Why Being Wealthy Is Better Than Being Rich

Fancy cars, big house, a couple of Bojangles franchises, some people look like they have it all. But are they rich or are they wealthy? Because there's a big difference. In this video you'll find out what it means to be rich versus wealthy so you can make sure you're headed toward the right one. But before we jump in hit those like and subscribe buttons and share this video with everyone you know who is not yet rich or wealthy so maybe one day It's fried chicken. I like fried chicken. Okay, first let's state the obvious here. According to old Sammy Webster, rich and wealthy basically have the same definition. Rich. Here we go. Having wealth or great possessions. Wealthy. Having great wealth. Rich. Affluent. Unhelpful, Webster. But let's be honest, not everything in here makes sense. Like wedgie. Noun. Informal. The fact of having one's underpants or other I'm sure you got a lot of those back in your day for being named Webster. The way I see it, there are four key differences between rich and wealthy. The first big difference between rich and wealthy is that rich people spend their money on a fancy lifestyle while wealthy people spend it on income generating assets and passive income. Rich people spend their money on a lavish lifestyle. Things like luxury cars, fancy watches, a pool shaped like a cowboy hat because it reminds them of their dad who never said I love you. Those kinds of things. Oh that's cold. And they usually do it very publicly because for them it's all about maintaining a certain image. They're more concerned with looking rich than actually being rich. And by the way a lot of the things they end up buying are depreciating assets aka things that go down in value. Wealthy people on the other hand care more about building real lasting wealth for the future versus impressing other people. Ramsey Solutions surveyed more than 10,000 millionaires. We found most of them aren't living flashy lifestyles flying private jets and driving Lambos. In fact most of them drive Hondas and Toyotas and you probably wouldn't even be able to tell they're millionaires just by looking at them. But yes wealthy people have nice things too. They're just not trying to flaunt their fortune. They're more focused on using their money to buy income generating assets and set up passive income streams by investing in things like mutual funds, real estate, and businesses. Basically they're using their money to generate even more money. That's true wealth. A great example of this is the seven foot one former NBA center and creator of the shakaroni pizza Mr. Shaquille O'Neal himself. He started out spending his money on all the wrong things. He claims he blew through his first million dollars in 60 minutes. And you see this a lot with pro athletes. But Mayor McShack turned things around and became a pro baller who bucked that trend. He didn't just spend all that kazam money on cars, champagne, and nice gigantic shoes. Shaq invested in franchises like Five Guys, Papa John's, and Auntie Anne's. No it's not Auntie Anne's. Auntie Anne's smokes in the house and she's never been the same since Jimmy John left. Two first names. Red flag number four. Oh I guess I should have seen the signs. Shaq also kept making money long after he retired from basketball through endorsements with companies like Icy Hot. Because Shaq doesn't just think like a rich person, he thinks like a wealthy person. A wealthy person with incredibly large shoes. The second big difference between rich and wealthy people is that rich people measure their financial success by their income. Whereas wealthy people look at their Rich people tend to focus on income because they need to make a lot of money to keep up their lifestyle because they have a lot of money to spend. They want to solve all their problems by trying to make more instead of addressing the underlying issues. And here's the thing, a high income doesn't guarantee you'll be wealthy in the long run. You've still got to be doing the right things with your money. And according to a recent report from Bank of America, around 20% of households with incomes above 150 grand regularly spend nearly all of their income, leaving little to nothing left over A better way to measure how well you're doing with money is net worth. Your net worth is simply what you own minus what you owe. In other words, the total value of your assets minus your liabilities, which is your debt. That's what equals your net worth and it's the most accurate picture of your overall financial health. The third big difference between the rich and the wealthy is that rich people live paycheck to paycheck despite their high income and wealthy people have financial peace. TN. Rich people may have a high income but a lot of them are still super stressed about their finances and even high earners can end up broke. In fact, nearly half of U.S. consumers earning $100,000 or more are living paycheck to paycheck. That's sad and it doesn't sound like real wealth to me. Wealthy people, on the other hand, aren't stressed about money because they've always got some to spare. They don't have any debt, they have a fully funded emergency fund, they're building a solid nest egg for the future by investing in their retirement plans, they've paid off their home, and they likely have multiple sources of income. Something else wealthy people do? They earn interest. And a great way to do that is with a high yield savings account like the one offered by Laurel Road, one of the sponsors of today's video. If you've got money sitting in a dusty old savings account earning close to nothing, it's time for an upgrade. Because with Laurel Road, your account balance will earn top tier APY. So if you're saving up for a new car, stashing away a hefty sum for a chicken franchise, that money could be working for you. Plus with Laurel Road, there's no minimum balance required to open an account, your deposits are FDIC insured, and there's no hidden fees. Learn more by going to laurelroad.com slash george or click the link in the description below. And before we get back to rich versus wealthy, let's talk about you versus scammers. You can get your personal info off the web and out of the hands of spammers and scammers by using Delete.me, a sponsor of today's video. Delete.me will find and remove your info from hundreds of these data broker sites and then send you a report showing you what they did and how much time they've saved you. And so far I've saved 86 hours, which is enough time to watch every movie Shaq has ever made and still have time left over to watch Kazam a couple more times. So help protect yourself from risks of online scams and data breaches with Delete.me. Right now you can get 20% off their plans by going to joindelete.me.com slash george or click the link in the description. Okay, the fourth big difference between the rich and the wealthy is that rich people owe, wealthy people own. You see, rich people blow money on a bunch of super expensive items so they can impress everyone, but no one knows if they actually have any money because they could have bought everything with credit. A rich person might be in debt up to their eyeballs, hundreds of thousands of dollars or more thanks to mortgages, car loans, and credit cards because they're using debt to prop up a lifestyle they really can't afford. And that's what I like to call fake rich. And here's the deal. If you live fake rich, you'll end up real broke. Tweet that. Threads it. Snapchat it. Send it to Elon. Elon, send the tweet. Send the ex. You hang up first. But a wealthy person doesn't spend money they don't have. They have paid for cars and a paid for house or two or three. Or if you're Dave Ramsey, a few hundred because why not? And what that does, it gives them more options and more flexibility. And when they do spend, they don't rely on debt. I mean, why borrow someone else's money when you don't need to? You become your own bank. And no debt means less risk. And less risk equals more peace, 100% of the time. So I don't know about y'all, but I want to be wealthy, not rich. But how do you become wealthy if you're just a regular person who doesn't have a sponsorship deal with Icy Hot? Well, here's six things you can do to start building some real wealth today. Number one, shift your mindset. Instead of thinking about what you want, start thinking about the legacy you want to leave for future generations. You need to have a why behind all of this and a vision for how you're going to get there. This is a long-term mindset instead of instant gratification. Number two, get out of debt. You cannot build wealth if you have negative dollars in your bank account and you owe everyone money. So pay off your debt ASAP and never look back. Number three, start living on less than you make. This is the only way to create financial margin, which is the amount of money between your income and your expenses. And the bigger the gap, the more you can build wealth. When you have margin, that's when you can move beyond living paycheck to paycheck and start putting your money to work, making more money. Which brings us to number four, invest. Once you're debt-free and you have a fully funded emergency fund of three to six months of expenses, it's time to start investing 15% of your income to tax-advantaged retirement accounts, like a company 401k or a Roth IRA. And if you invest consistently over a long enough period of time, you can become a millionaire, probably a multi-millionaire. Number five, own real estate. Now this can be a great way to build wealth, but if you're going to do this, you got to do it the right way. Before you buy an investment property, make sure you're financially ready and pay off your own home first. And do not leverage debt to buy rental property. It is way too risky. You got to save up and pay cash. And that might mean you start small and it takes you a few years to save. Number six, become an entrepreneur. You can become a millionaire by simply investing in your retirement account, but people who have astronomical wealth did not accumulate that in a 401k. Odds are they or a family member started a business, but you don't have to be the founder of the next AI company to build some wealth. You can bring in some extra money by doing things like starting an Etsy shop, driving for Uber, walking dogs, detailing cars, and who knows? Maybe you can scale those side hustles one day into a full-blown business. Maybe you can go to space in a cowboy hat. Who knows? The world is your oyster. Katy Perry's doing it. If you want to know more about how to build real, lasting wealth, be sure to check out my book, Breaking Free from Broke, The Ultimate Guide to More Money and Less Stress. And if you like this, talking to you, you're going to love the audiobook version, which I read myself. I'm going to drop a link in the description below for you to check out. If you want to see how I built a million dollar net worth by the age of 32, check out this video or click the link in the description to keep watching. Thank you guys for tuning in. We'll see you next time.