The Difference Between Being Rich and Being Wealthy

…and why you need to take your personal finances very seriously…

Let me ask you a question. Do you think someone who makes $400,000 annually worries about finances? You would be surprised - it happens more than you would think. Salary alone does not determine financial success. One can have a fantastic salary complete with a high stardard of living, but with high monthly expenses. There are others who have relatively low monthly expenses, modest salaries, but still have considerable liquid assets.

Most people do not start out making a large income, complete with pension, and retirement contribution. They start out making far less. The future millionaires learn to budget themselves well and learn to put money away every month. The ones who will not be financially secure simply spend what they earn. So, as time goes on, their salaries increase along with monthly expenses and standard of living, but there is no increase in savings or investments.

In order to be truly wealthy, you must take personal finance very seriously. Learn to budget yourself from a young age. Pay for everything using as little credit as possible. As your income goes up, so should the amount you are investing and saving.

Therefore, I would say that someone who earns a large salary can live richly. However, unless the person has a large savings pool and little-to-no debt, they aren’t wealthy.

It is impossible for me to stress this concept enough - saving and investing is crucially important if you want to become wealthy. This will be a major theme in my blog. My goal is help educate others and also to learn from outside experiences and recommendations.