Rich and wealthy are synonyms. But they couldn't be more different from each other.
I know you might not think it's important to distinguish the two. The rich and the wealthy both make a ton of money and who doesn't want more cash? Rich, wealthy, or a king, it doesn't matter what you call yourself if you have the latest sports car, a palace in the French vineyards, or a personal Gordon Ramsay. But did you know that the third richest person in the world lives in the same house he did 60 years ago when he bought it for 30 grand? I'm talking about the legendary Warren Buffet, who at the time of writing, has a net worth of $82.3 billion. So, if the richest of the rich is living in a house bought in 1958, maybe there is a difference between the people who show off their gold watches and those who steadily invest and accumulate money.
The difference between the rich and the wealthy is that the wealthy focus on accumulating assets for long-term economic growth, while the rich have a high income but spend money on appearing to be rich. Wealthy individuals are careful and intentional with their money. They build up a bank account that can sustain them for long periods if there is no incoming cash flow. The wealthy set goals of retiring early, enjoying financial independence, and having a large cushion to lean on when a financial crisis arises. The rich couldn't be more different. At the end of the month, a fat paycheck arrives to replenish their spending budget. A $2,000 new suit? Yes, please! The newest Gucci belt? Take my money! A perfect example is Nicolas Cage, a Hollywood actor who in 2009 made $40 million. He spent absurd money on houses, cars, and airplanes. The result? He ate through $150 million, went broke, and then owed $6 million to the IRS. Cage was one of Hollywood's highest-paid actors, but as his income increased, his weird spending habits did too (besides the usual luxuries, he bought dinosaur skulls, albino snakes, and a pyramid tombstone).
So, you can see that the wealthy and the rich handle their money very differently. But at the end of the day, money is a renewable resource that you can lose in a few seconds or make in a few minutes. Even Nicolas Cage learned from his mistakes and has steadily improved his spending habits. There is something more important than money, yet so few of us think of it. We have a finite amount of it, and when it's gone, it's gone. I'm referring to time. Time is your most valuable resource, because once you spend it, it is gone, and you can never get it back. We all are rich in time. No one has more minutes in an hour, hours in a day, or days in a week. We can all spend the same amount of time. However, high performers are wealthy in time. Instead of spending it, like income, they invest it. What do I mean by this? They think about the long-term gain instead of short-term pleasure. Instead of spending time watching a show, they invest it by reading, working on a business, or investing time with loved ones. They ask, "What is the activity I can do today that will allow me to have the most time in the future?"
Are you wondering how to invest time?
Here is how you can start taking time seriously like the world's top performers and financial geniuses:
- Reclaim your time. No matter how "busy" you claim to be, carve out time for yourself. As all the finance and money experts say, pay yourself first, even if it's only a small amount in the beginning.
- Don't be indebted to others with time. Focus on eliminating the biggest time-wasters in your life. You don't want to be giving away your time to things or people that don't matter.
- Invest as many hours as you can. The best way you can maximize your time is by investing it. Automate necessary activities, so you can have time to do the things that will pay off in the long run.
- Don't spend time on unnecessary tasks. Time is limited. Determine what is truly important to you and align with your values. Those are the only things worth pursuing.
- Think about how each choice you make today will influence your life a year from now. Being wealthy in time requires patience, dedication, and commitment. You won't see results overnight. It could take a couple of years to build up wealth in time. That's ok. Think back to why you decided to embark on this journey in the first place when life gets difficult.
All in all, time is something we all have. Just like the most prosperous people, you can have a thick envelope delivered to your mailbox with a set number of hours to spend. You can burn through it like the world hottest celebrities, but be careful, because just when you want to kick back your feet and enjoy time with loved ones, you will have to make up the hours you owe to someone else. So always think long-term. Whenever you start an activity, think about if you are spending time or investing it for the future.
- Yaged, C. (2020, July 14). How Nicolas Cage Wildly Spent a $150 Million Fortune. FinanceBuzz. Retrieved from financebuzz.com/finance-nicolas-cage-buying-spree
- Insider, B. (2017, July 10). Warren Buffett lives in a modest $652K house. YouTube. Retrieved from youtube.com/watch?v=PzFEs_9eNsU
- Calhoun, G. (n.d.). Warren Buffett. Forbes. Retrieved from forbes.com/profile/warren-buffett/#99f34d746398