Author Robert Kiyosaki states that the two have a very different meaning with the rich “people who earn a lot of money” and the wealthy people who see “how long you can live without physically working and still maintaining your standard of living”
Those who are wealthy tend to have an accumulation of assets, living well within their means. In fact, the majority of those who are wealthy are not recognised as they tend not to live flashy lifestyles, rather they direct money into investment portfolios. Those who are wealthy tend to have a high net worth.
Those who are rich are described as people who have a high income. However, the difference here is that instead of accumulating assets rich people decided to spend money on a lavish lifestyle. Even if you earn $200,000 per year if you spend $200,000 per year you will have no safety net of savings or investments. Due to this, it is common for rich people to go bankrupt. One example is of a footballer who earned twenty million over a career of 25 years but in 2014 declared bankruptcy as his outgoing exceeded the money he had.
Ultimately the difference between being rich and wealthy is down to money management. Not just if you invest your money but if you actually acquire a large amount of wealth that you keep. So, when you receive a large bonus at work instead of spending the extra cash consider storing it. This is something billionaire Warren Buffett practices, of course, he does not deny himself luxuries in life, enjoy trips on private jets yet he doesn’t feel the need to be lavish in all areas of his life. For example, he still lives in the same house that he purchased in the 1950s, also driving the same car for many years.
With this information in mind take a look at your income and your expenditure to evaluate if you are rich or wealthy.