong wealth foundation
Refence:
www.millionaireacts.com The author Tryone Solee.
