As a financial adviser, one of the topics that I often talk about is being rich vs. being wealthy. While those terms may seem like they’re the same concept, there are nuances between them, and you can be rich without being wealthy, and vice versa.
What I’ve also found, is that the difference between being rich and being wealthy comes down to where you have the most zeros.
For most people, when they think of the word rich, they’re likely thinking of assets — money, real estate, etc. And while there is nothing wrong with growing your assets (I’ve even made a career out of helping people do just that), at the end of the day, no one cares about how much you’re worth and how much money you make.
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Harvard has conducted a long-running study, since 1938, that followed 724 teenagers from their youth to their retirement. The happiest among those who were retired had similar traits when it came to their mindset, not their bank account.
This study suggested that there was an association between connections, such as your social circle, and happiness when you reach retirement age — and you don’t find that in the zeros of your bank account. The thing that those in the study missed the most about their working years wasn’t the work or making money either — it was the connections with those around them.
In Retirement, Discussion Turns to Pleasures Rather Than Worth
I recently visited my mother at her retirement community in Florida, and not once did anyone talk about their career, their worth or what they did for a living. While they all had to be some level of “rich” to be living in this particular retirement community, this wasn’t a topic of discussion.
They spent their time talking about their hobbies, their grandkids and what they enjoyed doing with their lives.
That’s the difference between being rich and being wealthy — being rich means adding more zeros to your bank account. Being wealthy is about living your live with zero regrets, zero jealousy and focusing on what brings you joy and happiness.
In my experience, the happiest people I know are the wealthiest, and it has nothing to do with how much is in their bank accounts.
One of my favorite phrases is “money is a catalyst” because once you hit a certain income level where you are living comfortably, money is just money. If you’re a happy person living with an income of $100,000 per year, an income of $500,000 isn’t going to change your happiness level drastically. The opposite is true here, too — if you are miserable earning $100,000 per year, $500,000 isn’t going to suddenly make you a happy person.
Obviously, this is only true when you’re living at a level where you’re earning enough that your needs are being met.
Money Alone Won’t Make You Happy
Some of the wealthiest people I know, with the largest bank balances, are also the most miserable. Money alone won’t make you happy, and it’s likely that if you’re a happy person earning a modest amount, you’d still be a happy person if you’re rich. The same goes for someone who’s miserable — they’d be miserable if they were middle-income or rich.
When it comes down to it, happiness isn’t reliant upon how many zeros are in your bank account. It takes effort to reframe your thoughts, find what truly makes you happy, and refocus and prioritize your decision-making around that.
Prioritizing what makes you happy may lead you into retirement being truly wealthy, where you can focus on the social connections that the Harvard study found so important to happiness.
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Related Content
- Are You Rich? Latest Survey Results Provide Some Clues
- Can Money Buy Happiness? New Research Settles Age-Old Debate
- Being Rich in Retirement vs. Being Happy: There’s a Difference
Disclaimer
This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.
FAQs
There is a difference between being rich and being wealthy in terms of money and financial resources. Being rich typically means having a lot of possessions and material wealth, while being wealthy is more about having sustainable and lasting wealth.
Is there a difference between rich and wealthy? ›
But while everyone in this group is rich, it does not mean they are wealthy. To be considered wealthy, your assets must be more substantial than your liabilities, with them generating an income large enough to cover your fixed expenses (such as rent or mortgage payments, car payments and insurance premiums).
What is considered rich or wealthy? ›
Someone who has $1 million in liquid assets, for instance, is usually considered to be a high net worth (HNW) individual. You might need $5 million to $10 million to qualify as having a very high net worth while it may take $30 million or more to be considered ultra-high net worth.
Can you be rich without being wealthy? ›
While those terms may seem like they're the same concept, there are nuances between them, and you can be rich without being wealthy, and vice versa.
Is being rich having money being wealthy? ›
Finding a healthy balance between acquiring riches and appreciating the time we have at hand is crucial. The saying by Margaret Bonanno, "Being rich is having money; being wealthy is having time," epitomizes this point.
How can you tell someone is wealthy? ›
- Minimalist Homes: Where Less Is More. ...
- Low Profile Luxury Cars: Driving Discretion. ...
- High-quality Wardrobes with Minimal Brand Identification: Style with Substance. ...
- Real Generational Wealth: Steadfast Stability. ...
- Subtle Signs of Real Estate Investment: Property Portfolio. ...
- Pearliness of Their Whites: A Smile of Affluence.
Some common synonyms of wealthy are affluent, opulent, and rich. While all these words mean "having goods, property, and money in abundance," wealthy stresses the possession of property and intrinsically valuable things.
How do you know if you're rich? ›
Being rich currently means having a net worth of about $2.2 million. However, this number fluctuates over time, and you can measure wealth according to your financial priorities. As a result, healthy financial habits, like spending less than you make, are critical to becoming wealthy, no matter your definition.
How much wealth is upper class? ›
In 2021, the typical upper-income household had a median net worth of $803,400. This was 33 times as much as the wealth of the typical lower-income household ($24,500). The wealth of middle-income households stood at $204,100, only about one-fourth the wealth of upper-income households.
Is it if I were rich or if I am rich? ›
It should be: "I wish I were rich." This is because of something known as "subjunctive mood". When speaking hypothetically or longingly, using words like "if" or "wish", you pluralize the linking verb (from "was" to "were") even though it refers to a singular pronoun like "I".
Roughly three out of 100 people in the U.S. are millionaires, but your chances of becoming a millionaire depend very much on your age, your race, and your education.
Can people be secretly rich? ›
Many people who have money never worked to earn it. They were born into a wealthy family and got everything paid for by mommy and daddy. Or they had a trust fund or secret inheritance.
What makes a person rich besides money? ›
The ability to live where you want, to travel, and to do what you want to do in your life is a form of wealth. And it has more to do lifestyle than anything else, so even a person of modest means can have it.
What is the difference between being wealthy and being rich? ›
There is a difference between being rich and being wealthy in terms of money and financial resources. Being rich typically means having a lot of possessions and material wealth, while being wealthy is more about having sustainable and lasting wealth.
At what point are you considered wealthy? ›
In the United States, the concept of being rich is often a subject of discussion, curiosity and, sometimes, aspiration. Charles Schwab's 2023 Modern Wealth Survey provides insights into this topic, revealing that the average American equates being wealthy with a net worth of approximately $2.2 million.
What salary is considered wealthy? ›
Here's the income it takes to be a top earner in your state
You'll need to earn more than half a million annually to be considered among the highest earning residents in 11 states and Washington, D.C. "This comes down to cost of living," Murray said.
Are you rich or are you wealthy? ›
Rich is only limited to possession of material things, while wealth is deeper. Wealth includes a natural source of revenue, of income. It's a tappable source of riches that can keep on giving, without the need to seek out new riches.
What is the difference between rich and wealthy dictionary? ›
rich, wealthy, affluent, opulent mean having goods, property, and money in abundance. rich implies having more than enough to gratify normal needs or desires. wealthy stresses the possession of property and intrinsically valuable things.
What is the difference between getting wealthy and staying wealthy? ›
To get rich, you often need to take on more risk and be more aggressive in your investments. This aggressiveness can also increase the chances of losing money, and sometimes lots of it. To stay rich, you need to be more cautious and conservative in your approach.
Is it wealthy or more wealthy? ›
Since wealthy has two syllables, the letter y is dropped and is replaced by -ier. Thus, it becomes wealthier. We can only use the word "'more'" for adjectives that have two syllables but don't end in the letter y. For example, peaceful becomes more peaceful, and alive becomes more alive.
