Wealth is what you Don’t See ? 10 Wealthy Vs Rich Mindset ..
What is Wealthy Vs Rich Mindset ?
Spending money to show people how much money you have is the fastest way to have less money. .
Money has many ironies . Here’s an important one : Wealth is what you Don’t See . If you see a ferrari driving around you , you might intuitively assume the owner of the car is Rich – even you are not paying much attention to them , But as I got to know some of these people I realized that wasn’t always the case . Many were Mediocre Successes , who spent a huge percentage of their paycheck on a car .
Here is a short story of the Morgan Housel “ I remember a fellow well call Roger . He was about the my age . I had no idea what Roger did . But he drove a porsche , which was enouogh for people to draw assumptions .Then one day Roger arrived in an old Honda . Same the next week and the next .
What happened to your porsche ? I asked . It was repossessed after defaulting on his car loan , he said . There was not a morsel of shame . He responded like he was telling the next play in the game . Every assumptions you might have has about him was wrong . Big cities are full of Rogers .
Someone driving a 8000000 car might be wealthy , but the only point you have noticed about their wealth is that they have 8000000 less than they did before they bought the car .
We tend to judge wealth by what we see , because that’s the information we have in front of us . We can’t see people’s bank accounts or brokerage statement .
So we rely on outward appearance to gauge financial success , Car , Homes , Instagram , Facebook Photo etc .
People fake it until they make it a cherish industry , but the truth is “ wealth is financial asset that haven’t yet been converted into the stuff you see.
That’s not how we think about wealth , because you can’t contextulize what you can’t see .
There are few example -singer Rihanna nerely went Bankrupt after overspending and sued her financial advisor . The advisor responded was it really necessary to tell her that if you spent money on things , you will end up with the things not the money .
You can laugh and please do , But the answer is yes . People do need to be told that when most people say they went to be a millionaire , what they might actually mean is “ I’d like to spend a milion dollar “ and that is literally the opposite of being millionaire .
Investor Bill Mann once wrote “ There is no faster way to feel Rich than to spend lots of money on really nice things , But the way to be Rich is to spend money you have , and to not spend money you don’t have .
The only way to be wealthy is to not spend the money that you do have . it’s not just the only way to accumulate wealth . It is very definition of wealth .
We should be careful while defining Rich and wealthy , It is more than semantics , Not knowing the difference is a source of countless poor money decision .
Rich is a current income . Someone driving a 8000000 car is almost certainly Rich , because even if they purchase the car with debt you need a certain level of income to afford the monthly payment and expenses.
Same with who lives in Big homes . It’s not hard to spot rich people , but wealth is hidden . It’s income not spent wealth is an option not yet taken to Buy something later .
It’s value lies in offering you options , flexibility and growth to one day purchase more stuff than you could Right now .
The problem for many of us is that it is easy to find Rich role models . It’s harder to find wealthy ones because by definition their success is more hidden . There are of course Wealthy people who also spend a lot of Money on stuff .
But even In those cases what we see is their Richness not their wealth . We only see the cars they choose to buy and perhaps the school they choose to send their kids . We don’t see the saving Retirement accounts , or Investments portfolios . we see the homes they bought .
I think more people deep down , want to be wealthy . They want freedom and flexibility , which is what financial asset not yet spent can give you. But it is so ingrained in us that to have money is to spend money that we don’t get to see the restrained it takes to actually be wealthy , and since we can’t see it . It’s hard to learn about it .
People are good at learning the imitation. But the hidden nature of wealth makes it hard to imitate others and learn form their ways . After he died , Ronald Read became many people’s financial role model . He was Lionized in the media and cherished on social media , But was nobody’s fiancial role model while he was living because every penny of his wealth was hidden , even to those who knew him .
Imagine how hard it would be to learn how to write if you couldn’t read the works of great author .
You can ask from yourself
Who would be your inspiration ?
Who would you admire ?
It’s difficult to learn from what you can’t see . which helps explain why it’s so hard for many to build wealth .
