Being Rich or Being Wealthy… Which would you rather be?

By Chadwick Roberson

jay-z-rich-wealthy

I often hear or speak with individuals who always say, “I can’t wait to be rich”. Well, that’s great and all but why not wealthy? What’s the difference between the two and why should we care? Let me take a few moments to explain and you tell me which one you would rather be…

When someone is deemed “rich,” they’ve only amassed their large sum of money and/or financial success from mostly one source in a recent amount of time. For example: lottery winners, new found celebrities and even high-paid professionals such as doctors or lawyers belong in the category of being rich. You can become rich overnight! I believe this is why people often say they want to be rich rather than be wealthy. Becoming rich can happen instantly, but it can also disappear as fast as it came.

Sources of being Rich:

  • Job Salary (i.e. $500,000/yr.)
  • Winning the lottery

So what’s being wealthy? The funny thing is, to be wealthy is to be rich through ownership of other assets. Wealthy people don’t rely on the job, their natural talents or just one source of income/asset. You can take away their job, if they have one, and they won’t be poor. If done properly, a person can amass a large sum of wealth if they adequately save and invest over time. If you take away the income of a rich person, they would likely become poor. This reminds me of a middle aged couple I helped at the bank while working in college. I remember he and his wife had your typical “9-5” job and didn’t live outside their means. If my memory is correct, they had generated over $2 million dollars in wealth by saving and investing while working! They’re still saving and investing as their wealth accumulates today. I remember saying to myself, “Wow, this couple has more money than some doctors and lawyers I know.”

Sources of being Wealthy:

  • Job Salary (i.e. $500,000/yr.)
  • Savings (using funds from your salary)
  • Investing
  • Homeownership
  • Insurance

Difference?
Simply put: Rich people aren’t financially free while wealthy people are.

I read an article recently and it talked about all the “Get Rich” schemes out there now. Ironically, you’ll find several of those but you can’t find any “Get Wealthy” schemes because building wealth takes time, patience and effort. Being wealthy not only benefits you in the short term but the long term as well. Your children’s children can benefit from wealth, not riches. So ask yourself, which would you rather be: Rich or Wealthy?

On Tuesday, April 30, NYULYP will host “Building Wealth Creation: Finding Financial Freedom,” an interactive workshop to assist young professionals in making the next step to financial independence. It will be held at Morgan Stanley’s Manhattan offices.

About the Author, Chadwick Roberson

chadwick-robersonChadwick Roberson is a Prime Brokerage Client Services Specialist in JP Morgan’s Investment Bank in New York. He serves as the primary contact for hedge funds and asset managers regarding their credit, rates and foreign exchange OTC trading business. He’s been a member of the New York Urban League Young Professionals since 2009. Prior to joining NYULYP, he was a member of the Black Executive Exchange Program (B.E.E.P)—the college arm of the National Urban League where he served as the Media Relations and Marketing Coordinator. His commitment to serving others and community involvement has blessed him with the opportunity to mentor young people from across the country.

Raised in Dallas, Texas he attended Southern University and A&M College in Baton Rouge, Louisiana. Chadwick is also a member of the Advisory Council for the Southern University College of Business.

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6 thoughts on “Being Rich or Being Wealthy… Which would you rather be?

  1. Interesting post. I think it fundamentally boils down to mindset. I don’t really think most people really care about how they obtain money as long as they are able to obtain it. I’m of the belief most people actually do want to be rich.

    I would also take a small issue with the importance of the job in the wealth equation. While many who are wealthy may not have to work, the gross majority of wealthy people do work. It’s a difference in mindset from someone interested in just being rich. Wealth accumulation does stem from the value of the assets you’ve amassed and investment decisions, but let’s be mistaken. The very foundation for wealth accumulation in the overwhelming majority of cases stem from a high salary (and probably bonuses) and prudent asset allocation. It’s very rare to make the type of investment decisions that lead to wealth without the right salary.

  2. MH – You raise some very valid and interesting points. This actually brought a smile to my face! I think the point that stuck out the most was in reference to people’s mindset. I agree that most people dont care about how they obtain money, they just want it. But I also think that most people are oblivious when it comes to really understanding what wealth is and how it starts. Secondly, the overwhelming majority of wealth is definitely generated by those with large salaries and big bonuses. But what I’ve come to realize is that the “middle class” person can do the same given the proper “mindset” and financial information and support.

    There is a severe lack of financial information(i.e Payday Loans & Check Cashing = VERY BAD)being distributed within our black and latino communities. I think people understand the need for financial guidance but don’t heed its importance. You can’t make informed decisions about saving and building wealth if no one has explained what wealth is and how to obtain it. People tend assume this type of information is not for them,so they keep on moving. I want to SHOW and TELL the “Not So Majority” people how they can start small but end big with their financial goals.

    This was only “Part 1” of the post. Part 2 is coming soon…Thanks MH!!! Let’s keep it going…

  3. Well.. I been with a person.. But wasn’t rich..living pay check by pay check.. But living up on the blue collar.. I left the relationship.. I feel alot. Better.. I have my own business and no credit cards!! And lots of money in the bank…Love it..

  4. Being rich or being healthy, which would you prefer? Money is not the most important thing in life. I think your health is the utmost factor that you need to pay attention too. Some rich people don’t know about this important thing. They try to get richer until one day, tons of money, weak health, what’s the point to have money? Even though money is important but your health is more important.

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