Comedy has a way of making serious potent points in a funny way. Its about laughing at ourselves, it has a way of making a serious point that has the potential to shape how we view ourselves. Take Chris Rock’s comedy show “Never Scared” when talks about I’m not talking ’bout rich, I’m talking ’bout wealth.
In this clip Chris does a pretty fine job of demonstrating the difference between rich and wealth. He uses the example of the super wealthy (see: Bill Gates) and the super-rich (celebrities that could lose their money in one summer season due to a drug habit).
He says wealth is empowering, it is liberating. When white people get money they use it to establish other organisations that will empower other white people, when black people get money they use it to buy material things (he says they buy bling).
I’m not going to get into the white and black people comparison, but I want to explore the issue of being wealth and being rich and what the difference is between the two because anyone can be wealthy white or black.
Usually, we use the words “wealth” and “rich” interchangeably. Someone who has a really nice home, car, and job is said to be rich. Likewise, we assume they are wealthy.
But realistically, the two terms don’t mean the same thing.
At least, I don’t think they should.
Rich is subjective. My definition of rich might differ from yours. Plus, you can appear to be rich when you’re actually broke. Rich can be taken away or lost in the blink of an eye (Chris Rock says you can lose it over a drug habit). This is because the rich are often controlled by other entities like banks and companies. Or, they squander away their new-found richness (example: lottery winners who over time lost their winnings through careless spending). How many times have we seen soccer players, musicians and other people we considered rich lose their money.
These individuals may have been rich (by living off credit cards and using their decent income to secure financing) in appearance, but they certainly were not wealthy.
Wealth can’t be faked. Wealth can’t be taken away because of the decisions other people make. Wealth, in its simplest form, is a set of behaviors that lead to financial success.
Some of these factors include:
• Saving a certain amount or percentage from every salary (Warren Buffet says do not save what is left after spending, spend what is left after saving)
• Refusing to take on debt except when necessary (like a home mortgage)
• Spending less than you earn
These factors aren’t new or exciting. They’re honestly just common sense. If the entire working population (including teenager) were to just simply start saving 10% of their income, millions of people would be better off. And that’s just one small behavioral modification
What’s the difference between being rich versus being wealthy? Is there a difference and if so how can we separate the two similar concepts?
Rich is a current state of being that can happen overnight. For example: lottery winners, new found celebrities and even highly paid professionals such as doctors, lawyers and accountants belong in the category of rich. They have quite a bit of money, but only have that money because of one source. Becoming rich can happen in an instant (lottery winner) or through years spend in university acquiring a degree, but at the same time it can disappear in an instant.
Wealth is being rich, but being rich through ownership of assets. Wealthy people don’t rely on their job, one particular asset, or even their natural talents. Wealthy people own assets and if you took away their job (if they have one) they wouldn’t be poor. If you took away the income stream from a rich person, they would quickly become poor. There’s a huge difference here.
Seth Godin makes this illustration: Do work and get paid once. Build an asset and get paid for as long as it last. A retailer or a restaurant owner might work 18 hours a day, but the landlord (where the restaurant is based) makes just as much money (often more) from that effort. The cheeseburger gets paid for once, but the rental income comes every month. Basically rich people work for their money, wealthy people build assets that generate money, where are your assets?
In the most basic of terms rich people are not financially free while wealthy people are.
Ironically enough you’ll find many “get rich quick schemes” but there aren’t many “get wealthy quick schemes.” That’s because quick wealth is an oxymoron. Like a well built house, wealth is established one brick at a time. The house of wealth cannot be built overnight.
Everybody wants to be rich. Most want to get rich quick. Most fail, and fail miserably. Why? Because what they are really after is becoming wealthy, not rich. Rich is fleeting. Richness comes and goes. Wealth is forever.