Rich VS Wealthy 2023 [What’s The Difference & Which Is Better?]

Updated On: 09/19/2023 is reader-supported. When you buy via links on our site, we may earn an affiliate commission at no cost to you.

Have you ever pondered the difference between being rich vs wealthy? Sure, they both revolve around having money but believe it or not, a deeper nuance separates these two.

After all, money itself isn't simply about the green bills in your bank account; it’s an open-ended conversation about freedom, security, and possibilities.

In society's eyes, having a wad of cash to throw around might label you as 'rich,' but there's another frame of thought that upholds 'wealth' as the trump card.

Understanding the distinction between these two can hold the key to better financial decision-making and long-lasting prosperity. So, let’s take this chance to change how you think about your money today.

Rich Vs Wealthy

The key difference between being rich and wealthy is sustainability. 'Rich' refers to having a high income or large amount of money short, while 'Wealthy' means having long-term assets that generate income, offering financial security over time.

Rich Vs Wealthy

What Does It Mean to Be Rich?

Being rich is a subjective term and often varies from person to person. However, in the financial context, being rich typically refers to having substantial financial resources to fund a lifestyle that goes beyond the necessities.

This state could encompass having savings for retirement, owning personal assets such as property or investment portfolios, and obtaining a steady income that comfortably covers living expenses.

Yet some people define richness as intangible aspects, such as healthy relationships, peace of mind, and personal fulfillment. Ultimately, being "rich" is not just about money but also about the quality of life and contentment.

Also Read: How Do Millionaires Make Their Money [Top 20 Investing Habits]

What Does It Mean to Be Wealthy?

Being wealthy refers to more than just having a high income; it encompasses a state of financial well-being where one has accumulated substantial assets and resources.

This entails earning more money than you spend, owning valuable properties or businesses, possessing significant retirement savings, and having investments that generate passive income.

Being wealthy means one is financially free; they are not living paycheck-to-paycheck and can comfortably meet their financial commitments without worrying about their stability or security.

Wealth is generally associated with a long-term approach to managing finances responsibly and making prudent investment decisions that help grow wealth over time.

Is Wealthy Considered Rich?

Is Wealthy Considered Rich?

Yes, according to the Modern Wealth Index by US bank Charles Schwab released in 2021, Americans say it takes an average of $2.2 million in personal net worth to be considered "wealthy." Therefore, while all wealthy individuals can be considered rich, not everyone is necessarily wealthy.

10 Tips for Becoming Wealthy

10 Tips for Becoming Wealthy

As you navigate the various roles in the financial theater, wouldn’t it be nice to move from being merely rich to truly wealthy? Money, after all, isn't the end goal – it's the freedom and opportunities money affords us.

To help steer you towards financial abundance, here are 10 invaluable tips on becoming wealthy.

Live below your means

Living below your means entails spending less than you earn. It’s the foundation of building wealth but is often overlooked due to our consumer culture. The concept requires discipline, sound budgeting, and sacrificing momentary pleasures for long-term financial goals.

By practicing this, you can maintain control over your finances and create a surplus of funds that can be saved or invested for greater financial security.

People who effectively live below their means minimize debts and are on a much faster track to financial independence because they set aside money continuously for their future needs and wealth accumulation.

Invest consistently

Begin your journey to wealth by committing to allocate a portion of your income towards investments consistently. The "paying yourself first" strategy involves regularly investing in income-producing assets such as stocks, bonds, or real estate. Over time, even modest contributions can amass substantial wealth due to the power of compound interest.

Consider employing a dollar-cost averaging approach – investing a fixed amount at regular intervals regardless of market conditions, which can mitigate the risk of market volatility and reduce the potential for investment mistakes. This disciplined approach is key to building long-term wealth.

Educate yourself about finances

Understanding finance fundamentals is crucial for building wealth, from basics like budgeting and saving to more complex topics like investment strategies and tax planning; a solid knowledge base can empower you to make informed financial decisions.

You can learn about finances via books, online courses, seminars, or hiring a financial advisor. A continual learning mindset is essential as the world of finance constantly evolves.

Expand your knowledge beyond just income and expenses - learn how money works, how to manage it effectively, and how the financial market operates. This educational journey can be instrumental in boosting your wealth-building potential.

Diversify your investments

To reduce risk, investment diversification involves spreading your assets across various investment types and sectors – such as stocks, bonds, real estate, or even alternative investments like cryptocurrency.

The logic behind diversification is that if one investment performs poorly, others may perform well and balance the loss. This approach can help you achieve a favorable return-to-risk ratio.

Making informed decisions about what and when to invest in each option is vital. Hence, prior research and consultation with financial advisors are beneficial for successful diversification.

Also Read: Futures Vs Options [Which One Can Make You Richer In 2023]

Network with successful individuals

Surrounding yourself with successful individuals is a powerful strategy for becoming wealthy. Their shared insights, experiences, and habits can guide your wealth-building journey.

These contacts can also expose you to new opportunities and potential collaborations that could increase your income or create new avenues for investment.

Networking doesn't only mean attending formal events - it can be as simple as conversing with someone in a career or industry you're interested in.

The quality of your network will often influence the quality of your wealth-building strategies – so choose wisely and reach out to those who inspire success.

Avoid high-interest debt

High-interest debt, such as credit card debt, can be one of the biggest obstructions to accumulating wealth. The compounding nature of interest can cause these debts to swell over time, eating into the money you could have saved or invested.

It's advisable to prioritize repaying high-interest loans quickly and avoid getting into such debt. Using cash or debit for daily transactions could help control spending habits and avoid unnecessary debt.

Establishing an emergency fund can also provide a financial cushion and prevent resorting to high-interest borrowing during unexpected situations. Ultimately, maintaining a debt-free life is integral to building wealth.

Set clear financial goals

Start by identifying what you want to achieve - saving for retirement, buying a home, funding your children's education, or enjoying financial freedom at a certain age. These goals should be specific, measurable, achievable, relevant, and time-bound (SMART).

Track your progress regularly and make necessary adjustments to ensure you are on the right path. Goals give you focus and motivate you to save and invest wisely.

Becoming wealthy isn't about making a quick fortune but working steadily towards your long-term financial objectives.

Also Read: 10 Keys To Financial Planning Success [Let's Manage Your Money]

Continuously improve your skills

Improving your skills can significantly bolster your earning potential, a crucial aspect of wealth building. Those continually refining and enhancing their skill set in the competitive professional landscape tend to have an edge.

This could involve pursuing further education or field-specific qualifications, learning new technologies related to your work, or even acquiring soft skills like negotiation or leadership.

Regular upskilling can open doors to advanced opportunities and higher-paying roles. In an era of technological advancement and changing business landscapes, being adaptable and committed to lifelong learning is invaluable for career success and financial prosperity.

Seek multiple sources of income

Relying on a single income stream can inhibit your ability to accumulate wealth. Consider establishing multiple income streams to mitigate this risk and accelerate your wealth-building journey.

These could include rental income from real estate, dividend income from stocks, interest from bonds, profits from side businesses, or payouts from part-time work.

This approach not only offers greater financial security but also provides additional funds that can be invested to grow your wealth further.

Having diverse sources of income can make you more resilient in the face of economic downturns or job loss, thus contributing to overall financial stability.

Be patient and disciplined

Wealth creation is slow and steady, requiring equal patience and discipline. Avoid the temptation for get-rich-quick schemes and instead focus on building wealth over time.

Remember that most successful investments don’t yield an immediate return; they require time to increase in value incrementally. Discipline matters, too, particularly when sticking to your financial plan, even when the market is volatile.

Make informed, long-term decisions rather than being influenced by short-term market fluctuations. Rome wasn't built in a day - cultivating these traits can set you on a solid path to becoming wealthy.

FAQs about rich vs wealthy

Is being rich the same as being wealthy?

No, being rich denotes a high income level, while wealth refers to sustaining a comfortable lifestyle without needing to work.

How can I evolve from rich to wealthy?

You can transition from being rich to wealthy by investing wisely, creating multiple income streams, and focusing on long-term financial security.

Do the wealthy have more money?

While the rich may have a lot of money in the short term due to high income, the wealthy tend to have more assets and financial stability in the long run.

Is it better to be wealthy?

While subjective, many argue it's better to be wealthy because wealth denotes financial stability and independence, whereas wealth can often involve continuous work for income.

Can you give an example of a 'wealthy' person vs a 'rich' person?

An example of a 'rich' person might be a high-paid professional athlete living extravagantly, whereas a 'wealthy' individual could be an investor living modestly but with significant investments providing stable income.


Understanding the difference between being rich and being wealthy can alter your perspective on money management. It's not simply about raking in cash; it's about creating sustainable wealth for a secure future.

Though the road to wealth may be gradual, remember that it is not impossible. Keep your eyes on the goal, be consistent with new habits and financial decisions, and remember, true wealth is a marathon, not a sprint.

Michael Restiano

I lead product content strategy for SaltMoney. Additionally, I’m helping our broader team of 4 evolve into a mature content strategy practice with the right documentation and processes to deliver quality work. Prior to Instacart, I was a content strategy lead at Uber Eats and Facebook. Before that, I was a content strategist at SapientNitro, helping major Fortune 500 brands create better, more useful digital content.