According to Google, the definition of wealth is, “an abundance of valuable possessions or money.”
Although I agree with this brief explanation, I also believe that the topic of wealth is much more than an overflowing bank balance and a high spending power.
So, let’s discuss what wealth really is.
Rich or wealthy?
Although both are desirable, being ‘rich’ and being ‘wealthy’ are not the same thing.
Rich people do indeed have lots of money and a high cash flow, but they also have high expenses. They will drive a fancy car and live in a big house, all of which, cost money.
A rich person may bring home a £250,000 annual salary (which would put them in the top 1% of UK earners) but they will spend every last penny of it on their lifestyle. Some of them spend even more and accumulate high amounts of debt.
Wealthy people transcend this ‘get paid and spend it’ hamster wheel. They have accumulated a varied portfolio of assets which usually include investments, property, and possibly a selection of businesses. They are not trading their time for money and their wealth is sustainable.
Wealthy people know how to create money, whereas rich people only have money.
An easy way to distinguish rich from wealthy is to ask yourself this simple question. How long will the money last? Are they able to pass their fortunes onto future generations, or will the money dry up as soon as they’ve lost their earning potential?
“True wealth is measured in time, not currency.”
How you make your money is often more important than how much you make.
I would much rather earn £31,461 per year (the UK average salary for the year ending 5th April 2020) in passive income than £250,000 per year (top 1%) from a full-time job.
I’d also much rather work at something I love and have a passion for than spend time doing something that I hate or that I don’t believe in.
Don’t get this point confused, the wealthy still work; not every day is a vacation. But overall they enjoy their work and they’re not trading their time for money. Instead, their creating incomes streams which help to scale their wealth far quicker.
Related Read: How (& Why) To Detach Your Money From Your Time
The wealthy have total control over their time and freedom. Each day is their own and they can spend their time as they please, working or not.
You could be one of the richest people on planet Earth, but without your health and vitality, it means nothing. Money will only get you so far.
We’ve all heard the saying that ‘health is wealth’, and yet many of us put money first by opting to save a few quid at the expense of our health.
People do this even unknowingly!
For example, take the common stereotype of overweight middle-aged men spending numerous hours cleaning and caring for their cars. They claim that they don’t have time to exercise and take care of themselves, this is because they’re too busy taking care of a material object.
Caring for your car may give you a few more years of trouble-free driving and a higher price when it comes to selling, but taking care of your health may give you an extra 10-20years of life!
[To all middle-aged men reading this, don’t be offended by the above stereotype, it was just an example]
Your money can buy you the finest physicians and give you access to the most advanced medical procedures, but we are still mere mortals.
Wealthy people understand the value of their physical and mental health and they prioritize it over their money-making adventures.
One factor that is often overlooked when talking about wealth is that of privacy.
We live in a world where everyone wants to be an Insta-model, a half-naked reality TV star, or a celebrity YouTuber. Although these options can considerably increase your bank balance, you need to trade your privacy in order to obtain it.
The pitfalls of being in the public eye are many. I’m sure I don’t need to tell you of the mental health implications that come with this celebrity status. But this is not just a warning for those that want to be a public figure, it’s also a warning for those that intend to show off and speak openly about their wealth.
When you are known for having money, even in small social circles, it can be difficult to know who to trust and you openly make yourself a target for dodgy investment scammers, home burglars and thieves, and let’s not forget golddiggers.
The sweet spot is being able to create wealth without the world knowing who you are or how much you have.
You want to be able to fart whilst walking down the street and not worry that it’s going to end up on some news website or become a viral video, and you want to be able to form relationships with people who don’t have an alternative agenda.
Wealthy people do not look wealthy. They do not need to prove how much money they have and they certainly don’t want to draw attention to themselves because of it.
Are you wealthy?
Wealth is much more than your bank balance.
If you can earn a living passively whilst still being in control of your own time and freedom, if you have a good level of health with years left on the clock, and you are able to maintain a level of privacy over your financial affairs, then you, my friend, are wealthy.
Wealth is being free from constraints. You can do what you want when you want without any financial, health, or time constraints placed upon you.
The bottom line…
Wealth = freedom
P.S. Most other normal people would probably add family to the list of what makes someone wealthy. I personally prefer my own solitude but feel to add it if it’s important to you.
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- My Super-Simple 4 Step Guide to Building Wealth
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